Business Overview

We have two operating divisions within our corporate structure and, accordingly, we report certain financial information by individual segment under this structure. Our Advanced Media and Information ("AMI") operating division includes our media measurement services. Our Home Entertainment ("HE") operating division includes our distribution services as well as services that measure, aggregate and report consumer rental activity on film and video game product from traditional "brick and mortar," online and kiosk retailers.

Our AMI Division encompasses media measurement services across multiple screens and platforms and is delivered via web-based products within our Entertainment Essentials™ lines of business. These services, offered primarily on a recurring subscription basis, capture consumer viewing data, which is integrated with consumer segmentation and purchase behavior databases. We provide film studios, television networks and stations, cable, satellite and telecommunications company ("telco") operators, advertisers and advertising agencies insights into consumer viewing and purchasing patterns through our thorough and expansive databases of box office results and local, national and on demand television performance.

Our HE Division services incorporate a unique set of applications designed to help clients maintain and direct their business practices relating to home video products. Entertainment content is distributed to various retailers primarily on behalf of motion picture studios. We track and report performance of home entertainment products leased directly to video retailers or through our Pay-Per-Transaction ("PPT") System. Within this system, video retailers ("Participating Retailers") are given access to a wide selection of box office hits, independent releases and foreign films from the industry's leading suppliers ("Program Suppliers") on a revenue sharing basis. By providing second- and third-tier retailers the opportunity to acquire new inventory in the same manner as major national chains, our PPT System enables retailers everywhere, regardless of size, to increase both the depth and breadth of their inventory, better satisfy consumer demand and more effectively compete in the marketplace. We lease product from our Program Suppliers; Participating Retailers sublease that product from us and rent it to consumers. Participating Retailers then share a portion of the revenue from each retail rental transaction with us and we share a portion of the revenue with the Program Suppliers. Our PPT System supplies both content providers and retailers with the intelligence and infrastructure necessary to make revenue sharing a viable and productive option.

Our HE Division also includes our rental Studio Direct Revenue Sharing ("DRS") services, which grants content providers constant, clear feedback and data, plus valuable checks and balances on how both their video products and retailers are performing. Data relating to rented entertainment content is received on physical product under established agreements on a fee for service basis.

During the fourth quarter of Fiscal 2012, Digital Download Essentials and Home Entertainment Essentials was moved from the HE Division to the AMI Division effective April 1, 2011 as a result of a change in our internal management reporting structure. As a result, all prior periods have been restated to reflect this change. Also during the fourth quarter of Fiscal 2012, we reorganized our international offices and incurred costs of $1.1 million, which are included in selling and administrative costs on our Consolidated Statements of Operations. As a result of this reorganization, we expect improved results from our foreign operations.

See "Forward-Looking Statements" on page 2.

AMI Division

Our media measurement services, offered primarily on a recurring subscription basis, are distributed to clients through patent pending software systems and business processes, and capture data and other intelligence viewed on multiple screens across various platforms within the entertainment, television and advertising industries.

Our current spending, investments and long-term strategic planning are heavily focused on the development, growth and expansion of our AMI Division, both domestically and internationally. As such, we continue to allocate significant resources to our Entertainment Essentials™ services and product lines. Our AMI Division revenue increased $6.8 million, or 19.8%, in Fiscal 2012 compared to Fiscal 2011.

The AMI Division lines of business are:

• Box Office Essentials™;

• OnDemand Essentials™, and related OnDemand Everywhere products; and

• TV Essentials™, which includes StationView Essentials.

Typical clients subscribing to our services include motion picture studios, television networks and stations, cable and telco operators, advertisers and advertising agencies.

HE Division

The financial results from the HE Division continue to be affected by the changing dynamics in the home video rental market as well as overall economic trends and conditions. This market is highly competitive and influenced greatly by consumer spending patterns and behaviors. The end consumer has a wide variety of choices from which to select entertainment content and can easily shift from one provider to another. Some examples include renting product from our Participating Retailers or other retailers, purchasing previously viewed Units from our Participating Retailers or other retailers, renting or purchasing product from kiosk locations, ordering product via online subscriptions and/or online distributors (mail delivery), subscribing to at-home movie channels, downloading or streaming content via the Internet, purchasing and owning the Unit directly, or selecting an at-home "pay-per-view" or "on demand" option from a satellite or cable provider. Our PPT System focuses primarily on the traditional "brick and mortar" retailer.

