================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549
                                   FORM 10-K/A
                                 Amendment No. 1
                              --------------------
              [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                    For the Fiscal Year Ended: March 31, 2004
                                       OR
          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number: 0-15159

                               RENTRAK CORPORATION
             (Exact name of registrant as specified in its charter)

                  Oregon                                   93-0780536
      (State or other jurisdiction of                   (I.R.S. Employer
               incorporation                           Identification No.)
             or organization)

  7700 NE Ambassador Place, Portland, Oregon                  97220
   (Address of principal executive offices)                 (Zip Code)

        Registrant's telephone number, including area code: 503-284-7581

        Securities registered pursuant to Section 12(b) of the Act: None
          Securities registered pursuant to Section 12(g) of the Act:
                         Common Stock, $0.001 par value
                              --------------------

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by  reference in Part III of this Form 10-K,  or any  amendment to
this Form 10-K. [ ]

Indicate  by check mark  whether  the  Registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act).
Yes [ ] No [ X ]

The aggregate  market value of the voting and  non-voting  common equity held by
non-affiliates,  computed  by  reference  to the last  sales  price  ($6.99)  as
reported by the Nasdaq  National  Market System,  as of the last business day of
the Registrant's  most recently  completed second fiscal quarter  (September 30,
2003), was $64,623,214.

The number of shares outstanding of the Registrant's Common Stock as of June 25,
2004 was 9,802,655 shares.

                       Documents Incorporated by Reference
The  Registrant  has  incorporated  into Part III of Form  10-K,  by  reference,
portions of its Proxy  Statement  for its 2004 Annual  Meeting of  Shareholders.


================================================================================

<PAGE>

                            Explanation of Amendment

      We are filing this  Amendment  No. 1 on Form  10-K/A (the "Form  10-K/A"),
amending our Annual Report on Form 10-K for the fiscal year ended March 31,
2004, as originally filed on July 14, 2004 (the "Original 10-K"), primarily to:

     o      Clarify and expand the  explanation in Items 1, 6, 7 and 8 regarding
            the reasons for and the periods  affected by the  restatement of our
            consolidated  financial  statements for the fiscal years ended March
            31, 2002 and 2003 and the first, second and third quarters of fiscal
            2004. For further  discussion see  "Restatements" in Item 7, as well
            as Note 4 to our  consolidated  financial  statements and "Quarterly
            Financial Data" in Item 8, of the Form 10-K/A.

     o      Provide  additional  disclosure  regarding  our  direct  advertising
            expenses  and  amounts  reimbursed  by our  program  suppliers.  For
            further  discussion,  see  "Advertising  Expense"  in  Note 8 to our
            consolidated financial statements in Item 8 of the Form 10-K/A.

     o      Clarify in Item 9A "Controls and Procedures" management's conclusion
            that our  disclosure  controls and  procedures  were  ineffective at
            March 31, 2004 for the reasons described in that item.

      Other than the changes to the notes to our audited consolidated  financial
statements described above, the financial statements in the Form 10-K/A have not
changed from those  contained in the Original  10-K.  Also,  none of the amounts
discussed  in  Item 7  "Management's  Discussion  and  Analysis  of  Results  of
Operations  and  Financial  Condition"  have changed from those  included in the
Original 10-K.

      We are concurrently filing Amendment No. 1 to our Quarterly Report on Form
10-Q for the quarter ended June 30, 2004,  originally  filed on August 16, 2004,
to provide expanded disclosure comparable to that included in this Form 10-K/A.

      The  following  sections of this Form 10-K/A  have been  revised  from the
Original 10-K:

      o     Item 1  -  Business

      o     Item 6  -  Selected Financial Data

      o     Item 7  -  Management's   Discussion   and   Analysis  of  Financial
                       Condition and Results of Operations

      o     Item 8  -  Financial Statements and Supplementary Data

      o     Item 9A -  Controls and Procedures

      o     Item 15 -  Exhibits, Financial Statement Schedules

      o     Exhibit Index

Except as set forth above, this Form 10-K/A continues to speak as of the date of
the filing of the  Original  10-K,  July 14,  2004,  and we have not updated the
disclosures contained herein to reflect any events that have occurred since that
date.  For a discussion of more recent events and  developments,  please see our
reports filed with the SEC since July 14, 2004.

                                       1

<PAGE>


                               RENTRAK CORPORATION
                         2004 FORM 10-K/A ANNUAL REPORT
                                TABLE OF CONTENTS

                                                                       Page
                                    PART I

Item 1.    Business                                                     3

Item 2.    Properties                                                   *

Item 3.    Legal Proceedings                                            *

Item 4.    Submission of Matters to a Vote of Security Holders          *

                                   PART II

Item 5.    Market for Registrant's Common Equity, Related
           Stockholder Matters and Issuer Purchases of Equity           *
           Securities

Item 6.    Selected Financial Data                                      8

Item 7.    Management's Discussion and Analysis of Financial            10
           Condition and Results of Operations

Item 7A.   Quantitative and Qualitative Disclosures About Market        *
           Risk

Item 8.    Financial Statements and Supplementary Data                  21

Item 9.    Changes in and Disagreements With Accountants on
           Accounting and Financial Disclosure                          *

Item 9A.   Controls and Procedures                                      48

                                   PART III

Item 10.   Directors and Executive Officers of the Registrant           *

Item 11.   Executive Compensation                                       *

Item 12.   Security Ownership of Certain Beneficial Owners and
           Management and Related Stockholder Matters                   *

Item 13.   Certain Relationships and Related Transactions               *

Item 14.   Principal Accountant Fees and Services                       *

                                   PART IV
Item 15.   Exhibits, Financial Statement Schedules and Reports on       51
           Form 8-K

Signatures                                                              52

* Not included in Form 10-K/A

                                       2

<PAGE>


                                     PART I

ITEM 1.      BUSINESS

Where You Can Find More Information

We file  annual,  quarterly  and  other  reports,  proxy  statements  and  other
information  with the  Securities  and  Exchange  Commission  ("SEC")  under the
Securities Exchange Act of 1934 as amended ("Exchange Act"). You can inspect and
copy our reports, proxy statements,  and other information filed with the SEC at
the offices of the SEC's  Public  Reference  Room  located at 450 Fifth St., NW,
Room 1024,  Washington D.C.  20549.  Please call the SEC at  1-800-SEC-0330  for
further  information on the Public  Reference  Rooms.  The SEC also maintains an
Internet  website at  http://www.sec.gov/  where you can obtain  most of our SEC
filings.   We  also  make   available,   free  of  charge  on  our   website  at
www.rentrak.com, our annual report on Form 10-K, quarterly reports on Form 10-Q,
current  reports on Form 8-K, and amendments to those reports filed or furnished
pursuant to Section  13(a) or 15(d) of the  Exchange  Act as soon as  reasonably
practicable  after  they are  filed  electronically  with the SEC.  You can also
obtain  copies  of these  reports  by  contacting  Investor  Relations  at (503)
284-7581.

Overview

Our primary business  continues to be the collection,  processing,  analysis and
presentation   of  rental  and  sales   information   regarding   videocassettes
("Cassettes"),  digital  videodiscs  ("DVDs"),  and  Video  Games  (collectively
"Units")  leased/licensed  to home video specialty stores and other retailers by
way of our Pay Per Transaction system (the "PPT System").  Under our PPT System,
home video  specialty  stores and other  retailers  that rent Units to consumers
("Retailers"),  including grocery stores and convenience stores, lease Units and
other  media  from  Rentrak  for a low  initial  fee and share a portion of each
retail rental  transaction  with us. We included  Video Games as part of the PPT
system  in fiscal  2003.  Our PPT  System  generated  84%,  78% and 73% of total
revenues in fiscal years 2004, 2003 and 2002, respectively.

We also provide direct revenue  sharing ("DRS")  services to various  suppliers.
The DRS services collect,  track,  audit and report the results to our suppliers
under  established  agreements  on a fee for service  basis.  In  addition,  our
Essentials(TM)  software  and  services,  which we began  offering in the fourth
quarter of fiscal 2003, provide unique data collection, management, analysis and
reporting functions,  resulting in business intelligence information valuable to
our clients.

During the fourth quarter of fiscal 2003, we decided to pursue a plan to sell or
dispose of substantially all the assets of our subsidiary 3PF.COM, Inc. ("3PF"),
which provided order processing,  inventory  management and fulfillment services
to Rentrak  and third  parties.  We sold  substantially  all the assets of 3PF's
Wilmington,  Ohio  operations in July 2003. See Note 5 of Notes to  Consolidated
Financial Statements.

Restatement

Our fiscal 2003, 2002, 2001 and 2000 financial  statements have been restated as
discussed  further  in Note 4 of  Notes  to  Consolidated  Financial  Statements
included in Item 8 and in Item 7.

Pay-Per-Transaction System

We distribute  Units  principally to home video specialty  stores  ("Retailers")
through our PPT System.  The PPT System  enables  Retailers to obtain Units at a
significantly  lower  initial  cost  than  if  they  purchased  the  Units  from
traditional video distributors.

After the Retailer is approved for  participation  in the PPT System,  Units are
leased to the Retailer for a low initial fee (the "Order Processing Fee") plus a
percentage of revenues  generated by the Retailer from rentals to consumers (the
"Transaction  Fee").  We  retain a  portion  of each  Order  Processing  Fee and
Transaction  Fee and remit  the  remainder  to the  appropriate  motion  picture
studios or other  licensee or owner of the rights to certain video  programming,
or video  game  publishers,  ("Program  Suppliers")  that

                                       3

<PAGE>

hold the  distribution  rights to the Units.  Due to the lower cost of "bringing
Units in the door,"  Retailers  generally obtain a greater number of Units under
the PPT System than the traditional distribution method. The intended benefit to
the Retailer is a higher volume of rental  transactions,  as well as a reduction
in capital  cost and risk.  The intended  benefit to the Program  Supplier is an
increase in the total number of Units shipped,  resulting in increased  revenues
and  opportunity  for  profit.  The  intended  benefit  to the  consumer  is the
potential  of finding  more copies of certain  newly  released  hit titles and a
greater  selection of other titles at Retailers  participating in the PPT System
("Participating Retailers").

Direct Revenue Sharing

Our DRS services consist of data collection, tracking, auditing and reporting of
revenue sharing rental and sales  transactions of large retail chain video store
customers that rent Units and engage in revenue  sharing  arrangements  directly
with the Program  Suppliers.  The DRS services are offered to Program  Suppliers
who participate in our PPT System. We utilize our internally  developed computer
software and are compensated on a fee for service basis.

Business Intelligence Services

In the fourth  quarter of fiscal 2003, we began offering  business  intelligence
("BI")  services,  by taking  advantage of the capabilities we built through our
PPT System in the entertainment  industry. Our suite of BI software and services
consist  of  Box  Office  Essentials(TM),   VideoGame   Essentials(TM),   Retail
Essentials(TM),  VOD Essentials(TM),  Business  Intelligence  Essentials(TM) and
Supply  Chain  Essentials(TM)   (collectively,   the  "Essentials  software  and
services") for the entertainment  industry and beyond.  The Essentials  software
and  services  provides  custom  data  collection,   management,   analysis  and
reporting,  resulting  in  business  intelligence  information  valuable  to our
customers.

Marketing and Relationships with Program Suppliers

We currently market our PPT System  throughout the United States and Canada.  We
offer  substantially  all of the titles of a number of  non-Video  Game  Program
Suppliers,  including Buena Vista Pictures  Distribution,  Inc., a subsidiary of
The Walt Disney  Company,  Paramount Home Video,  Inc.,  Universal  Studios Home
Video, Inc.,  Twentieth Century Fox Home  Entertainment  (formerly Fox Video), a
subsidiary of Twentieth Century Fox Film Corporation, Warner Brothers, including
Warner Home Video,  HBO Video, New Line Home  Entertainment,  TNT, and Lightyear
Entertainment and MGM Home  Entertainment,  a subsidiary of Metro Goldman Mayer,
Inc. Our arrangements with all of our Program Suppliers are of varying duration,
scope and formality. In some cases, we have obtained Units pursuant to contracts
or arrangements  with Program  Suppliers on a title-by-title  basis and in other
cases the  contracts  or  arrangements  provide  that all  titles  released  for
distribution by such Program Supplier will be provided to us for the PPT System.
Many of our  agreements  with Program  Suppliers,  including  all major  Program
Suppliers, may be terminated upon relatively short notice.  Therefore,  there is
no assurance that any of the Program Suppliers will continue to distribute Units
through the PPT System, continue to have available for distribution titles which
we can distribute on a profitable basis, or continue to remain in business. Even
if titles are otherwise available from Program Suppliers,  there is no assurance
that they will be made  available  on terms  acceptable  to us.  During the last
three years, we have not experienced any material difficulty  acquiring suitable
Units for our markets on acceptable terms and conditions from Program Suppliers.
We have one Program  Supplier that supplied product that generated 22%, one that
generated 15%, one that generated 13% and one that generated 12% of our revenues
for the year ended  March 31,  2004.  During  fiscal  2003,  we had one  Program
Supplier that supplied  product that  generated 16% of our total  revenues,  two
that  generated 15% and a fourth that generated 11%. There were no other Program
Suppliers who provided  product that generated 10% or more of our total revenues
for the  year  ended  March  31,  2004.  Although  we do not  believe  that  our
relationships with these significant Program Suppliers will be terminated in the
near  term,  a loss of any of these  Program  Suppliers  could  have a  material
adverse effect on our results of operations.

Certain  Program  Suppliers have requested,  and we have provided,  financial or
performance  commitments,  including  advances or guarantees,  as a condition of
obtaining  certain titles. We determine whether to provide such commitments on a
case-by-case  basis,  depending  upon the Program  Supplier's  success with

                                       4

<PAGE>

such titles  prior to home video  distribution  and our  assessment  of expected
success in home rental  distribution.  We currently have such  commitments  with
three Program Suppliers for movies and three Program Suppliers for Video Games.

Significant Customers

We had one PPT customer  that  accounted  for 17% of our total revenue in fiscal
2004.  The  agreement  with this PPT  customer  expires in September  2004.  One
fulfillment  customer  accounted  for 14% and 11%,  respectively,  of our  total
revenue in fiscal 2003 and 2002.  The agreement with this  fulfillment  customer
expired July 31, 2003.  There were no other  customers that accounted for 10% or
more of our total revenue in fiscal 2004, 2003 and 2002.

Distribution of Cassettes, DVDs, and Video Games

Our  proprietary  Rentrak  Profit Maker  Software  (the "RPM  Software")  allows
Participating  Retailers  to order Units  through  their  Point of Sale  ("POS")
system  software and  provides  the  Participating  Retailers  with  substantial
information  regarding  all  offered  titles.  Ordering  occurs via a  networked
computer interface.  To further assist the Participating  Retailers in ordering,
we also produce a monthly product catalog called "Ontrak."

