News

Nostalgias Net Loss Rises

5/24/1998 8:00 PM Eastern

The Nostalgia Network Inc., the publicly traded parent of
the recently renamed Goodlife Television Network, said last Monday that its quarterly
revenue fell 32.5 percent year-over-year due to steep declines in advertising revenue and
affiliate fees.

Nostalgia's emphasis on original programming helped to
raise the network's average primetime weeknight rating by 40 percent, to 0.7 from 0.5
in the first quarter of 1997. That hasn't stemmed affiliate losses yet, though.

Despite the ratings bump, ad revenue plummeted to $764,148
from $1.36 million, a 43.9 percent drop, and affiliate revenue fell 11.6 percent, to
$659,178 from $745,786. Total revenue dropped to $1.4 million from $2.1 million a year
ago.

Goodlife claims about 7 million subscribers, down from 7.7
million at the end of 1996 and from a high of 12.2 million five years ago.

Nostalgia lost more than one-half of the quarterly revenue
that it took in a year ago from infomercials: That revenue line dropped to $444,125 from
$930,253. Nostalgia ran movies during 23 percent of the time formerly occupied by
infomercials, it said in a Securities and Exchange Commission filing, and it had to cut
the rates that it charges to infomercial producers by 37 percent. The network was able to
add to its commercial-spot inventory by running those movies, but it had to cut those
rates by 36 percent. Conventional ad revenue fell 26 percent, to $320,023 from $432,798 a
year ago.

Operating expenses declined by just 3 percent in the
quarter, to $5.1 million from $5.2 million, and the company's overall operating loss
rose 17 percent, to $3.6 million from $3.1 million. Nostalgia's quarterly borrowings
rose sharply, and its net loss rose 29 percent, to $4.6 million, or 23 cents per common
share, from $3.6 million (18 cents) a year ago.

The network's majority shareholders -- affiliates of
the Rev. Sun Myung Moon's Unification Church -- have kicked in most of the
company's capital, through equity and debt infusions, and they have agreed to pump in
more than $15 million to keep operations going this year, the company said. Goodlife will
need "significant additional investment" over the next four to five years to
make the programming fixes and to add the distribution that it needs to boost revenue, it
said.

To that end, Nostalgia has been seeking potential strategic
partners since early 1996. There have since been "numerous" meetings with
potential partners, Nostalgia reported, but the talks were preliminary, and there are no
definitive offers on the table.

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