End consumers' usage of other options for obtaining entertainment content, such as kiosks, continues to increase and our Participating Retailers' market share has been negatively affected. Thus, for the foreseeable future, we expect revenue from our HE Division to continue to decline.

The landscape of the home video rental market for "brick and mortar" retailers has seen significant changes. In the first half of calendar year 2010, a major retailer, Movie Gallery, closed all of its 2,000 stores. Also, Blockbuster Entertainment ("Blockbuster") closed approximately 1,300 retail locations. In April 2011, Blockbuster's assets were acquired by DISH Network Corporation ("DISH"). While DISH continues to operate the remaining locations, in February 2012 it announced that it will close additional stores. Although Movie Gallery and Blockbuster were not direct customers of ours, as a result of these closures, we believe the major "brick and mortar" retailers' share of the overall industry is contracting. It is difficult to predict what effect, if any, this will have on our Program Suppliers and/or the performance of our Participating Retailers.

For the many regional chains and independent retailers who rent home entertainment products (DVD, Blu-ray and video games) ("Units") to consumers, it is more effective to acquire "new release" rental inventory on a lease basis instead of purchasing the inventory. Our PPT System provides Participating Retailers the opportunity to increase both the depth and breadth of their inventory, better satisfy consumer demand and more effectively compete in the marketplace. Also, many of our arrangements are structured so that the Participating Retailers pay reduced upfront fees and lower per transaction fees in exchange for ordering Units of all titles offered by a particular Program Supplier (referred to as "output" programs).

In general, we continue to be in good standing with our Program Suppliers, and we make ongoing efforts to strengthen those business relationships through enhancements to our current service offerings and the development of new service offerings. We are also continually seeking to develop business relationships with new Program Suppliers. Our relationships with Program Suppliers typically may be terminated without cause upon thirty days' written notice by either party.

Sources of Revenue

Revenue by segment includes the following:

AMI Division

Subscription fee and other revenue, primarily relating to custom reports, from:

• Box Office Essentials™;

• OnDemand Essentials™, and related OnDemand Everywhere products, and

• TV Essentials™, which includes StationView Essentials.

HE Division

•          Transaction fees, which are generated when Participating Retailers
           rent Units to consumers. Additionally, certain arrangements include
           guaranteed minimum revenue from our customers, which are recognized on
           the street (release) date, provided all other revenue recognition
           criteria are met;


•          Sell-through fees, which are generated when Participating Retailers
           sell previously-viewed rental Units to consumers and/or buy-out fees
           generated when Participating Retailers purchase Units at the end of
           the lease term;


•          DRS fees, which are generated from data tracking and reporting
           services provided to Program Suppliers; and


•          Other fees, which primarily include order processing fees, which are
           generated when Units are ordered by, and distributed to, Participating
           Retailers.



Results of Operations

                                                                      Year Ended March 31, (1)
                                                  2012                          2011                          2010
(Dollars in thousands)                  Dollars      % of revenue     Dollars      % of revenue     Dollars      % of revenue
Revenue:
AMI Division                           $ 41,415          45.5  %     $ 34,584          35.6  %   $ $ 19,979          21.9  %
HE Division                              49,656          54.5          62,504          64.4          71,097          78.1
                                         91,071         100.0          97,088         100.0          91,076         100.0
Cost of sales                            48,125          52.8          54,853          56.5          58,277          64.0
Gross margin                             42,946          47.2          42,235          43.5          32,799          36.0
Operating expenses:
Selling and administrative               48,854          53.6          44,838          46.2          33,723          37.0
Loss from operations                     (5,908 )        (6.5 )        (2,603 )        (2.7 )          (924 )        (1.0 )
Other income:
Interest income, net                        477           0.5             470           0.5           1,151           1.3
Other, net                                    -             -             125           0.1               -             -
Income (loss) before income taxes        (5,431 )        (6.0 )        (2,008 )        (2.1 )           227           0.2
Income tax provision (benefit)              995           1.1          (1,241 )        (1.3 )          (349 )        (0.4 )
Net income (loss)                      $ (6,426 )        (7.1 )%     $   (767 )        (0.8 )%   $ $    576           0.6  %

(1) Percentages may not add due to rounding.