To be competitive,  Participating  Retailers must be able to rent their Units on
the "street  date"  announced by the Program  Supplier for the title.  Effective
April 1, 2004, we have  contracted  with a third party  fulfillment  provider to
distribute   our  Units  via  overnight  air  courier  to  assure   delivery  to
Participating  Retailers on the street date.  The handling and freight  costs of
such distribution comprise a portion of our cost of sales.

Computer Operations

To  participate  in  our  PPT  System,   Participating  Retailers  must  install
Rentrak-approved  computer  software and hardware to process all of their rental
and sale transactions.  Our RPM Software resides on the Participating Retailer's
POS  computer  system and  transmits a record of PPT  transactions  to us over a
telecommunications  network.  The RPM Software  also  assists the  Participating
Retailer in ordering  newly  released  titles and in managing  its  inventory of
Units.

Our information  system  processes these  transactions  and prepares reports for
Program  Suppliers  and  Participating  Retailers.  In addition,  it  determines
variations from  statistical  norms for potential audit action.  Our information
system also transmits  information on new titles and confirms orders made to the
RPM Software at the Participating Retailer location.

Auditing of Participating Retailers

From time to time, we audit Participating Retailers in order to verify that they
are  reporting  all rentals  and sales of Units on a  consistent,  accurate  and
timely basis.  Several different types of exception reports are produced weekly.
These  reports are designed to identify any  Participating  Retailers  whose PPT
business activity varies from our statistical norms.  Depending upon the results
of our analysis of the reports,  we may conduct an in-store audit. Audits may be
performed  with or without  notice and any refusal to allow such an audit can be
cause for immediate  termination  from the PPT System.  If audit  violations are
found, the  Participating  Retailer is subject to fines,  audit fees,  immediate
removal from the PPT System and/or repossession of all leased Units.

Seasonality

We believe  that the home video  industry  is highly  seasonal  because  Program
Suppliers  tend to  introduce  hit titles for movies at two periods of the year,
early summer and  Christmas.  Since the release of movies to home video  usually
follows the theatrical release by approximately six months (although significant
variations occur on certain titles), the seasonal peaks of movies for home video
also generally occur in early summer and at Christmas.  We believe our volume of
rental  transactions and resulting revenues and

                                       5

<PAGE>

earnings reflect,  in part, this seasonal pattern.  However,  changes in Program
Suppliers'  titles available to  Participating  Retailers and us may obscure any
seasonal effect.

Competition

The Cassette,  DVD, and Video Game distribution business is a highly competitive
industry that is rapidly changing.  The traditional method of distributing Units
to Retailers is through purchase transactions;  i.e., a Retailer purchases Units
from a  distributor  and then offers the Units for rental or sale to the general
public. As described in greater detail above (see "Pay-Per-Transaction System"),
our PPT System offers Participating Retailers an alternative method of obtaining
Units.  Accordingly,  we face intense  competition  from all of the  traditional
distributors,  including Ingram Entertainment, Inc., Video Product Distributors,
Inc., and Video One Canada,  Ltd. These and other traditional  distributors have
extensive  distribution  networks,   long-standing  relationships  with  Program
Suppliers and Retailers,  and, in some cases,  significantly  greater  financial
resources than us.

In the past, certain  traditional  distributors  offered Units to Retailers on a
revenue  sharing  basis.  To our  knowledge,  only  one  does so today on a very
limited basis. This distributor  executed a licensing  agreement with Supercomm,
Inc.  ("Supercomm"),  now a  wholly-owned  subsidiary  of Columbia  TriStar Home
Entertainment  ("Columbia"),   to  market  product  on  revenue  sharing  terms.
Domestically,  Supercomm also processes data for Columbia's direct relationships
with Blockbuster Video and several other Retailers.

We also face  direct  competition  from the  Program  Suppliers.  Several  major
Program   Suppliers  offer  Retailers   discounted   pricing  if  the  Retailers
substantially increase the quantity of Units purchased. Also, some major Program
Suppliers  have offered  Units to Retailers on a lease basis.  In addition,  all
major  Program  Suppliers  sell  Units  directly  to major  Retailers  including
Blockbuster,  the  world's  largest  chain of home video  specialty  stores.  We
believe  most  of the  major  Program  Suppliers  have  direct  revenue  sharing
arrangements  with Blockbuster and Hollywood  Entertainment,  the world's second
largest  chain of home video  specialty  stores.  We also  believe  that certain
Program  Suppliers have executed direct revenue sharing  agreements with several
other  large  Retailers.  We do not  believe  that the  Program  Suppliers  have
executed direct revenue sharing  agreements  with other smaller  Retailers,  but
there can be no assurance that they will not do so in the future.

The Program Suppliers also compete with us by releasing certain Unit titles on a
"sell-through"  basis; they bypass the traditional  rental period by selling the
Units  directly to  consumers  at a price of  approximately  $9.95 to $19.95 per
Unit. To date, such  "sell-through"  distribution  has generally been limited to
certain  newly  released hit titles with wide general  family  appeal.  However,
because our PPT business is partially  dependent  upon the existence of a rental
period,  a shift  toward such  "sell-through"  distribution,  particularly  with
respect to popular titles,  could have a material  adverse effect on our results
of operations and financial condition.

We also compete with  businesses that use  alternative  distribution  methods to
provide video entertainment  directly to consumers,  such as the following:  (1)
direct  broadcast  satellite   transmission   systems;   (2)  traditional  cable
television systems;  (3) pay-per-view cable television systems; and (4) delivery
of programming  via the Internet.  Each of these  distribution  methods  employs
digital  compression  techniques to increase the number of channels available to
consumers  and,  therefore,  the  number  of  movies  that  may be  transmitted.
Technological   improvements   in   this   distribution   method,   particularly
"video-on-demand," may make this option more attractive to consumers and thereby
materially diminish the demand for Unit rentals. Such a consequence could have a
material adverse effect on our results of operations and financial condition.

                                       6

<PAGE>


Formovies.com

Formovies.com  is a website  designed by us and dedicated to assist consumers in
finding a local  video  store  where  they can rent  and/or  purchase  the video
products  they want.  Consumers  can find a particular  movie of their choice by
searching  on  various  attributes  of that  title.  Once  found  they  can then
determine the closest video store that carries that product.

Trademarks, Copyrights, and Proprietary Rights

We have  registered  our  "RENTRAK,"  "PPT,"  "Pay Per  Transaction,"  "Ontrak,"
"BudgetMaker," "DataTrak," "Prize Find," "BlowOut Video," "Fastrak," "GameTrak,"
"RPM,"  "Videolink+,"  "Unless You're Rich Enough Already,"  "Sportrak," "Movies
For The Hungry Mind," "VidAlert," "Active Home Video," "Movie Wizard" and "Gotta
Have It  Guarantee"  marks under  federal  trademark  laws.  We have applied and
obtained  registered  status  in  several  foreign  countries  for  many  of our
trademarks.  We have filed  applications  to register  our various  "Essentials"
trademarks,  some of which are completed and the others  pending.  We have filed
patent  applications for our Box Office Essentials and VOD Essentials  software.
We claim a copyright on our RPM Software and consider it to be  proprietary.  We
have also filed  notice and claim a copyright  on our  Essentials  software.  We
believe that our intellectual property is important to our marketing efforts and
the competitive  value of our services and we intend to take appropriate  action
to halt any infringement or protect against improper usage.

Employees

As of March 31, 2004,  including  all  subsidiaries,  we employed 162  full-time
employees  and 30  part-time  employees.  We  consider  our  relations  with our
employees to be good.

Financial Information About Industry Segments

See Note 18 of Notes to the  Consolidated  Financial  Statements for information
regarding our business segments.

                                       7

<PAGE>


                                    PART II


<TABLE>
<CAPTION>

ITEM 6. SELECTED FINANCIAL DATA
(In Thousands Except Per Share Amounts)
                                               Year Ended March 31,
                                 ---------------------------------------------------------
                                   2004      2003         2002         2001         2000
                                 -------    -------     --------      -------     --------
Statement of Operations Data (1)          (restated)   (restated)    (restated)  (restated)
  Revenues:
<S>                              <C>        <C>          <C>          <C>          <C>
    Order processing fees        $ 7,741    $14,745     $ 16,893      $18,533     $ 22,331
    Transaction fees              46,398     42,258       44,102       55,752       61,476
    Sell-through fees             10,309      8,558        7,324        8,431        9,826
    Communication fees             1,127      1,185        1,136        1,509        2,099
    Fulfillment(2)                 4,624     15,266       15,342       20,137        8,337
    Other                          7,933      3,872       11,224        3,668        3,624
                                 -------    -------     --------      -------     --------
  Total revenues                  78,132     85,884       96,021      108,030      107,693
                                 -------    -------     --------      -------     --------
Operating expenses:

   Cost of sales                  60,090     71,347       71,913       85,993       87,157
   Selling and administrative
   expense                        16,357     14,434       17,266       31,002       25,360
   Net gain from litigation
   settlements                        --       (362)      (1,563)        (225)      (7,792)
   Asset impairment                   --        844          424           --           --
                                 -------    -------     --------      -------     --------
   Total operating expenses       76,447     86,263       88,040      116,770      104,725
                                 -------    -------     --------      -------     --------
   Income (loss) from
   continuing operations           1,685       (379)       7,981       (8,740)       2,968
   Other income (expense)            233        179        7,913       (2,149)      (1,389)
                                 -------    -------     --------      -------     --------
   Income (loss) from continuing
   operations before income tax
   (provision) benefit and loss
   from discontinued operations    1,918       (200)      15,894      (10,889)       1,579
   Income tax provision (benefit)    479        (56)       6,040       (4,057)         450
                                 -------    -------     --------      -------     --------
   Income (loss) from continuing   1,439       (144)       9,854       (6,832)       1,129
   operations
   Income (loss) from discontinued
   operations                       (129)      (583)        (792)        (259)       2,581
                                 -------    -------     --------      -------     --------
   Net income (loss)             $ 1,310    $  (727)    $  9,062      $(7,091)    $  3,710
                                 -------    -------     --------      -------     --------
Earnings (loss) per share:
  Basic:
     Continuing operations       $  0.15    $ (0.02)    $   0.95      $ (0.57)    $     11
     Discontinued operations       (0.01)     (0.06)       (0.08)       (0.02)        0.24
                                 -------    -------     --------      -------     --------
     Net income (loss)           $  0.14    $ (0.08)    $   0.87      $ (0.59)    $   0.35
                                 =======    =======     ========      =======     ========
  Diluted:
     Continuing operations       $  0.14    $ (0.02)    $   0.93      $ (0.57)    $   0.10
     Discontinued operations       (0.01)     (0.06)       (0.07)       (0.02)        0.24
                                 -------    -------     --------      -------     --------
     Net income (loss)           $  0.13    $ (0.08)    $   0.85      $ (0.59)    $   0.34
                                 =======    =======     ========      =======     ========
  Shares used to compute
  diluted EPS                     10,119      9,641       10,613       11,985       10,759

                                  2004       2003        2002          2001         2000
                                 -------    -------     --------      -------     --------
Balance Sheet Data (1)                     (restated)   (restated)   (restated)   (restated)

   Working capital               $14,633    $11,485     $ 12,515      $ 4,637     $  9,645
   Total assets                   36,363     31,488       40,094       38,623       50,299
   Long-term liabilities             235        668          496        1,175           --
   Stockholders' equity           18,796     16,047       18,116       12,158       18,365

</TABLE>

                                       8

<PAGE>

(1) Fiscal years 2000,  2001, 2002 and 2003 have been restated for correction of
    certain errors.  In addition,  certain expenses in fiscal 2003 and 2002 have
    been  reclassified.  In  May  and  June  2004,  we  discovered  that  we had
    misinterpreted  and misapplied certain terms of some of our Program Supplier
    revenue sharing  agreements.  These  misinterpretations  and misapplications
    resulted in the  miscalculation of Program Supplier  liabilities and related
    cost of sales and,  therefore,  net income  (loss).  There were two  general
    types of misinterpretations  or misapplications:  (i) over reporting cost of
    sales  and  overstating  assets  and  understating  liabilities  due  to the
    misapplication  of certain  terms in our Program  Supplier  revenue  sharing
    agreements;  and (ii) under reporting cost of sales and related  liabilities
    due to the misuse of contract  information in recognizing  our guarantees to
    one Program Supplier.  These restatements  affected cost of sales as follows
    (in thousands):

<TABLE>
<CAPTION>
                                                         Year Ended March 31,
                                                  ----------------------------------
   Increase  (decrease) to cost of sales due to:
   ---------------------------------------------   2003     2002     2001      2000
                                                  ------   ------   -------   ------
<S>                                               <C>      <C>      <C>       <C>
   Misapplication of certain terms of Program
   Supplier revenue sharing agreements            $ (724)  $ (840)  $  (792)  $ (460)
   Misuse of contract information in recognizing
   our guarantees to one Program Supplier            963      737        --       --
                                                  ------   ------   -------   ------
   Net increase (decrease) to income
   (loss) from operations                         $ (239)  $  103   $   792   $  460
                                                  ======   ======   =======   ======
</TABLE>

Also in June 2004, we discovered  that we were not  accounting for certain order
processing  fees received from our  customers  upon "street  date," which is the
date that they are able to rent the title  pursuant  to SOP 00-2.  Our  previous
method had been to recognize  revenue on the shipment  date.  This resulted in a
restatement of revenue between periods as follows (in thousands):

                                              Year Ended March 31,
                                        ----------------------------------
                                         2003    2002      2001      2000
                                        ------  ------    ------    ------
   Increase (decrease) to revenue       $ (274) $   27   $   (30)  $    --
   Increase (decrease) to cost of sales   (206)    (21)      (23)       --
                                        ------  -------  --------  -------
   Net increase (decrease) to income    $  (68) $    6   $    (7)  $    --
   (loss) from operations               ======  =======  ========  =======

In addition,  in connection with the  embezzlement  of funds by an employee,  as
discussed  in  more  detail  in  Note  16 of  Notes  to  Consolidated  Financial
Statements  included  in Item 8, we  underreported  our sales tax  liability  in
fiscal  2003 by  $62,000.  We record our sales tax  liabilities  as an offset to
revenue.

