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Demand for digital media shrinks Loudeye losses

The digital encoding start-up posts strong revenue growth and narrower losses, slightly beating Wall Street estimates.

Digital encoding start-up Loudeye Technologies today posted strong revenue growth and narrower losses, slightly beating Wall Street estimates.

The Seattle-based company reported a pro forma net loss of $6.8 million, or 19 cents per share. Analysts expected Loudeye to lose 20 cents per share, according to a survey of three analysts by First Call.

Revenues for the period were $2.6 million, compared with $528,000 in the same period last year, a gain of 383 percent.

Loudeye CEO Martin Tobias attributed the better-than-expected report to a growth in demand for the company's digital media services and applications, to record-level production metrics, and to the company's beta launch of a software application platform, Media Syndicator.

"In the quarter, we aggressively expanded our digital media infrastructure solutions with new products and partnerships to support the rapidly growing and evolving requirements of our customers and the digital media industry in general," Tobias said in a statement.

Including write-offs related to acquisitions and employee stock compensation, the company lost $8.9 million, or 25 cents per share. That compares with losses for the same period last year of $1.7 million, or 11 cents per share.

In the quarter, Loudeye purchased Vidipax, a New York-based audio and video company.

Loudeye shares closed down 38 cents at $17.12. The earnings report was issued after the close of regular trading.