Revenue

Revenue decreased $6.0 million, or 6.2%, to $91.1 million in Fiscal 2012 compared to $97.1 million in Fiscal 2011. The decrease in revenue was primarily due to a decline in revenue from our HE Division, partially offset by an increase in AMI revenue primarily related to growth in our existing lines of business. These fluctuations are described in more detail below.

Revenue increased $6.0 million, or 6.6%, to $97.1 million in Fiscal 2011 compared to $91.1 million in Fiscal 2010. The increase in revenue was due to an increase in AMI revenue related to our acquisition of Nielsen EDI Limited and certain assets of The Nielsen Company (United States), LLC (the "EDI Business") in the fourth quarter of Fiscal 2010, as well as growth in other AMI lines of business, partially offset by declines in revenue from the HE Division as described in more detail below.

AMI Division

Revenue related to our Entertainment Essentials™ business information service offerings increased in both comparable periods

primarily due to our continued investment in and successful marketing of these offerings. We expect continued future increases in our Entertainment Essentials™ revenue as a result of further investments, development and expansion of new and existing services, both domestically and internationally.

Revenue information related to our AMI Division was as follows (dollars in thousands):

                           Year Ended March 31,         Dollar
                             2012            2011       Change    % Change
Box Office Essentials™ $    21,046         $ 18,255    $ 2,791     15.3%
OnDemand Essentials™        11,143           10,537        606      5.8%
TV Essentials™               9,226            5,792      3,434     59.3%
                       $    41,415         $ 34,584    $ 6,831     19.8%



                           Year Ended March 31,          Dollar
                             2011            2010        Change     % Change
Box Office Essentials™ $    18,255         $  8,139    $ 10,116      124.3%
OnDemand Essentials™        10,537            8,400       2,137      25.4%
TV Essentials™               5,792            3,215       2,577      80.2%
All Other                        -              225        (225 )   (100.0)%
                       $    34,584         $ 19,979    $ 14,605      73.1%

The increase in Box Office Essentials™ revenue in Fiscal 2012 compared to Fiscal 2011 was primarily due to the addition of new clients and rate increases for existing clients, as well as our acquisition of Ciné Chiffres in the third quarter of Fiscal 2011, which contributed $0.1 million to the increase.

The increase in Box Office Essentials™ revenue in Fiscal 2011 compared to Fiscal 2010 was primarily due to our acquisition of the EDI Business in the fourth quarter of Fiscal 2010, which contributed $11.5 million and $1.8 million in Fiscal 2011 and Fiscal 2010, respectively. Our acquisition of Ciné Chiffres in the third quarter of Fiscal 2011 contributed $0.1 million to the increase. Subscription fees revenue also increased as a result of rate increases for existing accounts.

The increase in OnDemand Essentials™ revenue in Fiscal 2012 compared to Fiscal 2011 was due primarily to rate increases for existing clients, as well as the addition of new clients. These factors were partially offset by a large non-recurring custom project in Fiscal 2011.

The increase in OnDemand Essentials™ revenue in Fiscal 2011 compared to Fiscal 2010 was due to a combination of adding new clients, providing custom reports and securing rate increases for existing clients.

The increase in TV Essentials™ revenue in Fiscal 2012 compared to Fiscal 2011 was primarily due to the addition of new clients, including local stations, networks and advertising agencies.

The increase in TV Essentials™ revenue in Fiscal 2011 compared to Fiscal 2010 was primarily due to the addition of clients who subscribe to our systems and other fees relating to periodic custom work.

HE Division

Revenue information related to our HE Division was as follows (dollars in
thousands):

                      Year Ended March 31,          Dollar
                        2012            2011        Change      % Change
Transaction fees  $    30,633         $ 40,175    $  (9,542 )   (23.8)%
Sell-through fees       7,937            9,993       (2,056 )   (20.6)%
DRS                     5,629            5,799         (170 )    (2.9)%
Other                   5,457            6,537       (1,080 )   (16.5)%
                  $    49,656         $ 62,504    $ (12,848 )   (20.6)%