Following is a reconciliation,  giving effect to all of the restatements, of our
revenue, income from operations and net income (in thousands):

<TABLE>
<CAPTION>
                                                                         Year Ended March 31,
                                                                -------------------------------------
                                                                  2003      2002      2001     2000
                                                                -------   -------  --------  --------
<S>                                                             <C>       <C>      <C>       <C>
   Revenue as previously reported                               $86,220   $95,994  $108,060  $107,693
   Net effect of restatements                                      (336)       27       (30)       --
                                                                -------   -------  --------  --------
   Revenue as restated                                          $85,884   $96,021  $108,030  $107,693
                                                                =======   =======  ========  ========
   Income (loss) from operations as previously reported         $   (10)  $ 7,872  $ (9,525) $  2,508
   Net effect of restatements                                      (369)      109       785       460
                                                                -------    ------  --------   -------
   Income (loss) from operations as restated                    $  (379)  $ 7,981  $ (8,740) $  2,968
                                                                =======   =======  ========  ========
   Net income (loss) as previously reported                     $  (498)  $ 8,994  $ (7,577) $  3,425
   Net effect of restatements                                      (229)       68       486       285
                                                                -------   -------  --------  --------
   Net income (loss) as restated                                $  (727)  $ 9,062  $ (7,091) $  3,710
                                                                -------   -------  --------  --------
   Basic net income (loss) per share  as previously reported    $ (0.05)  $  0.86  $  (0.63) $   0.33
                                                                -------   -------  --------  --------
   Diluted net income (loss) per share  as previously reported  $ (0.05)  $  0.85  $  (0.63) $   0.32
                                                                -------   -------  --------  --------
   Basic net income (loss) per share as restated                $ (0.08)  $  0.87  $  (0.59) $   0.35
                                                                -------   -------  --------  --------
   Diluted net income (loss) per share as restated              $ (0.08)  $  0.85  $  (0.59) $   0.34
                                                                =======   =======  ========  ========
</TABLE>
                                        9
<PAGE>

The restatements did not affect cash flows from operations, investing activities
or financing  activities in any fiscal year. For details on the  restatements of
our first,  second and third quarters of fiscal 2004,  see "Quarterly  Financial
Data." See also Note 4 of Notes to Consolidated Financial Statements included in
Item 8 for more detail on the restatements in fiscal 2003 and 2002.

(2)  We sold our fulfillment  business  effective July 2003. See Note 5 of Notes
     to Consolidated Financial Statements.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

Forward Looking Statements

Certain  information  included  in this  Annual  Report on Form 10-K  (including
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations   regarding  revenue  growth,  gross  profit  margin  and  liquidity)
constitute  forward-looking  statements  that  involve  a number  of  risks  and
uncertainties.  Forward  looking  statements  may be  identified  by the  use of
forward-looking   words   such   as   "may,"   "will,"   "expects,"   "intends,"
"anticipates,"  "estimates" or "continues" or the negative thereof or variations
thereon or comparable  terminology.  The following factors are among the factors
that could cause actual results to differ  materially  from the  forward-looking
statements:  our ability to retain and grow our Participating  Retailer customer
base and customers  for our business  intelligence  software and  services,  the
financial  stability of the  Participating  Retailers and their  performance  of
their  obligations  under the PPT  System,  non-renewal  of our line of  credit,
business  conditions  and  growth in the video  industry  and  general  economic
conditions,  both domestic and  international;  competitive  factors,  including
increased competition,  expansion of revenue sharing programs other than the PPT
System by Program  Suppliers,  new technology and the continued  availability of
Units from Program Suppliers.  This Annual Report on Form 10-K further describes
some of  these  factors.  (References  to Notes  are to  Notes  to  Consolidated
Financial Statements included in Item 8 of this report.)

Business Trends

Our financial  results for fiscal 2004 have been, and we expect them to continue
to be for fiscal 2005,  affected by the changing  dynamics in the home video and
game rental market,  as they impact our PPT business.  We continue to experience
the impact of the  migration  from higher  historical  rentals of  Cassettes  to
greater rentals of DVDs by our  Participating  Retailers.  We have  successfully
implemented   new  agreements   with  Program   Suppliers  to  incorporate   the
availability  of DVDs, and we continue our efforts in fiscal 2005 to secure more
DVD agreements to address this impact. In addition,  our PPT business  continues
to be affected by a shift to "output  programs" under which the Program Supplier
and we agree to a lower order processing and transaction fee in exchange for the
Participating Retailers' commitment to order an increased number of Units of all
the Program Supplier's titles. The result is an increased number of Units leased
by the Participating  Retailers, but a reduced amount of fees per Unit earned by
the Program  Supplier and us. These output programs are an economic  response to
the  changing  dynamics  of the home  video  rental  market,  as a result of the
migration from Cassette format to the DVD format.  We expect the growth of these
output  programs  to  continue,  and  believe  that  they  will  be  financially
beneficial for the Participating Retailers, Program Suppliers and us.

Our  base of  Participating  Retailers  continues  to be  strong.  We  have  one
Participating  Retailer  that  accounted  for 17% of the PPT  revenues in fiscal
2004. The agreement with this  Participating  Retailer is scheduled to expire in
September 2004, with associated PPT revenues from that Participating  Retailer's
rentals  expected to continue  on a  declining  basis  through the end of fiscal
2005.  We are  currently  discussing  with  that  Participating  Retailer  their
interest  in entering  into a new  agreement  with us. We are also  implementing
other  strategies for obtaining  other new  Participating  Retailers and Program
Suppliers in an effort to further stabilize and grow our overall PPT revenue and
earnings streams.

We continue to be in good standing with all of our Program Suppliers and we make
on-going efforts to enhance those business  relationships through improvement of
current  services offered and the development of new service  offerings.  We are
also  continually  seeking to develop  business  relationships  with new Program
Suppliers.

We are also allocating  significant  efforts  towards our business  intelligence
service offerings, both those services that are currently operational as well as
those  that  are in  various  stages  of  development.  Our  suite  of  business
intelligence  software has been well received in the various targeted markets to
date,  as our  offerings  fit well with the  needs  identified  by those  market
participants.  We intend to continue to make the necessary increased investments
in these new business  intelligence  services in the  short-term,  affecting our
current earnings.  We believe they will provide  significant  future revenue and
earnings streams

                                       10


<PAGE>

and ultimately be the cornerstone of our long-term success.

Sources of Revenue

Our sources of revenue  include the  following  PPT revenue  sharing fees in the
Entertainment  business segment: order processing fees generated when Cassettes,
DVDs and video games  ("Units")  are ordered by and  distributed  to  retailers;
transaction fees generated when retailers rent Units to consumers;  sell-through
fees generated when retailers sell Units to consumers;  communication  fees when
retailers'  point-of-sale  systems are connected to our information  system; and
buy out fees  generated  when  retailers  purchase Units at the end of the lease
term.  Entertainment  business  segment  revenues  also include  direct  revenue
sharing  fees from data  tracking  and  reporting  services  provided to program
suppliers  ("DRS"),  revenues  from  Box  Office  Essentials(TM),  Supply  Chain
Essentials(TM),   Business   Intelligence   Essentials(TM),   and   Home   Video
Essentials(TM),  all part of our  Essential(TM)  business  intelligence  service
offerings,  as well as charges for Internet services provided by our subsidiary,
formovies.com, Inc.

In addition,  through July 31, 2003,  revenue included the Fulfillment  business
segment  representing  charges to  customers  of our  subsidiary  3PF.COM,  Inc.
("3PF"),  which provided order processing,  fulfillment and inventory management
services to Internet  retailers and wholesalers and other  businesses  requiring
just-in-time fulfillment. Effective July 1, 2003, we sold 3PF's operating assets
at its Wilmington, Ohio facility to a third party.

Restatements

In May and June 2004, we discovered  that we had  misinterpreted  and misapplied
certain terms of some of our Program Supplier revenue sharing agreements.  These
misinterpretations and misapplications resulted in the miscalculation of Program
Supplier  liabilities  and  related  cost of sales  and,  therefore,  net income
(loss). There were two general types of  misinterpretations  or misapplications:
(i) over  reporting  cost of  sales  and  overstating  assets  and  understating
liabilities due to the  misapplication  of certain terms in our Program Supplier
revenue  sharing  agreements  in the amounts of $0.7  million and $0.8  million,
respectively,  in fiscal 2003 and 2002;  and (ii) under  reporting cost of sales
and related liabilities due to the misuse of contract information in recognizing
our  guarantees to one Program  Supplier in the amounts of $0.9 million and $0.7
million,  respectively, in fiscal 2003 and 2002. However, there was no effect on
the accuracy of amounts we have  periodically  remitted to our Program Suppliers
under  the terms of the  revenue  sharing  agreements  or on our  reported  cash
balances.  Accordingly,  correction  of  these  errors  did  not  result  in any
additional payments to any of these suppliers.

The  misstatement  that resulted in over reporting our cost of sales and related
liabilities was due to a misapplication  of terms in one of our Program Supplier
revenue sharing agreements.  Our accounting methodology for recognizing revenues
and associated  expenses is based on the  establishment  of certain  contractual
terms and algorithms when a revenue sharing agreement is executed with a Program
Supplier.   These   contractual   terms   are   used   in   calculations   on  a
transaction-by-transaction  basis.  In the course of our fiscal year 2004 audit,
we  discovered  that  some of  these  contractual  terms  were  not  established
appropriately  in our  accounting  system  in  accordance  with the terms of the
contract with this Program Supplier. Our accounting system had been inaccurately
programmed with an algorithm that calculated the cost of sales and corresponding
liability.  This  calculation  misapplied a  contractual  term to certain  items
relating to that Program Supplier's product,  which resulted in an overstatement
of the liability to that Program Supplier. We have since modified our accounting
system to establish the appropriate contractual terms for this Program Supplier.
In addition, we have reviewed all key algorithms within our accounting system to
ensure they are aligned with Program Supplier contractual terms.

The  misstatement  that  resulted  in  under  reporting  of  cost of  sales  and
overstating assets and understating liabilities was due to the misinterpretation
of  contractual  information  in a  revenue  sharing  agreement  with one of our
Program  Suppliers.  We believed we could offset prior guarantee  shortages with
future guarantee overages,  based upon the contractual provisions.  In reviewing
the contractual  agreement with members of operating  personnel,  the Accounting
Department realized we had been misinterpreting those contractual provisions and
that we are not  permitted  to offset  prior  guarantee  shortages  with  future
guarantee  overages.  We have since modified our  accounting  processes for this
Program  Supplier to

                                       11

<PAGE>

include the appropriate  guarantee liability  calculation.  Please note that our
Critical Accounting  Policies and Estimates  disclosure as it relates to Program
Supplier  Reserves for contractual  guarantees was accurately stated and was not
affected by this restatement or process change. Also in June 2004, we discovered
that we were not accounting for certain order  processing fees received from our
customers  upon "street  date," which is the date that they are able to rent the
title pursuant to SOP 00-2. Our previous method had been to recognize revenue on
the shipment date. This resulted in a restatement of revenue between periods.

In addition,  in connection with the  embezzlement  of funds by an employee,  as
discussed in more detail  below,  we  underreported  our sales tax  liability in
fiscal 2003. We record our sales tax liabilities as an offset to revenue.

See Item 9A "Controls  and  Procedures"  for a discussion of changes made to our
internal  controls and to our  processes and  procedures to help ensure  against
such restatements in the future.

The restatements did not affect cash flows from operations, investing activities
or  financing  activities  in any  fiscal  year.  We also  reclassified  certain
operating  expense  amounts to conform to the current fiscal year  presentation.
For details on the restatement of our first, second and third quarters of fiscal
2004, see "Quarterly Financial Data" in Item 8.


We have  restated our fiscal years ended March 31, 2003 and 2002 and the related
balance sheet accounts at March 31, 2003 as follows:

                         Year Ended March 31, 2003
------------------------------------------------------------------------------
                                                            Income
                                                  Income    (loss)
                                Cost     Total      tax      from
(In thousands)                  of     operating  expense  continuing    Net
                    Revenue    sales   expenses  (benefit) operations   loss
                    --------  --------  --------  ------   -------      ------
As previously       $ 86,220  $ 71,315  $ 86,231  $   85   $    84      $ (498)
 reported
Adjustment for
 misinterpretation
 and misapplication       --       239       239     (91)     (148)       (148)
 of contract terms
SOP 00-2 revenue
 recognition            (274)     (206)     (206)    (25)      (43)        (43)
 adjustment
Underreporting
 of sales tax            (62)       --        --     (24)      (38)        (38)
Rounding                  --        (1)       --      (1)        1          --
                    --------  --------  --------  ------   -------      ------
 As restated        $ 85,884  $ 71,347  $ 86,264  $  (56)  $  (144)     $ (727)
                    ========  ========  ========  ======   =======      ======

After the above adjustments, our basic and diluted net loss per share for fiscal
2003 increased to $(0.08) per share  compared to the  previously  reported basic
and diluted net loss per share of $(0.05) as previously reported.

                             March 31, 2003
-------------------------------------------------------------------------
                                  Advances   Current
                                    to       deferred   Total
(In thousands)         Accounts    Program      tax      current    Total
                      receivable Suppliers   assets     assets     assets
--------------------  ---------- ---------   -------   --------   --------
As previously           $ 9,706   $    418   $ 2,797   $ 25,496   $ 30,726
 reported
Adjustment for
misinterpretation
and misapplication
of contract terms
  Current period             --       (586)       91       (495)      (495)
  Prior periods              --      1,999      (514)     1,485      1,485
SOP 00-2 revenue
 recognition
 adjustment
   Current period          (274)        --        25       (249)      (249)
   Prior periods             (3)        --        --         (3)        (3)
Underreporting of
 sales tax, current          --         --        24         24         24
 period                 -------   --------   -------   --------   --------
As restated             $ 9,429   $  1,831   $ 2,423   $ 26,258   $ 31,488
                        =======   ========   =======   ========   ========

                                       12

<PAGE>


                                                                        Total
                                                              Total  liabilities
                                         Total       Accumu-  stock-  and stock-
                    Accounts  Accrued    current     lated    holders   holders'
(In thousands)      payable  liabilities liabilities deficit  equity    equity
-----------------   --------  --------   --------  ---------  -------- --------
As previously      $ 12,711   $ 1,144    $ 14,621  $ (24,409) $ 15,437 $ 30,726
 reported
Adjustment for
 misinterpretation
 and misapplication
 of contract terms:
   Current period      (347)       --        (347)      (148)     (148)    (495)
   Prior periods        645        --         645        840       840    1,485
SOP 00-2 revenue
 recognition
 adjustment:
   Current period      (206)       --        (206)       (43)      (43)    (249)
   Prior periods         (2)       --          (2)        (1)       (1)      (3)
Underreporting of
 of sales tax,
 current period          --        62          62        (38)      (38)      24
                   --------   -------    --------  ---------  -------- --------
As restated        $ 12,801   $ 1,206    $ 14,773  $ (23,799) $ 16,047 $ 31,488
                   ========   =======    ========  =========  ======== ========


                            Year Ended March 31, 2002
--------------------------------------------------------------------------------
                                                              Income
                                Cost     Total     Income      from
                                 of     operating   tax      continuing   Net
(In thousands)      Revenue     sales   expenses   expense   operations  income
                    --------  -------- ---------  -------   ----------  --------
As previously       $ 95,994  $ 71,994  $ 88,122  $ 5,998   $  9,787    $  8,994
 reported
Adjustment for
 misinterpretation
 and misaaplication
 of contract terms        --      (102)     (102)      39         63          63
SOP 00-2
 revenue
 recognition              27        21        21        2          4           4
 adjustment
Rounding                  --        --        (1)       1         --           1
                    --------  --------  --------  -------   --------    --------
As restated         $ 96,021  $ 71,913  $ 88,040  $ 6,040   $   9,85    $  9,062
                    ========  ========  ========  =======   ========    ========

After the above  adjustments,  our basic net income  per share for  fiscal  2002
increased to $0.87 per share compared to the $0.86 per share previously reported
and our diluted net income per share remained unchanged at $0.85 per share.

