Analyst: Rentrak shares poised to benefit from MTV deal

Ahead of the Bell: Rentrak signs MTV deal

NEW YORK — Rentrak Corp., a media measurement and research company, will see thinner short-term profits after signing a deal with MTV, yet company shares are likely to rise, according to Kaufman Bros. analyst Todd Mitchell.

On Monday, the company said MTV Networks became the first major cable group to subscribe to its TV Essentials service, used for audience targeting, advertising, and programming through set-top boxes. Financial terms were not disclosed.

Mitchell, who rates Rentrak “Buy,” pointed out that the MTV deal for Rentrak follows the incorporation of set-top box data from Dish Network Corp.

“With Dish’s dataset now incorporated, Rentrak’s TV Essentials offers census level TV ratings data for all 210 (designated market areas). This is a powerful thing,” the analyst wrote.

Designated market areas are established by Nielsen Media Research for TV stations and networks for setting advertising rates.

Mitchell did say he expects Rentrak’s earnings per share to decline going into fiscal 2011, which ends next March, due to a “relatively long and strategic sales cycle for the TV Essentials service and continued investment.”

Nonetheless, the analyst raised his target price to $24 from $20.