                      Year Ended March 31,          Dollar
                        2011            2010        Change     % Change
Transaction fees  $    40,175         $ 46,824    $ (6,649 )   (14.2)%
Sell-through fees       9,993           11,255      (1,262 )   (11.2)%
DRS                     5,799            5,081         718      14.1%
Other                   6,537            7,937      (1,400 )   (17.6)%
                  $    62,504         $ 71,097    $ (8,593 )   (12.1)%

The decrease in transaction fees in Fiscal 2012 compared to Fiscal 2011 was primarily due to fewer rental transactions at our Participating Retailers, which decreased by 22.4%. Units with minimum guarantees also declined, resulting in a decrease in revenues of $0.6 million, primarily due to the timing and number of major motion picture releases. The decrease in rental transactions was due to fewer Participating Retailers, fewer available Units and lower box office performance from theatrical titles in Fiscal 2012 compared to Fiscal 2011, as well as continued changing market conditions. Also, Warner Brothers decided to release its video content in the retail channel before offering it to the rental market, which had a negative impact on the number of Units available to us and represented 5.5% of the decline in revenue. We expect this decision to continue to negatively impact our PPT business for Fiscal 2013.

The decrease in transaction fees in Fiscal 2011 compared to Fiscal 2010 was primarily due to fewer rental transactions at our Participating Retailers, which decreased by 16.3%, partially offset by a 3.6% increase in the rate per transaction, which excludes the impact of minimum guarantees. Minimum guarantees increased $0.3 million in Fiscal 2011 compared to Fiscal 2010 due to the timing and number of major motion picture releases. The decrease in rental transactions was due to fewer Participating Retailers, as well as continued changing market conditions.

The decrease in sell-through fees in Fiscal 2012 compared to Fiscal 2011 was due to a 22.5% decrease in sell-through volume, as well as a 19.4% decrease in the number of Units purchased at end-of-term, both as a result of overall declines in Units available for sale. In addition, we experienced a 1.7% decrease in the average rate per transaction in Fiscal 2012 compared to Fiscal 2011, primarily due to a shift in the mix of available Units from our Program Suppliers.

The decrease in sell-through fees in Fiscal 2011 compared to Fiscal 2010 was primarily due to a decrease in sell-through volume and the overall rate per transaction. The decrease in sell-through volume was primarily due to an overall decline in Units available for sale. The number of transactions decreased 10.8% in Fiscal 2011 compared to Fiscal 2010, and the rate per transaction decreased 3.3%.

The decrease in DRS revenue in Fiscal 2012 compared to Fiscal 2011 was due to fewer transactions, primarily as a result of a decline in transactions from Blockbuster, offset by an increase in revenue of $0.8 million as a result of our acquisition of Media Salvation during the fourth quarter of Fiscal 2011.

The increase in DRS revenue in Fiscal 2011 compared to Fiscal 2010 was primarily due to higher volumes of transactions from online retailers and the addition of kiosk transactions in Fiscal 2011, partially offset by fewer transactions as a result of Movie Gallery's store closures. The increase also reflects our acquisition of Media Salvation, which contributed $0.3 million to the increase.

The decrease in other revenue in Fiscal 2012 compared to Fiscal 2011 and in Fiscal 2011 compared to Fiscal 2010 related primarily to reduced order processing fees as a result of the overall reduction in available Units.

Cost of Sales and Gross Margins

Cost of sales represents the direct costs to produce revenue.

In the AMI Division, cost of sales includes costs associated with certain Entertainment Essentials™ business information offerings, and consists of costs associated with the operation of a call center for our Box Office Essentials™ services, as well as costs associated with amortizing capitalized internally developed software used to provide the corresponding services and direct costs incurred to obtain, cleanse, process and integrate data as well as maintain our systems.

In the HE Division, cost of sales includes Unit costs, transaction costs, sell-through costs and freight costs. Sell-through costs represent the amounts due to the Program Suppliers that hold the distribution rights to the Units. Freight costs represent the cost

to pick, pack and ship orders of Units to the Participating Retailers. Our cost of sales can also be affected by the release dates of Units with guarantees. We recognize the guaranteed minimum costs on the release date. The terms of some of our agreements result in 100% cost of sales on titles in the first month in which the Unit is released, which results in lower margins during the initial portion of the revenue sharing period. Once the Unit's rental activity exceeds the required amount for these guaranteed minimums, margins generally expand during the second and third months of the Unit's revenue sharing period. However, since these factors are highly dependent upon the quality, timing and release dates of all new products, margins may not expand to any significant degree during any reporting period. As a result, it is difficult to predict the impact these Program Supplier revenue sharing programs with guaranteed minimums will have on future results of operations in any reporting period.