Please refer to footnote (1) of the Selected Financial Data in Item 6 for more
detailed information regarding the impact of the matters noted above to the
restatement of our financial statements for fiscal years 2001 and 2000.

Sale of 3PF.COM

In June 2003, we signed a definitive  agreement to sell substantially all of the
assets of 3PF at the  Wilmington,  Ohio  operation for  $800,000.  The agreement
covered all equipment and leasehold  improvements  at 3PF's leased  distribution
facility in Wilmington,  Ohio, as well as a portion of its working  capital.  As
part of the agreement,  3PF, as lessee, and Rentrak, as guarantor, were released
from the lease.  The cash purchase price of $800,000 is  approximately  equal to
the net book value of the assets sold. We completed this asset sale  transaction
effective  July 1, 2003,  and  received  the cash  purchase  price in full.  The
operations  of  3PF  have  not  been  reported  as  discontinued  operations  in
accordance  with FASB  Statement  No. 144,  "Accounting  for the  Impairment  or
Disposal of Long-Lived  Assets,"  because cash flows related to our  fulfillment
activities have not been completely eliminated.

During the sale  negotiations,  we  received  notification  from  3PF's  largest
customer,   serviced  exclusively  from  the  leased  distribution  facility  in
Columbus, Ohio, that it did not intend to renew its fulfillment service contract
upon the scheduled expiration at July 31, 2003. The Columbus,  Ohio distribution
facility was used exclusively to service this customer. Due to the timing of the
notification,  we were not  able to  include  the  Columbus,  Ohio  distribution
facility lease in the asset sale  transaction.  We completed the  termination of
the lease obligation for the Columbus,  Ohio  distribution  facility,  effective
December 1, 2003,  for a cost of  $650,000,  which is included as a component of
cost of sales in our statement of operations.  This lease  termination  included
the assignment of the sublease 3PF had in place with its former largest customer
for approximately 194,000 square feet of this facility.

                                       13

<PAGE>


Investigation and Recovery Efforts Regarding Misappropriated Funds

In March  2004,  we learned  that an  employee  may have  engaged in  fraudulent
activity and we hired an outside firm to  investigate  the matter.  The employee
admitted to embezzling  funds from us. It was  determined  that the employee had
been  embezzling  funds from us since 1998 through 2003,  in an amount  totaling
approximately $570,000. The investigation of this matter is complete. Other than
$62,000 in underreported  sales taxes as discussed above, the embezzlement funds
were materially  expensed in the year such funds were embezzled and,  therefore,
had no other effect on the  restatement of any financial  results in fiscal 2004
or prior years.  We are in the process of securing  certain assets  belonging to
this employee,  which, in conjunction with insurance proceeds, should provide us
with recoveries of approximately $300,000,  which will be recorded as recoveries
in  future  periods  when  they  are  received.  We have  incurred  a  total  of
approximately  $120,000 to $150,000 of legal and other professional fees related
to this matter  through June 2004,  and expect to incur an additional  amount of
approximately  $5,000 to $10,000 before the matter is resolved.  We have updated
our system of internal controls, as described more fully in Item 9A, in order to
prevent such occurrences in the future.

Results of Operations
                                        Year Ended March 31, (1)
                        ------------------------------------------------------
                               2004         2003 (restated)     2002 (restated)
                                                  (2)                 (2)
                        --------------    ----------------     ---------------
                                  % of               % of               % of
(Dollars in thousands)   Dollars revenues Dollars   revenues   Dollars  revenues
                        -------  -----    -------    -----     -------   -----
Revenues:
  Order processing fees $ 7,741    9.9%   $14,745     17.2%    $16,893    17.6%
  Transaction fees       46,398   59.4     42,258     49.2      44,102    45.9
  Sell-through fees      10,309   13.2      8,558     10.0       7,324     7.6
  Communication fees      1,127    1.4      1,185      1.4       1,136     1.2
  Fulfillment             4,624    5.9     15,266     17.8      15,342    16.0
  Other                   7,933   10.2      3,872      4.5      11,224    11.7
                        -------  -----    -------    -----     -------   -----
                         78,132  100.0     85,884    100.0      96,021   100.0
Operating expenses:
  Cost of sales          60,090   76.9     71,347     83.1      71,913    74.9
  Selling and
  administrative         16,357   20.9     14,434     16.8      17,266    18.0
  Net gain on
  litigation settlement      --     --       (362)    (0.4)     (1,563)   (1.6)
  Asset impairment           --     --        844      1.0         424     0.4
                        -------  -----    -------    -----     -------   -----
                         76,447   97.8     86,263    100.4      88,040    91.7
                        -------  -----    -------    -----     -------   -----
Income (loss)from         1,685    2.2       (379)    (0.4)      7,981     8.3
 operations
Other income (expense):
  Interest income           244    0.3        204      0.2         195     0.2
  Interest expense          (11)    --        (25)      --         (18)     --
  Loss on investments        --     --         --       --        (231)   (0.2)
  Gain on Rentrak
  Japan transaction          --     --         --       --       7,967     8.3
                        -------  -----    -------    -----     -------   -----
                            233    0.3        179      0.2       7,913     8.2
                        -------  -----    -------    -----     -------   -----
Income (loss) from
 continuing operations
 before income tax
 provision (benefit)      1,918    2.5       (200)    (0.2)     15,894    16.6
 and loss from
 discontinued
 operations
Income tax provision        479    0.6        (56)      --       6,040     6.3
 (benefit)
                        -------  -----    -------    -----     -------   -----
Income (loss) from
 continuing operations
 before loss from         1,439    1.8       (144)    (0.2)      9,854    10.3
 discontinued
 operations
Loss from discontinued
 operations, net of tax    (129)  (0.2)      (583)    (0.7)       (792)   (0.8)
                        -------  -----    -------    -----     -------   -----
Net income (loss)       $ 1,310    1.7%   $  (727)    (0.9)%   $ 9,062     9.4%
                        =======  =====    =======    =====     =======   =====

(1) Percentages may not add due to rounding.
(2) Fiscal 2003 and 2002 have been  restated for certain  errors.  See Note 4 of
    Notes to Consolidated  Financial Statements.  In addition,  certain expenses
    were reclassified from selling and administrative to cost of sales in fiscal
    2003 and 2002.

                                       14

<PAGE>


Revenue
Revenue  decreased  $7.8  million,  or 9.1%,  to $78.1  million  in fiscal  2004
compared to $85.9 million in fiscal 2003, and decreased $10.1 million, or 10.5%,
in fiscal 2003 compared to $96.0 million in fiscal 2002. The decrease in revenue
in fiscal  2004  compared  to fiscal  2003 is  primarily  due to a  decrease  in
fulfillment  (3PF)  revenue and order  processing  fees.  These  decreases  were
partially  offset by an increase in revenues from  transaction fees and from DRS
and our Essential(TM) business service offerings, which are a component of other
revenue. The decrease in fiscal 2003 compared to fiscal 2002 is primarily due to
the fact that,  in fiscal 2002,  we earned  royalties  and other  revenues  from
Rentrak Japan totaling $6.4 million,  which are included as a component of other
revenue. Our arrangement with Rentrak Japan ended in fiscal 2002.

Order  processing  fees decreased $7.0 million in fiscal 2004 compared to fiscal
2003 due to PPT "output  programs" and other PPT programs  under which we agreed
with the program supplier to charge a lower order processing and transaction fee
in exchange for the  Participating  Retailers'  commitment to order an increased
total number of Units of all the Program Suppliers' titles. These programs began
in August 1998 and were a response to the shift from the VHS cassette  format to
the DVD format. These output programs, along with a new combined VHS/DVD revenue
sharing  program with a new major  supplier,  contributed  to an 89% increase in
total Units shipped during fiscal 2004 compared to fiscal 2003.

The decrease in order  processing fees was offset in part by a $4.1 million,  or
9.8%,  increase in transaction  fees and a $1.8 million,  or 20.5%,  increase in
sell-through  fees.  The increase in  transaction  fees is primarily  due to the
increased number of Units ordered by our Participating Retailers from our output
programs that were rented to their customers.  The increase in sell-through fees
is primarily  due to the new combined  VHS/DVD  revenue  sharing  program  noted
above. We expect our sell-through revenue increases to continue as the result of
changed terms and conditions in our new product programs.

Fulfillment  revenues decreased $10.6 million,  or 69.7%, to $4.6 million during
fiscal 2004  compared to $15.3 million  during  fiscal 2003,  due to ceasing 3PF
operations as of July 31, 2003 as discussed above.

Increases in other  revenue in fiscal 2004  compared to fiscal 2003  included an
increase of approximately $1.3 million in DRS revenues to $4.3 million in fiscal
2004 and an increase of $2.9 million in revenues from our Essential(TM) business
intelligence  services offerings to $3.2 million in fiscal 2004. In fiscal 2003,
there  were  minimal  revenues   generated  from  our   Essential(TM)   business
intelligence  services as they began in the fourth  quarter of fiscal 2003.  The
$7.4 million decrease in fiscal 2003 compared to fiscal 2002,  primarily relates
to $6.4 million of royalties received related to Rentrak Japan in fiscal 2002 in
connection  with its sale,  compared to none in fiscal 2003,  and a $0.8 million
decrease in DRS revenues.

Order  processing-fee  revenue  decreased to $14.7  million,  a decrease of $2.1
million,  or  12.4%,  in fiscal  2003  from  $16.9  million  in fiscal  2002 and
transaction-fee  revenue decreased to $42.3 million, a decrease of $1.8 million,
or 4.2%,  from  $44.1  million in the same  periods.  These  decreases  resulted
primarily  from the  output  and  other  PPT  programs  discussed  above.  These
decreases were partially  offset by an increase in sell-through  revenue to $8.6
million in fiscal 2003  compared to $7.3 million in fiscal 2002,  an increase of
$1.2 million, or 16.8%.

Cost of Sales
Cost  of  sales  consists  of  order  processing   costs,   transaction   costs,
sell-through  costs and handling and freight  costs,  and  represents the direct
costs to produce revenues.  Order processing  costs,  transaction costs and sell
through  costs  represent  the amounts due 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.

Cost of sales decreased $11.3 million, or 15.8%, to $60.1 million in fiscal 2004
compared to $71.3 million in fiscal 2003 and decreased $0.6 million, or 0.8%, in
fiscal  2003  compared  to $71.9  million  in  fiscal  2002.  Cost of sales as a
percentage  of revenue was 76.9% in fiscal 2004 compared to 83.1% in fiscal 2003
and 74.9% in fiscal 2002.

                                       15

<PAGE>


A majority of the  decrease  in cost of sales in fiscal 2004  compared to fiscal
2003  was  due  to  ceasing  operations  of  3PF  in  July  2003.  In  addition,
approximately  $0.9 million of the total cost of sales decrease is  attributable
to the overall $1.2 million  decrease in PPT  revenues.  Cost of sales in fiscal
2004 includes a $650,000 charge related to costs of terminating  3PF's Columbus,
Ohio, facility lease.

The decrease in cost of sales as a percentage of revenue in fiscal 2004 compared
to  fiscal  2003 is due to  approximately  $3.2  million  in  revenues  from our
Essential(TM)  business  service  offerings in fiscal 2004, with $0.8 million of
related  cost of sales,  compared to $0.3 million of revenue and $0.3 million of
costs from these  offerings in fiscal 2003. In addition,  the decrease is due to
the receipt of $0.8  million of  discretionary  rebates  from one of our Program
Suppliers  during fiscal 2004,  related to guarantee  shortages  resulting  from
under-performance  of certain  titles.  We received $0.2 million of such rebates
during fiscal 2003. These decreases were partially offset by the $650,000 charge
related to 3PF discussed above.

The  decrease  in cost of  sales in  fiscal  2003  compared  to  fiscal  2002 is
primarily  due to the  decrease in revenue as discussed  above.  The increase in
cost of sales as a percentage  of revenue in fiscal 2003 compared to fiscal 2002
is primarily  due to the lack of royalty fees related to Rentrak Japan in fiscal
2003,  compared to $6.4 million of such royalties in fiscal 2002, and a $295,000
increase in warrant amortization. We expensed the remaining unamortized value of
warrants previously issued to a customer in conjunction with a service agreement
as of March 31, 2003 based on the  expectation  that the  customer  would not be
utilizing our services in future periods.

Selling and Administrative
Selling and  administrative  expenses  consist  primarily  of  compensation  and
benefits,  development,  marketing and advertising costs, legal and professional
fees,  communications  costs,  depreciation  and  amortization of tangible fixed
assets and software, real and personal property leases, as well as other general
corporate expenses.

Selling and administrative  expenses increased $1.9 million,  or 13.3%, to $16.4
million in fiscal 2004 compared to $14.4  million in fiscal 2003,  and decreased
$2.8 million, or 16.4%, in fiscal 2003 compared to $17.3 million in fiscal 2002.

The increase in selling and  administrative  expenses in fiscal 2004 compared to
fiscal  2003 is  primarily  due to an  increase of  approximately  $1.4  million
related to the continued  investment toward the development and operating growth
in our Essential(TM) business service offerings noted above. In addition, we had
a $1.0  million  decrease  in  advertising  credits  received  from our  Program
Suppliers  in  fiscal  2004  compared  to fiscal  2003 and our bad debt  expense
increased  $0.7  million  in the same  period due to fewer  charge-backs  to our
Program Suppliers under our current  contractual  arrangements.  These increases
were partially offset by an approximately $1.5 million decrease  attributable to
ceasing 3PF's operations July 31, 2003.

The decrease in fiscal 2003 compared to fiscal 2002 was  primarily  attributable
to a  $1.7  million  decrease  in  compensation,  advertising,  and  travel  and
entertainment  expenses  related to our 3PF business,  as we continued to adjust
our overhead  infrastructure to better match the related revenues.  In addition,
in fiscal  2003  compared  to fiscal  2002,  we had a $0.5  million  increase in
advertising  credits,  a $0.2 million  increase in bad debt  charge-backs to our
Program Suppliers and a $0.4 million decrease in other miscellaneous costs.

