• by June 4, 2007

Broadband video provider Narrowstep, Inc. reported a 122% increase in revenue, to just over $6 million for the fiscal year ended Feb. 28. It marked the second consecutive year that revenues doubled for the company, which went public in 2005 after launching three years earlier.

Narrowstep President and Interim CEO David McCourt noted during an earnings call that the distribution portion of the business was up 192% to $4.4 million, and he expects that portion of the business to double again in both 2007 and 2008.

The remaining revenue came from production, a business that McCourt said Narrowstep plans to exit because of its "low margin even if run well."

For the first time, he said, U.S. revenue grew at higher rate than European and Asian revenues. (The company has offices in both New York and London, and boasts a number of major British clients such as ITV, SciFi UK and Virgin Media.

McCourt said the company will soon hire a "world-class" ad sales executive, and that he expects to make acquisitions of small companies with positive cash flows that are not currently scaleable. He also said he expects Narrowstep to do some deals with content owners "where we get equity in the channel" in addition to end-to-end service.

Comparing Narrowstep to others in the business, McCourt pointed to its full-solution approach, which he said is "as easy to sell as a lower-end product, but much more robust.... Most of the people in this business buy up content, slap some ads on it, do some distribution and syndication...and give the content owner a piece of the revenue. That, to me, is [more] a product [than] a business."

McCourt says Narrowstep's system does everything its competitors do, but also encoding, scheduling, digital rights, traffic management, geo-targeting, analytics, and the ability for both live and archived video. Indeed, McCourt said, Narrowstep "just took a customer from Brightcove last week because they couldn't do live coverage and we could."

According to McCourt, in addition to ad revenues, Narrowstep can share ecommerce, subscription and VOD revenues with content owners.