Cost of sales decreased $6.7 million, or 12.3%, in Fiscal 2012 compared to Fiscal 2011 and decreased $3.4 million, or 5.9%, in Fiscal 2011 compared to Fiscal 2010.

Cost of sales information related to our AMI Division follows (dollars in thousands):

                                              Year Ended March 31,            Dollar
                                              2012              2011          Change      % Change
Costs related to:
Amortization of internally developed
software                                $     2,162         $    1,746     $      416      23.8%
Call center operation                         4,793              4,506            287       6.4%
Obtaining, cleansing and processing
data                                          7,814              5,018          2,796      55.7%
                                        $    14,769         $   11,270     $    3,499      31.0%



                                               Year Ended March 31,             Dollar
                                               2011               2010          Change      % Change
Costs related to:
Amortization of internally developed
software                                $      1,746          $    1,309     $      437      33.4%
Call center operation                          4,506               2,668          1,838      68.9%
Obtaining, cleansing and processing
data                                           5,018               2,869          2,149      74.9%
                                        $     11,270          $    6,846     $    4,424      64.6%

The increase in costs of sales within the AMI Division in Fiscal 2012 compared to Fiscal 2011 resulted primarily from arrangements with some of our data suppliers that provide for cost increases as our revenue increases, the conversion of a data supplier agreement from a variable arrangement to a fixed-fee arrangement in December 2010, and increases in costs related to obtaining, cleansing and processing data due to arrangements in place with data providers.

The increase in costs of sales within the AMI Division in Fiscal 2011 compared to Fiscal 2010 resulted primarily from increased costs related to our call center operations and obtaining, cleansing and processing data. The increased costs in our call center operation were primarily due to the addition of the EDI Business, which operates call centers in numerous foreign locations. The increase in costs related to obtaining, cleansing and processing data was primarily due to growth in our service offerings and revenue sharing arrangements in place with data providers.

Cost of sales information related to our HE Division follows (dollars in thousands):

                      Year Ended March 31,          Dollar
                        2012            2011        Change      % Change
Costs related to:
Transaction fees  $    22,904         $ 30,472    $  (7,568 )   (24.8)%
Sell-through fees       5,976            7,806       (1,830 )   (23.4)%
Other                   4,476            5,305         (829 )   (15.6)%
                  $    33,356         $ 43,583    $ (10,227 )   (23.5)%

                      Year Ended March 31,          Dollar
                        2011            2010        Change     % Change
Costs related to:
Transaction fees  $    30,472         $ 35,603    $ (5,131 )   (14.4)%
Sell-through fees       7,806            9,140      (1,334 )   (14.6)%
Other                   5,305            6,688      (1,383 )   (20.7)%
                  $    43,583         $ 51,431    $ (7,848 )   (15.3)%

The decreases in cost of sales within the HE Division in Fiscal 2012 and Fiscal 2011 were primarily related to the decreases in revenue discussed above.

Gross margins as a percentage of divisional revenues were as follows:

              2012      2011    2010
AMI Division 64.3%     67.4%    65.7%
HE Division  32.8%     30.3%    27.7%

The decrease in gross margin in the AMI Division in Fiscal 2012 compared to Fiscal 2011 was primarily due to increased costs associated with one of our data provider agreements, which converted to a fixed fee agreement in the third quarter of Fiscal 2011, and higher costs associated with amortization of our internally developed systems.

The increase in gross margin in the AMI Division in Fiscal 2011 compared to Fiscal 2010 was primarily due to the increase in revenue, partially offset by a $0.7 million charge in the third quarter of Fiscal 2011 related to an amendment to an agreement with one of our data providers. This amendment allows us to provide more robust information reporting to our clients and furthers our efforts toward moving our products from data- to knowledge-based products and services that interpret this data. Additionally, the agreement was converted from a variable agreement based on revenue to a fixed-fee arrangement.

The increase in gross margin in the HE Division in Fiscal 2012 compared to Fiscal 2011 was primarily due to fewer total available and rented Units . . .