Net Gain on Litigation Settlement
The net gain on  litigation  settlement of $362,000 in fiscal 2003 relates to an
amount that  Hollywood  Entertainment,  a former  customer,  agreed to pay us in
order to resolve all outstanding  issues. The net gain on litigation  settlement
of  $1.6  million  in  fiscal  2002  relates  to  a  settlement  with  Hollywood
Entertainment for breach of a fulfillment contract.

Asset Impairment
In 2003, we determined  that it was unlikely that 3PF would achieve its business
plans and we  initiated  a plan to sell the  assets  of 3PF.  Prior to March 31,
2003, it was determined that, more likely than not,  substantially  all of 3PF's
assets  would  be  sold  or   otherwise   disposed  of.  As  a  result  of  this
determination,  during the quarter ended March 31, 2003, we assessed the current
and historical

                                       16

<PAGE>

operating  and cash flow  losses,  prospects  for growth in  revenues  and other
alternatives for improving the operating results of 3PF.

We then  performed an  assessment  of the fair value of the 3PF assets under the
guidelines of SFAS 144,  "Accounting  for the Impairment of Long-Lived  Assets."
This assessment  resulted in 3PF recognizing an asset  impairment  charge during
the  three-month  period  ended March 31, 2003 in the amount of $844,041 for the
write  down of its  assets  to  estimated  fair  market  value of  approximately
$800,000.

Other Income (Expense)
Interest income of $244,000 and $204,000 in fiscal 2004 and 2003,  respectively,
includes $156,000 and $57,000 of interest earned on the note receivable due from
one of 3PF's  clients,  which was  issued in June  2002.  See Note 5 of Notes to
Consolidated Financial Statements.

The $231,000 loss on investments in fiscal 2002 includes a $250,000 loss related
to the  write-off of an  unrealizable  investment  made by our 3PF business in a
former customer.

The $8.0  million  gain on Rentrak  Japan  transactions  includes  $1.0  million
related to the sale of 3PF stock to Rentrak Japan,  $6.4 million  related to the
sale of our entire  interest  in Rentrak  Japan  stock and  $567,000  related to
forgiveness of liabilities.

Income Taxes
Our effective  tax rate was 25.0%,  (27.8)% and 38.0%,  respectively,  in fiscal
2004,  2003 and  2002.  The tax rate in  fiscal  2004  was  positively  affected
primarily  by the  benefit of tax  intangible  amortization.  In  addition,  our
effective  tax rate  differs  from the federal  statutory  tax rate due to state
income taxes.

Discontinued Operations
Discontinued operations include the operations of BlowOut Video, which consisted
of retail store  operations for the sale of used Units.  Due to the  significant
increase in  sell-through  activity  throughout the industry,  the operations of
BlowOut  Video did not meet our  expectations,  and, as a result,  during fiscal
2003,  we  initiated  and  completed  a plan to  discontinue  the  retail  store
operations of BlowOut Video.  The plan called for an exit from the stores by the
end of fiscal 2003,  either through  cancellation  of the lease  commitments and
liquidation  of assets,  or through sale of the stores to a third  party.  As of
March 31, 2003, all operations had ceased.  In January 2004, we were notified by
the  purchaser  of a portion of BlowOut  Video's  operations  of their intent to
default on a note receivable due to us. As such, we provided an approximate $0.2
million  reserve  for the  remaining  balance  of this  note  receivable  in the
three-month  period ended December 31, 2003. This reserve resulted in a reported
loss, net of tax benefit,  from these  discontinued  operations of $128,649,  or
$0.01 per share in fiscal  2004.  We are  continuing  to sell our  contractually
available  end-of-term  PPT  revenue-sharing  product  through broker  channels.
Current and prior year  amounts  have been  restated to classify  the results of
BlowOut Video operations, net of related tax effects, as discontinued.

The results of operations related to BlowOut Video were as follows:

                             Year Ended March 31,
                      -------------------------------------
                           2004       2003         2002
                      -----------  -----------  ----------
Revenue               $        --  $ 2,575,733  $ 6,620,165
Net loss              $  (128,649) $  (582,627) $  (792,757)
Net loss per share    $     (0.01) $     (0.06) $     (0.07)

The  decrease  in  revenue  in fiscal  2003  compared  to fiscal  2002 is due to
operating  only three  stores  during  fiscal 2003  compared to seven  stores in
fiscal 2002.

Inflation
We believe  that the impact of  inflation  was minimal on our business in fiscal
2004, 2003 and 2002.

                                       17

<PAGE>


Liquidity and Capital Resources

Our  sources  of  liquidity  include  our  cash  balance,  cash  generated  from
operations and our $2.0 million line of credit.  Based on our current budget and
projected cash needs, we believe that our available sources of liquidity will be
sufficient  to fund our current  operations,  the continued  development  of our
business intelligence services and other cash requirements to at least March 31,
2005.

Cash and cash  equivalents  decreased  $1.3 million to $8.7 million at March 31,
2004,  compared  to $10.1  million at March 31,  2003.  This  decrease  resulted
primarily  from $2.1  million used in  operations  and $1.6 million used for the
purchase of property and equipment, partially offset by $0.8 million of proceeds
from the sale of 3PF,  $0.5  million of payments  received on a note  receivable
from 3PF's former largest customer,  and $1.0 million of proceeds related to the
issuance of stock pursuant to our stock plans. Our current ratio was 1.85:1.0 at
March 31, 2004 compared to 1.77:1.0 at March 31, 2003.

Accounts  receivable  increased  $5.6 million to $15.0 million at March 31, 2004
compared to $9.4 million at March 31, 2003.  This  increase is primarily  due to
changes in the terms of various  combined  VHS/DVD  revenue-sharing  agreements,
together with an increase in the number of Units rented.

Advances to Program  Suppliers  increased  $2.4 million to $4.2 million at March
31, 2004 compared to $1.8 million at March 31, 2003  primarily due to the timing
of release dates for certain titles and the addition of a new Program  Supplier.
These amounts  represent the unearned portion of guarantees with certain Program
Suppliers.

Deferred tax assets,  short and  long-term,  were $3.4 million at March 31, 2004
compared to $3.1  million at March 31,  2003.  The  deferred  tax asset  balance
primarily  relates to net operating loss  carryforwards and various reserves not
currently deductible for tax purposes.

Other current  assets  decreased  $0.9 million to $1.5 million at March 31, 2004
compared  to $2.4  million  at March 31,  2003  primarily  due to a  decline  in
pre-paid  expenses and  decreased  deferred  costs due to a lower  average order
processing fee per Unit.

During fiscal 2004, we spent $1.6 million on property and  equipment,  including
$1.0 million for the  capitalization  of internally  developed  software for our
business intelligence service offerings. These additions were offset by the sale
of  approximately  $800,000  book value of assets  related to 3PF. We anticipate
spending  approximately  $2.0 million on property and  equipment in fiscal 2005,
including $0.7 million for the  capitalization of internally  developed software
for our business intelligence service offerings.

Other long-term  assets decreased $1.1 million to $0.8 million at March 31, 2004
compared to $1.9 million at March 31, 2003 primarily due to a $400,000 write-off
of  a  security  deposit  related  to  3PF's  Columbus  facility,  $0.5  million
associated with principal  payments  received on a note receivable from a former
customer of 3PF and the  establishment  of a $200,000  reserve for the remaining
balance of a note receivable related to the Blowout Video store sale.

Accounts  payable  increased  $2.6  million to $15.4  million at March 31,  2004
compared  to $12.8  million  at March 31,  2003  primarily  due to the timing of
Program Supplier and other vendor payments.

Accrued  liabilities  decreased  $317,000  to $0.9  million  at March  31,  2004
compared to $1.2 million at March 31, 2003 primarily due to a $92,000  reduction
in directors' and officers'  insurance  premiums and a $225,000  credit at March
31, 2003 due a participating retailer that was fully earned in fiscal 2004.

We currently  have a secured  revolving  line of credit for $2.0 million,  which
expires  September 1, 2004. We expect to renew this line prior to its expiration
under similar  terms.  Interest on the line of credit is at our choice of either
the bank's prime  interest  rate minus 0.5 percent or LIBOR plus 2 percent.  The
credit  line is secured by  substantially  all of our  assets.  The terms of the
credit  agreement  include  certain  financial   covenants   requiring:   (1)  a
consolidated  net loss for the fiscal  quarter ended  September 30, 2003, not to
exceed $2.0 million;  (2) a  consolidated  net profit to be achieved each fiscal
quarter

                                       18


<PAGE>

beginning  with the quarter ended  December 31, 2003 of a minimum of $1.00,  and
consolidated  net profit not less than $1.00 on an annual  basis,  determined at
fiscal year end; and (3) achievement of specified current and leverage financial
ratios.  Based upon the financial results reported as of and for the fiscal year
ended  March  31,  2004,  we  determined  that we were in  compliance  with  the
financial  covenants  as of  March  31,  2004.  At  March  31,  2004,  we had no
outstanding borrowings under this agreement.

Contractual Payment Obligations

A summary of our contractual commitments and obligations as of March 31, 2004 is
as follows:

                                      Payments Due By Fiscal Period
                       ---------------------------------------------------------
                                                2006 and    2008 and   2010 and
Contractual Obligation     Total       2005        2007       2009      beyond
---------------------- -----------  ----------  ----------  ---------  ---------
Capital leases         $    91,740  $   50,040  $   41,700  $      --  $      --
Operating leases         2,099,217     806,417   1,292,800         --         --
Program Supplier
 guarantees              4,621,203   4,621,203          --         --         --
Executive compensation   3,560,349   1,811,750   1,748,599         --         --
                       -----------  ----------  ----------  ---------  ---------
                       $10,372,509  $7,289,410  $3,083,099  $      --  $      --
                       ===========  ==========  ==========  =========  =========

Critical Accounting Policies and Estimates

The  preparation of our financial  statements  requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities,  revenues and
expenses.  Our estimates are based on historical experience and on various other
assumptions  that are believed to be  reasonable  under the  circumstances,  the
results of which form the basis for making  judgments  about the carrying values
of assets and  liabilities  that are not readily  apparent  from other  sources.
Following is a discussion of our critical  accounting  estimates.  See Note 2 of
Notes to Consolidated Financial Statements, Significant Accounting Policies, for
additional information.

Allowance for Doubtful Accounts
Credit  limits are  established  through a process of  reviewing  the  financial
history and stability of each customer. We regularly evaluate the collectibility
of accounts receivable by monitoring past due balances. If it is determined that
a customer may be unable to meet its financial  obligations,  a specific reserve
is established based on the amount we expect to recover.  An additional  general
reserve is provided  based on aging of accounts  receivable  and our  historical
collection  experience.  If circumstances  change related to specific customers,
overall aging of accounts receivable or collection  experience,  our estimate of
the recoverability of accounts receivable could materially change. Our allowance
for doubtful accounts totaled $839,122 and $748,139,  respectively, at March 31,
2004 and 2003.

Program Supplier Reserves
We  have  entered  into  guarantee  contracts  with  certain  program  suppliers
providing  titles  for  distribution  under  our  PPT  system.  These  contracts
guarantee the Program  Suppliers  minimum  payments that are recoupable based on
revenue-sharing  activity.  In some cases, these guarantees are paid in advance.
For amounts not paid in advance,  we record a liability  for the gross amount of
the guarantee due to the Program  Supplier on the street date in accordance with
SOP 00-2.  The  unearned  portion of the  guarantees  is included as Advances to
Program  Suppliers  on  our  consolidated   balance  sheets.   Using  historical
experience and year to date rental  experience  for each title,  we estimate the
projected  revenue to be generated  under each guarantee.  We have  historically
been  able to  reasonably  estimate  shortages  after  30 to 60  days of  rental
activity.  We then  establish  a Program  Supplier  reserve  for titles that are
projected to experience a shortage under the  provisions of the  guarantee.  The
program supplier reserve is netted against Advances to Program  Suppliers on our
consolidated  balance  sheets.  We  continually  review  these  factors and make
adjustments  to the reserves as needed.  Actual  results could differ from these
estimates  and could have a material  effect on the  recorded  Program  Supplier
reserves.  The balance in this reserve  totaled  $4.5 million and $3.7  million,
respectively, at March 31, 2004 and 2003.

                                       19

<PAGE>

Deferred Taxes
We account for income taxes in  accordance  with SFAS No. 109,  "Accounting  for
Income Taxes." In accordance  with SFAS No. 109,  deferred tax assets arise from
the tax benefit of amounts expensed for financial reporting purposes but not yet
deducted  for tax  purposes  and  from  unutilized  tax  credits  and NOL  carry
forwards. We evaluate our deferred tax assets on a regular basis to determine if
a  valuation  allowance  is  required.  To  the  extent  it  is  determined  the
recoverability  of the  deferred  tax  assets  is  unlikely,  we will  record  a
valuation  allowance against deferred tax assets. As of March 31, 2004 and 2003,
we had a valuation  allowance  of $0.3 million and $0.4  million,  respectively,
recorded against our Canadian net operating loss carryforwards. Net deferred tax
assets totaled $3.4 million and $3.3 million, respectively, as of March 31, 2004
and 2003.

New Accounting Pronouncements

See Note 3 of Notes to Consolidated Financial Statements for a discussion of the
impact of new accounting pronouncements.

Off-Balance Sheet Arrangements

Other than disclosed above under Contractual Payment Obligations, we do not have
any off-balance sheet  arrangements that have or are reasonably likely to have a
material  current  or  future  effect on our  financial  condition,  changes  in
financial  condition,  revenues or expenses,  results of operations,  liquidity,
capital expenditures or capital resources.

                                       20

<PAGE>


ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

             Report of Independent Registered Public Accounting Firm


The Board of Directors
Rentrak Corporation:

We  have  audited  the  accompanying  consolidated  balance  sheets  of  Rentrak
Corporation  and  subsidiaries  as of March 31,  2004 and 2003,  and the related
consolidated statements of operations,  stockholders' equity, and cash flows for
each of the years in the  three-year  period ended March 31, 2004. In connection
with our audits of the consolidated  financial statements,  we also have audited
the  supplementary  information  included in  Schedule  II.  These  consolidated
financial  statements and the consolidated  financial statement schedule are the
responsibility of the Company's management.  Our responsibility is to express an
opinion  on  these  consolidated   financial  statements  and  the  consolidated
financial statement schedule based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of Rentrak Corporation
and  subsidiaries  as of March  31,  2004 and  2003,  and the  results  of their
operations and their cash flows for each of the years in the  three-year  period
ended March 31,  2004 in  conformity  with U.S.  generally  accepted  accounting
principles.  Also in our opinion, the related  consolidated  financial statement
schedule,  when  considered  in  relation  to the basic  consolidated  financial
statements taken as a whole,  presents  fairly,  in all material  respects,  the
information set forth therein.

