Fewer In-Room Porn Purchases Impacts LodgeNet Profits

SIOUX FALLS, S.D.—The changing face of media delivery is having a less-than-positive impact on LodgeNet's bottom line, especially when it comes to adult content. The Sioux Falls-based provider of media connectivity solutions for 1.9 million hotel rooms, as well as other guest-based businesses, recorded a net loss of $3.1 million for the second quarter of 2010, due to a variety of factors that include the availability of porn by other means. Things aren't totally bleak for the 30-year-old company; second quarter losses were dramatically less than those posted during the same period a year ago. But that good news is somewhat tempered by the fact that it has posted new losses for every years since 2007, and in light of continuously evolving technologies and consumer habits, the road ahead is anything but clear. The company itself remains guardedly optimistic, despite the fact that revenue from guest services fell 12 percent to $66 million in the second quarter. “The decline in per room revenue continued to be driven by conservative consumer buying patterns as well as less popular theatrical content during the quarter as compared to the year-earlier period,” the company stated. According to an article on [view link], “Adult-entertainment viewing undoubtedly is a big-ticket item for LodgeNet and other vendors in their in-room, on-demand offerings, and the widespread availability of porn on guests' laptops these days may be contributing to the “less popular theatrical content” which LodgeNet referred to. The article also notes the increased number of hotels offering free wi-fi as another factors nipping at LodgeNet's heels, and notes, “LodgeNet is trying to diversify out of a business line in decline.” The company probably takes little solace in the fact that it is not the only industry in that situation. [view link]