As discussed in Note 4 to the accompanying  consolidated  financial  statements,
the Company has restated its  consolidated  balance  sheet as of March 31, 2003,
and the related consolidated statements of operations, stockholders' equity, and
cash flows and the  consolidated  financial  statement  schedule for each of the
years in the two-year period ended March 31, 2003.



KPMG LLP

Portland, Oregon
July 9, 2004





                                       21

<PAGE>


                      Rentrak Corporation and Subsidiaries
                          Consolidated Balance Sheets
<TABLE>
<CAPTION>

                                                                                March 31,
                                                               ------------------------------------------
                                                                      2004                   2003
                                                               -------------------    -------------------
                                                                                          (restated)
Assets
Current Assets:
<S>                                                          <C>                    <C>
    Cash and cash equivalents                                $          8,735,683   $         10,063,541
    Accounts receivable, net of allowances for
       doubtful accounts of $839,122 and $748,139                      15,016,924              9,429,283
    Advances to program suppliers                                       4,188,222              1,831,018
    Income tax receivable                                                  68,384                 81,085
    Deferred income tax assets                                          2,262,186              2,423,038
    Other current assets                                                1,533,895              2,430,334
                                                               -------------------    -------------------
        Total Current Assets                                           31,805,294             26,258,299


Property and equipment, net                                             2,466,668              2,404,763
Deferred income tax assets                                              1,099,660                894,083
Other assets                                                              831,617              1,931,133
                                                                ------------------     ------------------
        Total Assets                                         $         36,203,239   $         31,488,278
                                                               ===================     ==================

Liabilities and Stockholders' Equity
Current Liabilities:
    Accounts payable                                         $         15,446,818   $         12,800,736
    Accrued liabilities                                                   889,377              1,205,893
    Accrued compensation                                                  598,875                610,022
    Deferred revenue                                                      237,575                156,692
                                                               -------------------     ------------------
        Total Current Liabilities                                      17,172,645             14,773,343

Long-Term Obligations:
    Lease obligations, deferred gain and
      customer deposits                                                   234,922                668,039

Commitments and Contingencies

Stockholders' Equity:
    Preferred stock, $0.001 par value; 10,000,000
      shares authorized; none issued                                           --                     --
    Common stock, $0.001 par value; 30,000,000
      shares authorized; shares issued and outstanding:
      9,739,537 and 9,471,612                                               9,740                  9,472
    Capital in excess of par value                                     41,093,976             39,655,212
    Cumulative other comprehensive income                                 180,879                180,879
    Accumulated deficit                                               (22,488,923)           (23,798,667)
                                                               -------------------    -------------------
       Total Stockholders' Equity                                      18,795,672             16,046,896
                                                               -------------------    -------------------
       Total Liabilities and Stockholders' Equity            $         36,203,239   $         31,488,278
                                                               ===================    ===================
</TABLE>

                                       22

<PAGE>

                            Rentrak and Subsidiaries
                     Consolidated Statements of Operations

<TABLE>
<CAPTION>

                                                                          For the Year Ended March 31,
                                                          ------------------------------------------------------------
                                                                2004                 2003                 2002
                                                          -----------------    -----------------    ------------------

                                                                                   (restated)           (restated)

<S>                                                     <C>                  <C>                  <C>
Revenue                                                 $       78,132,413   $       85,884,262   $        96,021,254

Operating expenses:
    Cost of sales                                               60,090,493           71,347,003            71,912,971
    Selling and administrative                                  16,357,299           14,434,343            17,266,350
    Net gain from litigation settlements                                --             (361,847)           (1,563,153)
    Asset impairment                                                    --              844,041               424,177
                                                          -----------------    -----------------    ------------------
                                                                76,447,792           86,263,540            88,040,345
                                                          -----------------    -----------------    ------------------
Income (loss) from operations                                    1,684,621             (379,278)            7,980,909

Other income (expense):
    Interest income                                                244,252              204,283               195,628
    Interest expense                                               (11,584)             (25,009)              (17,598)
    Loss on investments                                                 --                   --              (231,820)
    Gain on Rentrak Japan transaction                                   --                   --             7,967,233
                                                          -----------------    -----------------    ------------------
                                                                   232,668              179,274             7,913,443
                                                          -----------------    -----------------    ------------------
Income (loss) from continuing operations
  before income taxes                                            1,917,289             (200,004)           15,894,352
Provision (benefit) for income taxes                               478,896              (55,528)            6,039,854
                                                          -----------------    -----------------    ------------------
Net income (loss) from continuing operations                     1,438,393             (144,476)            9,854,498
Loss from discontinued operations, net of tax
  benefit of $78,850, $357,094 and $485,884                       (128,649)            (582,627)             (792,757)
                                                          -----------------    -----------------    ------------------
Net income (loss)                                       $        1,309,744   $         (727,103)  $         9,061,741
                                                          =================    =================    ==================

Basic net income (loss) per share from
  continuing operations                                 $             0.15   $            (0.02)  $              0.95
Basic loss per share from discontinued
  operations                                                         (0.01)               (0.06)                (0.08)
                                                          -----------------    -----------------    ------------------
Basic net income (loss) per share                       $             0.14   $            (0.08)  $              0.87
                                                          =================    =================    ==================

Diluted net income (loss) per share from
  continuing operations                                 $             0.14   $            (0.02)  $              0.93
Diluted loss per share from discontinued
  operations                                                         (0.01)               (0.06)                (0.07)
                                                          -----------------    -----------------    ------------------
Diluted net income (loss) per share                     $             0.13   $            (0.08)  $              0.85
                                                          =================    =================    ==================

Shares used in per share calculations:
  Basic                                                          9,600,243            9,641,378            10,415,314
                                                          =================    =================    ==================
  Diluted                                                       10,118,679            9,641,378            10,612,773
                                                          =================    =================    ==================
</TABLE>

                                       23

<PAGE>

                      Rentrak Corporation and Subsidiaries
                 Consolidated Statements of Stockholders' Equity
               For The Years Ended March 31, 2004, 2003 and 2002

<TABLE>
<CAPTION>

                                                                                     Cumulative
                                                                                        Other
                                       Common  Stock        Capital                Comprehensive              Deferred    Total
                                   ---------------------   In Excess      Notes       Income     Accumulated   Warrant Stockholders'
                                     Shares      Amount   of Par Value  Receivable    (Loss)      Deficit      Charge     Equity
                                   -----------  --------  ------------ ------------  --------  ------------  ---------  ------------

Balance previously reported at
<S>   <C> <C>                      <C>          <C>       <C>          <C>           <C>       <C>          <C>        <C>
March 31, 2001                     $12,235,621  $ 12,236  $ 52,471,599 $ (7,728,186) $(49,572) $(32,904,319) $(415,000) $11,386,758
Restatements                                --        --            --           --        --       771,014         --      771,014
                                   -----------  --------  ------------ ------------  --------  ------------  ---------  -----------
Balance at March 31, 2001
(restated)                          12,235,621    12,236    52,471,599   (7,728,186)  (49,572)  (32,133,305)  (415,000)  12,157,772

Comprehensive income (loss):
  Net income                                --        --            --           --        --     9,061,741         --    9,061,741
  Change in net unrealized gain
  (loss) on investment securities,
  net of tax                                --        --            --           --    49,572            --         --       49,572
  Cumulative translation adjustment
                                            --        --            --           --   180,453            --         --      180,453
                                                                                                                         ----------
                                                                                                                          9,291,766
Repurchase of common stock          (1,188,400)   (1,188)   (4,523,061)          --        --            --         --   (4,524,249)
Issuance of common stock under
 employee stock option plans           227,812       227       732,511           --        --            --         --      732,738
Issuance of common stock                87,000        87       136,473           --        --            --         --      136,560
Repurchase of common stock for
  cancellation of notes
  receivable                        (1,495,750)   (1,496)   (7,349,125)          --        --            --         --   (7,350,621)
Cancellation of notes receivable            --        --            --    7,350,621        --            --         --    7,350,621
Income tax benefit from stock
 option exercises                           --        --       261,819           --        --            --         --      261,819
Amortization of warrants                    --        --            --           --        --            --     60,000       60,000
                                   -----------  --------  ------------ ------------  --------  ------------  ---------  -----------
Balance at March 31, 2002
(restated)                           9,866,283     9,866    41,730,216     (377,565)  180,453   (23,071,564)  (355,000)  18,116,406

Comprehensive income (loss):
  Net loss                                  --        --            --           --        --      (727,103)        --     (727,103)
  Cumulative translation adjustment         --        --            --           --       426            --         --          426
                                                                                                                         ----------
                                                                                                                           (726,677)
Common stock issued pursuant to
 stock plans                           112,043       112       475,981           --        --            --         --      476,093
Common stock used to pay for
 option exercises                      (20,914)      (21)     (127,557)          --        --            --         --     (127,578)
Repurchase of common stock            (386,800)     (386)   (1,821,066)          --        --            --         --   (1,821,452)
Repurchase of common stock for
  cancellation of notes receivable     (99,000)      (99)     (377,466)          --        --            --         --     (377,565)
Cancellation of notes receivable            --        --            --      377,565        --            --         --      377,565
Income tax benefit from stock
 option exercises                           --        --        75,104           --        --            --         --       75,104
Retirement of warrants                      --        --      (300,000)          --        --            --         --     (300,000)
Amortization of warrants                    --        --            --           --        --            --    355,000      355,000
                                   -----------  --------  ------------ ------------  --------  ------------  ---------  -----------
Balance at March 31, 2003
(restated)                           9,471,612     9,472    39,655,212           --   180,879   (23,798,667)        --   16,046,896

Net income                                  --        --            --           --        --     1,309,744         --    1,309,744
Common stock issued pursuant to
stock plans                            285,519       286     1,161,399           --        --            --         --    1,161,685
Common stock used to pay for
option exercises                       (17,594)      (18)     (112,960)          --        --            --         --     (112,978)
Income tax benefit from stock
option exercises                            --        --       390,325           --        --            --         --      390,325
                                   -----------  --------  ------------ ------------  --------  ------------  ---------  -----------
Balance at March 31, 2004            9,739,537  $  9,740   $41,093,976 $         --  $180,879  $(22,488,923  $      --  $18,795,672
                                   ===========  ========   =========== ============  ========  ============  =========  ===========
</TABLE>

                                       24

<PAGE>

                      Rentrak Corporation and Subsidiaries
                     Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>

                                                                       For the Year Ended March 31,
                                                            --------------------------------------------------
                                                                2004              2003               2002
                                                            -------------     --------------     -------------
                                                                                (restated)         (restated)
Cash flows from operating activities:
<S>                                                       <C>               <C>                <C>
   Net income (loss)                                      $    1,309,744    $      (727,103)   $    9,061,741
   Adjustments to reconcile net income (loss) to net
     cash flows provided by operating activities:
         Loss on disposal of discontinued operations             128,649            582,627           792,757
         Loss (gain) on disposition of assets                    (94,951)            (3,654)          414,486
         Gain on Rentrak Japan transactions                           --                 --        (7,967,233)
         Tax benefit from stock option exercises                 390,325             75,104           261,819
         Loss of occupancy deposit on lease termination          400,000                 --                --
         Loss on write-down of property and equipment                 --            844,041           424,177
         Depreciation and amortization                           875,488          1,356,022         1,438,449
         Amortization of warrants                                     --            355,000            60,000
         Adjustment to allowance for doubtful accounts          (319,676)        (1,142,138)       (1,546,301)
         Retailer financing program reserves                          --                 --            50,000
         Deferred income taxes                                   (44,725)          (532,727)        4,951,566
         (Increase) decrease in:
            Accounts receivable                               (5,267,965)         2,947,040         1,334,662
            Advances to program suppliers                     (2,357,204)         1,210,641        (1,763,494)
            Income taxes receivable                               12,701            (11,085)          209,160
            Notes receivable and other current assets            760,627          1,528,395          (117,663)
         Increase (decrease) in:
            Accounts payable                                   2,646,082         (6,034,795)        1,723,513
            Accrued liabilities and compensation                (248,813)           (72,110)         (387,563)
            Deferred revenue and other liabilities              (284,213)            12,807        (1,308,341)
                                                            -------------     --------------     -------------
              Net cash provided by (used in)
                operating activities                          (2,093,931)           388,065         7,631,735

Cash flows from investing activities:
   Payments for purchase of property and equipment            (1,597,403)        (1,607,421)       (1,379,111)
   Proceeds from sale of investments                                  --                 --           161,513
   Net proceeds from sale of investment in Rentrak Japan              --                 --         2,509,500
   Proceeds from the sale of 3PF assets                          800,000                 --         1,000,000
   Payments received on note receivable                          451,169                 --                --
   Other assets, net                                             131,621           (128,943)          385,515
                                                            -------------     --------------     -------------
      Net cash provided by (used in) investing activities       (214,613)        (1,736,364)        2,677,417

Cash flows from financing activities:
   Net borrowings (payments) on line of credit                        --                 --        (1,917,705)
   Payments on capital lease obligation                          (68,021)           (62,342)          (57,136)
   Repurchase of common stock and warrants                            --         (2,121,452)         (633,749)
   Issuance of common stock                                    1,048,707            348,515           732,738
   Issuance of common stock to non-employees                          --                 --           136,560
                                                            -------------     --------------     -------------
     Net cash provided by (used in) financing activities         980,686         (1,835,279)       (1,739,292)
                                                            -------------     --------------     -------------

Increase (decrease) in cash and cash equivalents              (1,327,858)        (3,183,578)        8,569,860
Net cash provided by discontinued operations                          --          1,218,435           135,907

Cash and cash equivalents:
   Beginning of year                                          10,063,541         12,028,684         3,322,917
                                                            -------------     --------------     -------------
   End of year                                            $    8,735,683    $    10,063,541    $   12,028,684
                                                            =============     ==============     =============

Supplemental Cash Flow Information:
Cash paid during the period for interest                  $       10,830    $        27,846    $       27,329
Cash paid during the period for income taxes, net of
  refunds received                                                15,561             45,566           125,380

Supplemental Disclosure of Non-Cash Activity:
Change in unrealized gain on investmnet securities,
  net of tax                                              $           --    $            --    $       49,572
Forgiveness of note receivable for issuance
  of common stock                                                     --           (377,565)       (7,350,621)
Forgiveness of debt from Rentrak Japan                                --                 --           567,233

</TABLE>

                                       25

<PAGE>

                      Rentrak Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements


Note 1.  Overview

Rentrak  Corporation  (an  Oregon  corporation)  is  principally  engaged in the
processing of information regarding the rental and sale of video cassettes, DVDs
and video games (Units) and the  distribution  of prerecorded  Units to the home
video   market   throughout   the   United   States   and   Canada   using   its
Pay-Per-Transaction (PPT) revenue sharing program.

Under the PPT  program,  we enter into  contracts  to  lease/license  Units from
producers  of motion  pictures  and  licensees  and  distributors  of home video
cassettes,   DVDs  and  video  games  ("Program  Suppliers"),   which  are  then
leased/licensed  to  retailers  for a percentage  of the rentals  charged by the
retailers.

Fiscal 2003 and 2002 have been restated as described further in Note 4.

During  fiscal  2004,  we sold our  subsidiary,  3PF.COM,  Inc.  ("3PF"),  which
provided  order  processing  and  inventory  management  services to  e-tailers,
wholesalers and other businesses requiring just-in-time fulfillment. See Note 5.

During fiscal 2003, we discontinued  the operations of our  subsidiary,  BlowOut
Video,  Inc., which sold video cassettes and DVDs through its three retail video
stores operating under the name of BlowOut Video. See Note 8.

In fiscal 2002, we sold our entire 5.6% interest in Rentrak Japan,  which was to
develop  distribution  of our PPT system in  certain  Japanese  and other  Asian
markets. See Note 6.

Note 2.  Significant Accounting Policies

Basis of Consolidation
The  consolidated   financial   statements   include  the  accounts  of  Rentrak
Corporation, its majority owned subsidiaries, and those subsidiaries in which we
have a controlling  interest after elimination of all intercompany  accounts and
transactions. Investments in affiliated companies owned 20% to 50% are accounted
for by the equity method.

Management Estimates
The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting  period.  Actual results could differ from those estimates.
We consider our most critical  accounting  policies to be those that require the
use of estimates and assumptions,  specifically,  accounts receivable  reserves,
Program  Supplier  guarantee  reserves and judgments  regarding  realization  of
deferred tax assets.

Revenue Recognition
We follow SOP 00-2,  "Accounting  by  Producers or  Distributors  of Films," and
recognize revenue when all of the following conditions are met:

      o  Persuasive evidence of an arrangement exists;
      o  The products have been delivered;
      o  The  license  period  has begun  (which is  referred  to as the "street
         date" for a product);
      o  The arrangement fee is fixed or determinable;  and
      o  Collection of the arrangement fee is reasonably assured.

                                       26

<PAGE>


PPT  agreements  generally  provide  for an  initial  order  processing  fee and
continuing  transaction  fees based on a percentage of rental revenues earned by
the  retailers  upon  renting  the  Units  to  their  customers.  Initial  order
processing fees cover the direct costs of accessing Units from Program Suppliers
and  handling,  packaging  and shipping of the Units to the  retailer.  Once the
Units are  shipped,  we have no further  obligation  to provide  services to the
retailer.

We recognize  order  processing fees as revenue on the street date and recognize
transaction fees when the Units are rented to the consumers,  provided all other
revenue recognition  criteria have been met. In limited  circumstances,  certain
arrangements  include guaranteed  minimum revenues from our customers.  In these
arrangements,  we recognize the guaranteed  minimum  revenue on the street date,
provided all other revenue recognition criteria are met.

We recognize  other  services  revenue,  including  direct  revenue  sharing and
business intelligence services revenue, ratably over the period of service.

Revenues  derived  from our 3PF  fulfillment  activities  were  recognized  when
products were shipped and/or services were provided.

Cash and Cash Equivalents
We consider all highly  liquid  investments  purchased  with a maturity of three
months or less at acquisition to be cash equivalents. We have funds deposited in
various financial  institutions in excess of the federal funds deposit insurance
limits. We did not have any cash equivalents at March 31, 2004 or 2003.

Accounts Receivable and Allowance for Doubtful Accounts
Trade accounts  receivable  are recorded at the invoiced  amount and do not bear
interest. The allowance for doubtful accounts is our best estimate of the amount
of probable credit losses in our existing accounts receivable.

Credit  limits are  established  through a process of  reviewing  the  financial
history and stability of each customer. We regularly evaluate the collectibility
of accounts receivable by monitoring past due balances. If it is determined that
a customer may be unable to meet its financial  obligations,  a specific reserve
is established based on the amount we expect to recover.  An additional  general
reserve is provided  based on aging of accounts  receivable  and our  historical
collection  experience.  If circumstances  change related to specific customers,
overall aging of accounts receivable or collection  experience,  our estimate of
the  recoverability of accounts  receivable could materially change. We are able
to recover  certain bad debts from our Program  Suppliers.  Such  recoveries are
recorded when they are fixed and  determinable  pursuant to the Program Supplier
contract.

As of March 31, 2004, one customer  represented  34% of our total gross accounts
receivable.  No  other  customer  accounted  for  10% or  more  of our  accounts
receivable  balance  as  of  March  31,  2004  or  2003.  We  do  not  have  any
off-balance-sheet credit exposure related to our customers.

Fair Value of Financial Assets and Liabilities
We estimate the fair value of our  monetary  assets and  liabilities  based upon
comparison  of such  assets and  liabilities  to the current  market  values for
instruments  of a similar  nature and degree of risk.  Our  monetary  assets and
liabilities  include cash, accounts receivable and accounts payable. We estimate
that the recorded value of all our monetary assets and liabilities  approximates
fair value as of March 31, 2004 and 2003.

Impairment of Long-Lived Assets
Pursuant  to  Statement  of  Financial  Accounting  Standards  (SFAS)  No.  144,
"Accounting  for the  Impairment or Disposal of Long-Lived  Assets,"  long-lived
assets, such as property, plant and equipment, and purchased intangibles subject
to amortization,  are required to be reviewed for impairment  whenever events or
changes in  circumstances  indicate that the carrying amount of an asset may not
be  recoverable.  Recoverability  of assets to be held and used is measured by a
comparison of the carrying amount of an asset to estimated  undiscounted  future
cash flows expected to be generated by the asset.  If

                                       27

<PAGE>

the carrying  amount of an asset  exceeds its  estimated  future cash flows,  an
impairment  charge is recognized  by the amount by which the carrying  amount of
the asset  exceeds  the fair value of the asset.  Assets to be  disposed  of are
reported at the lower of the  carrying  amount or fair value less costs to sell,
and depreciation  ceases.  As discussed in Note 5, in fiscal 2003, we recognized
an impairment charge related to our 3PF assets totaling $844,000.

Property and Equipment
Depreciation of property and equipment is computed on the  straight-line  method
over estimated  useful lives of three to seven years for furniture and fixtures,
three to ten years for machinery  and equipment and three years for  capitalized
software.  Leasehold improvements are amortized over the lives of the underlying
leases or the service lives of the improvements,  whichever is shorter. Property
and  equipment is reviewed for  impairment  in  accordance  with SFAS No. 144 as
discussed above.

Capitalized Software
Capitalized software, included in Property and Equipment, net, consists of costs
to purchase  and develop  internal-use  software.  This also  includes  costs to
develop software for customer use in various services, including theatrical data
recovery and fulfillment.  Amortization of capitalized software is computed on a
straight-line basis over 3 to 5 years, depending on the estimated useful life of
the software. Capitalized software is reviewed for impairment in accordance with
SFAS No. 144 as discussed above. See Note 9.

Income Taxes
We account for income taxes in  accordance  with SFAS No. 109,  "Accounting  for
Income Taxes." Under the asset and liability  method  specified by SFAS No. 109,
deferred  tax assets  and  liabilities  are  determined  based on the  temporary
differences  between the financial  statement  basis and tax basis of assets and
liabilities  as  measured  by the  enacted  tax rates for the years in which the
taxes are expected to be paid.  We evaluate our deferred tax assets on a regular
basis to  determine if a valuation  allowance  is required.  To the extent it is
determined the  recoverability of the deferred tax assets is unlikely,  we would
record a valuation  allowance  against deferred tax assets. As of March 31, 2004
and  2003,  we had a  valuation  allowance  of $0.3  million  and $0.4  million,
respectively, recorded against our Canadian net operating loss carryforwards.

Program Supplier Reserves
We  have  entered  into  guarantee  contracts  with  certain  program  suppliers
providing  titles  for  distribution  under  our  PPT  system.  These  contracts
guarantee the Program  Suppliers  minimum  payments that are recoupable based on
revenue-sharing  activity.  In some cases, these guarantees are paid in advance.
For amounts not paid in advance,  we record a liability  for the gross amount of
the guarantee due to the Program  Supplier on the street date in accordance with
SOP 00-2.  The  unearned  portion of the  guarantees  is included as Advances to
Program  Suppliers  on  our  consolidated   balance  sheets.   Using  historical
experience and year to date rental  experience  for each title,  we estimate the
projected  revenue to be generated  under each guarantee.  We have  historically
been  able to  reasonably  estimate  shortages  after  30 to 60  days of  rental
activity.  We then  establish  a Program  Supplier  reserve  for titles that are
projected to experience a shortage under the  provisions of the  guarantee.  The
program supplier reserve is netted against Advances to Program  Suppliers on our
consolidated  balance  sheets.  We  continually  review  these  factors and make
adjustments  to the reserves as needed.  Actual  results could differ from these
estimates  and could have a material  effect on the  recorded  Program  Supplier
reserves.  The balance in this reserve  totaled  $4.5 million and $3.7  million,
respectively, at March 31, 2004 and 2003.

Foreign Currency Translation
Adjustments from translating  foreign functional  currency financial  statements
into U.S. dollars are included in cumulative other  comprehensive  income in the
consolidated  statement of stockholders'  equity.  Transaction  gains and losses
that arise from exchange rate  fluctuations  on  transactions  denominated  in a
currency  other than the local  currency  are included as a component of selling
and administrative expenses in our consolidated statements of operations.

Earnings (Loss) Per Share
Basic net income  (loss) per share (EPS) and diluted EPS are computed  using the
methods  prescribed  by

                                       28

<PAGE>

SFAS No. 128,  "Earnings per Share." Following is a reconciliation of the shares
used for the basic EPS and diluted EPS  calculations  for fiscal 2004,  2003 and
2002:

                                     Year Ended March 31,
                          -------------------------------------
                             2004          2003        2002
                          ----------   -----------  -----------

Basic EPS:
Weighted average
 number of shares of
 common stock
 outstanding             $ 9,600,243   $ 9,641,378  $10,415,314
Diluted EPS:
Effect of dilutive           518,436             -      197,459
stock options
                         -----------   -----------  -----------
                         $10,118,679   $ 9,641,378  $10,612,773
                         ===========   ===========  ===========

Options and warrants to purchase  approximately 0.2 million, 2.0 million and 2.3
million shares of our common stock were  outstanding at March 31, 2004, 2003 and
2002,  respectively,  but were not  included in the  computation  of diluted EPS
because the  exercise  price of the options and  warrants  was greater  than the
average market price of the common shares for the period.

Stock-Based Compensation
We account for stock-based  compensation utilizing the intrinsic value method in
accordance  with the provisions of Accounting  Principles  Board Opinion No. 25,
"Accounting   for  Stock  Issued  to   Employees,"   as   interpreted   by  FASB
Interpretation  No. 44,  "Accounting  for Certain  Transactions  Involving Stock
Compensation." Pursuant to SFAS No. 148 "Accounting for Stock-Based Compensation
-  Transition  and  Disclosure,"  we have  computed,  for pro  forma  disclosure
purposes,  the impact on net income (loss) and net income (loss) per share as if
we had accounted for our stock-based  compensation  plans in accordance with the
fair  value  method  prescribed  by SFAS No.  123  "Accounting  for  Stock-Based
Compensation" as follows:

Year Ended March 31,                        2004          2003        2002
---------------------------------------  -----------  -----------  -----------
                                                        (restated) (restated)
Net income (loss), as reported          $  1,309,744  $  (727,103) $ 9,061,741
Deduct - total stock-based employee
  compensation expense determined
  under the fair value based method         (871,918)  (1,119,812)  (1,205,121)
  for all awards, net of related tax
  effects                                -----------    ---------  -----------
Net income (loss), pro forma            $    437,826  $(1,846,915) $ 7,856,620
                                         ===========  ===========  ===========
Net income (loss) per share - basic,    $       0.14  $     (0.08) $      0.87
 as reported                             ===========  ===========  ===========
Net income (loss) per share - basic,    $       0.05  $     (0.19) $      0.75
 pro forma                               ===========  ===========  ===========
Net income (loss) per share -           $       0.13  $     (0.08) $      0.85
 diluted, as reported                    ===========  ===========  ===========
Net income (loss) per share -           $       0.04  $     (0.19) $      0.74
 diluted, pro forma                      ===========  ===========  ===========

To  determine  the  fair  value  of  stock-based  awards  granted,  we used  the
Black-Scholes   option  pricing  model  and  the  following   weighted   average
assumptions:

Year Ended March 31,              2004           2003           2002
------------------------       ------------   ------------   ------------
Risk-free interest rate        3.09-4.62%     3.57-5.45%     4.08-5.47%
Expected dividend yield                0%             0%             0%
Expected lives                 5-10 years     5-10 years     5-10 years
Expected volatility                75.54%         77.69%         81.28%



                                       29

<PAGE>


Using the Black-Scholes methodology, the total value of stock awards and options
granted during fiscal 2004, 2003 and 2002 was approximately  $1.4 million,  $2.4
million and $1.0 million, respectively,  which would be amortized on a pro forma
basis over the vesting period of the options,  typically one to four years.  The
weighted  average fair value of stock awards and options  granted  during fiscal
2004,  2003 and 2002 was $5.43 per  share,  $3.89 per share and $2.41 per share,
respectively.  The  pro  forma  effects  of  applying  SFAS  No.  123 may not be
indicative of the future.

Advertising Expense


Advertising  costs are expensed as incurred.  Direct expenses  incurred  totaled
approximately  $0.6  million,  $1.1 million and $2.3 million,  respectively,  in
fiscal  2004,  2003 and 2002.  Reimbursements  received  for direct and indirect
expenses  totaled  approximately  $1.5  million,  $3.0 million and $2.1 million,
respectively, in fiscal 2004, 2003 and 2002.

The advertising reimbursements from Program Suppliers are contractually provided
to the company to offset  expenses  incurred in  maintaining  ongoing  marketing
programs utilized by our Participating  Retailers. A significant amount of these
reimbursements are passed through to our Participating  Retailers as the Company
reimburses them for their direct expense of local advertising, such as newspaper
or radio ads. In addition,  the  reimbursements  offset  expenses  paid by us to
third-party vendors in maintaining programs that indirectly assist Participating
Retailers in these marketing efforts.

These  reimbursements  are based on contractual  agreements.  Contractual  terms
fluctuate by Program Supplier and the amount of reimbursement  tends to be based
on the performance of individual movie titles.

Reimbursements   provided  by  a  Program   Supplier  can  be  "accountable"  or
"unaccountable".  The Program Supplier provides  accountable amounts only to the
extent  that we provide  documentary  evidence  of the funds paid  either to our
Participating   Retailers  directly  or  paid  to  third  parties.   Accountable
reimbursements  are  recorded as a reduction of the same income  statement  line
item,  SG&A, in which the cost are recorded which  typically  occurs in the same
accounting  period.  Unaccountable  reimbursements  are normally  calculated and
awarded  on a fixed  amount  per  unit of  product  shipped  and do not  require
substantiation  that  any  payments  were made  to  promote  marketing  efforts.
Unaccountable  reimbursements  are  recognized  when  units of their  associated
product  are  shipped,  which  is when a  majority  of the  direct  or  indirect
marketing  effort,  and the corresponding  expense is incurred,  which typically
occurs within the same  reporting  period.  Unaccountable  reimbursements  under
contracts  that were entered into prior to December 31, 2002 are  classified  as
reductions to SG&A on the income statement,  while unaccountable  reimbursements
under  contracts  entered into or modified  subsequent to December 31, 2002 were
classified as reductions to cost of sales on the income  statement in accordance
with EITF 02-16.




Comprehensive Income (Loss)
Comprehensive  income (loss) includes  charges or credits to equity that are not
the result of transactions  with  shareholders.  Components of our comprehensive
income  (loss)  consist of the change in  unrealized  gain (loss) on  investment
securities, net of tax, and changes to our cumulative translation adjustment.

Reclassifications
Certain reclassifications have been made to prior year amounts to conform to the
current year presentation.

Note 3.  New Accounting Pronouncements

In January 2003,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Interpretation  No.  46,

                                       30

<PAGE>

"Consolidation of Variable Interest  Entities:  an Interpretation of ARB No. 51"
(FIN 46). FIN 46 addresses  consolidation by business enterprises of entities in
which  equity  investors  do  not  have  the  characteristics  of a  controlling
financial  interest or do not have  sufficient  equity at risk for the entity to
finance its activities  without additional  subordinated  financial support from
other parties.  Variable  interest  entities are required to be  consolidated by
their primary  beneficiaries  if they do not  effectively  disperse  risks among
parties involved.  The primary  beneficiary of a variable interest entity is the
party that  absorbs a majority  of the  entity's  expected  losses or receives a
majority of its expected residual returns. The consolidation requirements of FIN
46 apply  immediately to variable  interest  entities  created after January 31,
2003 and apply to existing  entities in the first fiscal year or interim  period
beginning after June 15, 2003. Certain new disclosure  requirements apply to all
financial  statements  issued after  January 31, 2003.  The  application  of the
provisions  of  FIN 46  did  not  have a  material  effect  on our  consolidated
financial statements.

In November  2002,  the FASB  Emerging  Issues Task Force  issued its  consensus
concerning Revenue Arrangements with Multiple  Deliverables ("EITF 00-21"). EITF
00-21  addresses  how to  determine  whether  a  revenue  arrangement  involving
multiple deliverables should be divided into separate units of accounting,  and,
if  separation  is  appropriate,  how the  arrangement  consideration  should be
measured and allocated to the identified  accounting units. The guidance in EITF
00-21 is  effective  for revenue  arrangements  entered  into in fiscal  periods
beginning  after  June 15,  2003.  The  adoption  of EITF 00-21 did not have any
effect on our consolidated financial statements.

Note 4.  Restatement

In May and June 2004, we discovered  that we had  misinterpreted  and misapplied
certain terms of some of our Program Supplier revenue sharing agreements.  These
misinterpretations and misapplications resulted in the miscalculation of Program
Supplier  liabilities  and  related  cost of sales  and,  therefore,  net income
(loss). There were two general types of  misinterpretations  or misapplications:
(i) over  reporting  cost of  sales  and  overstating  assets  and  understating
liabilities due to the  misapplication  of certain terms in our Program Supplier
revenue  sharing  agreements  in the amounts of $0.7  million and $0.8  million,
respectively,  in fiscal 2003 and 2002;  and (ii) under  reporting cost of sales
and related liabilities due to the misuse of contract information in recognizing
our  guarantees to one Program  Supplier in the amounts of $0.9 million and $0.7
million, respectively, in fiscal 2003 and 2002.

The  misstatement  that resulted in over reporting our cost of sales and related
liabilities was due to a misapplication  of terms in one of our Program Supplier
revenue sharing agreements.  Our accounting methodology for recognizing revenues
and associated  expenses is based on the  establishment  of certain  contractual
terms and algorithms when a revenue sharing agreement is executed with a Program
Supplier.   These   contractual   terms   are   used   in   calculations   on  a
transaction-by-transaction  basis.  In the course of our fiscal year 2004 audit,
we  discovered  that  some of  these  contractual  terms  were  not  established
appropriately  in our  accounting  system  in  accordance  with the terms of the
contract with this Program Supplier. Our accounting system had been inaccurately
programmed with an algorithm that calculated the cost of sales and corresponding
liability.  This  calculation  misapplied a  contractual  term to certain  items
relating to that Program Supplier's product,  which resulted in an overstatement
of the liability to that Program Supplier. We have since modified our accounting
system to establish the appropriate contractual terms for this Program Supplier.
In addition, we have reviewed all key algorithms within our accounting system to
ensure they are aligned with Program Supplier contractual terms.

The  misstatement  that  resulted  in  under  reporting  of  cost of  sales  and
overstating assets and understating liabilities was due to the misinterpretation
of  contractual  information  in a  revenue  sharing  agreement  with one of our
Program  Suppliers.  We believed we could offset prior guarantee  shortages with
future guarantee overages,  based upon the contractual provisions.  In reviewing
the contractual  agreement with members of operating  personnel,  the Accounting
Department realized we had been misinterpreting those contractual provisions and
that we are not  permitted  to offset  prior  guarantee  shortages  with  future
guarantee  overages.  We have since modified our  accounting  processes for this
Program  Supplier to include the appropriate  guarantee  liability  calculation.
Please note that our Critical Accounting Policies and Estimates disclosure as it
relates to Program Supplier  Reserves for contractual  guarantees was

                                       31

<PAGE>

accurately stated and was not affected by this restatement or process change.


Also in June 2004, we discovered  that we were not  accounting for certain order
processing  fees received from our  customers  upon "street  date," which is the
date that they are able to rent the title  pursuant  to SOP 00-2.  Our  previous
method had been to recognize  revenue on the shipment  date.  This resulted in a
restatement of revenue between periods.

In addition,  in connection with the  embezzlement  of funds by an employee,  as
discussed  in more  detail  in Note 16  below,  we  underreported  our sales tax
liability in fiscal 2003.  We record our sales tax  liabilities  as an offset to
revenue.

The restatements did not affect cash flows from operations, investing activities
or financing  activities in any fiscal year.  For details on the  restatement of
our first,  second and third quarters of fiscal 2004,  see "Quarterly  Financial
Data." We have  restated  our fiscal years ended March 31, 2003 and 2002 and the
related balance sheet accounts at March 31, 2003 as follows:

<TABLE>
<CAPTION>

                                Year Ended March 31, 2003
-------------------------------------------------------------------------------------

                                                         Income      Income
                                   Cost        Total      tax      (loss) from
(In thousands)                      of       operating  expense    continuing
                       Revenue     sales     expenses  (benefit)   operations  Net loss
                       --------  --------    --------  ---------   --------    ------
<S>                    <C>       <C>         <C>       <C>         <C>         <C>
As previously reported $ 86,220  $ 71,315    $ 86,231  $      85   $     84    $ (498)
Adjustment for
misinterpretation and
misapplication of            --       239         239        (91)      (148)     (148)
contract
terms
SOP 00-2 revenue
recognition                (274)     (206)       (206)       (25)       (43)      (43)
adjustment
Underreporting of sales
 tax                        (62)       --          --        (24)       (38)      (38)
Rounding                     --        (1)         --         (1)         1         -
                       --------  --------    --------  ---------   --------    ------
As restated            $ 85,884  $ 71,347    $ 86,264  $     (56)  $   (144)    $(727)
                       ========  ========    ========  =========   ========     =====

</TABLE>

After the above adjustments, our basic and diluted net loss per share for fiscal
2003 increased to $(0.08) per share  compared to the  previously  reported basic
and diluted net loss per share of $(0.05) as previously reported.


                                       32

<PAGE>

                             March 31, 2003
---------------------------------------------------------------------------

                                              Current
                       Accounts  Advances    deferred   Total
(In thousands)          receiv-  to Program    tax     current      Total
                         able    Suppliers    assets    assets      assets
--------------------   --------  --------    --------  --------    --------
As previously reported $  9,706  $    418    $  2,797  $ 25,496    $ 30,726
Adjustment for
 misinterpretation
 and misapplication
 of contract terms
     Current period          --      (586)         91      (495)       (495)
     Prior periods           --     1,999        (514)    1,485       1,485
SOP 00-2 revenue
 recognition adjustment
     Current period        (274)       --          25      (249)       (249)
     Prior periods           (3)       --          --        (3)         (3)
Underreporting of sales
  tax, current period        --        --          24        24          24
                       --------  --------    --------  --------    --------
As restated            $  9,429  $  1,831    $  2,423  $ 26,258    $ 31,488
                       ========  ========    ========  ========    ========

<TABLE>
<CAPTION>

                                                                                         Total
                                                                             Total     liabilities
                                                     Total      Accumu-      stock-    and stock-
                          Accounts     Accrued      current      lated       holders'   holders'
(In thousands)             payable   liabilities  liabilities   deficit      equity      equity
-----------------         --------    -------      --------    ---------    --------    --------
<S>                       <C>         <C>          <C>         <C>          <C>         <C>
As previously reported    $ 12,711    $ 1,144      $ 14,621    $ (24,409)   $ 15,437    $ 30,726
Adjustment for
 misinterpretation and
 misapplication of
 contract terms:
     Current period           (347)        --          (347)        (148)       (148)       (495)
     Prior periods             645         --           645          840         840       1,485
SOP 00-2 revenue
recognition adjustment:
     Current period           (206)        --          (206)         (43)        (43)       (249)
     Prior periods              (2)        --            (2)          (1)         (1)         (3)
Underreporting of sales
 tax, current period            --         62            62          (38)        (38)         24
                          --------    -------      --------    ---------    --------    --------
As restated               $ 12,801    $ 1,206      $ 14,773    $ (23,799)   $ 16,047    $ 31,488
                          ========    =======      ========    =========    ========    ========

                        Year Ended March 31, 2002
------------------------------------------------------------------------------------------------
                                                                             Income
                                       Cost          Total       Income       from
                                        of         operating      tax      continuing      Net
(In thousands)             Revenue     sales        expenses    expense    operations    income
                          --------    -------      --------    ---------    --------    --------
As previously reported    $ 95,994    $71,994      $ 88,122    $   5,998    $  9,787    $  8,994
Adjustment for
 misinterpretation
 and misapplication of
 contract terms                 --       (102)         (102)          39          63          63
SOP 00-2 revenue
 recognition                    27         21            21            2           4           4
 adjustment
Rounding                        --         --            (1)           1          --           1
                          --------    -------      --------    ---------    --------    --------
As restated               $ 96,021    $71,913      $ 88,040    $   6,040    $  9,854    $  9,062
                          ========    =======      ========    =========    ========    ========


</TABLE>

After the above  adjustments,  our basic net income  per share for  fiscal  2002
increased to $0.87 per share compared to the $0.86 per share previously reported
and our diluted net income per share remained unchanged at $0.85 per share.

                                       33

<PAGE>


Note 5.  3PF

In June 2002,  3PF entered into an agreement to sublease  approximately  194,000
square  feet of its  distribution  facility  in  Columbus,  Ohio to its  largest
customer.  The sublease  required  monthly rent  payments to 3PF under  amounts,
terms  and  conditions   similar  to  3PF's  master  lease  for  this  facility.
Additionally  in June 2002,  in  conjunction  with the  facility  sublease,  3PF
entered into a financing  lease with this  customer  for the existing  equipment
within  this  distribution  facility  and the  associated  costs for  additional
equipment to configure the layout to the  customer's  specifications.  The lease
for the equipment  resulted in a note  receivable in the amount of $1.8 million,
payable to 3PF in monthly  installments.  All  payments on this note  receivable
have been  received  as  scheduled  and,  as of March 31,  2004,  there was $1.0
million  outstanding on this note receivable,  $0.4 million of which is included
with other current assets on our consolidated  balance sheet and $0.6 million of
which is included with other assets.

In the fourth quarter of fiscal 2003, management determined that it was unlikely
that 3PF would  achieve  its  business  plans and  initiated  a plan to sell the
assets of 3PF. Prior to March 31, 2003, it was determined that, more likely than
not,  substantially all of 3PF's assets would be sold or otherwise  disposed of.
As a result of this determination,  management assessed during the quarter ended
March 31,  2003,  the current and  historical  operating  and cash flow  losses,
prospects  for growth in  revenues  and other  alternatives  for  improving  the
operating results of 3PF.

Accordingly,  management  performed an  assessment  of the fair value of the 3PF
assets under the  guidelines  of SFAS No. 144. This  assessment  resulted in 3PF
recognizing an asset impairment charge during the three-month period ended March
31, 2003 in the amount of $844,000 for the write down of its assets to estimated
fair market value of approximately $800,000.

In June  2003,  we  announced  we had  signed  a  definitive  agreement  to sell
substantially  all of the  assets  of 3PF  at the  Wilmington,  Ohio  operation,
effective  July 1,  2003.  The  operations  of 3PF  have not  been  reported  as
discontinued  operations in accordance  with SFAS No. 144,  "Accounting  for the
Impairment or Disposal of Long-Lived  Assets," because cash flows related to our
fulfillment  activities  have  not been  completely  eliminated.  The  agreement
covered all equipment and leasehold  improvements  at 3PF's leased  distribution
facility in Wilmington,  Ohio, as well as a portion of its working  capital.  As
part of the agreement, 3PF as lessee and Rentrak as guarantor have been released
from the lease. The cash purchase price of $800,000,  approximately equal to the
net book value of the assets sold at March 31, 2003, was received in full.

During the sale  negotiations,  we  received  notification  from  3PF's  largest
customer,   serviced  exclusively  from  the  leased  distribution  facility  in
Columbus, Ohio, that it did not intend to renew its fulfillment service contract
upon the scheduled expiration at July 31, 2003. The Columbus,  Ohio distribution
facility was used  exclusively  to service this  customer.  Due to the timing of
this notification,  we were not able to include the Columbus,  Ohio distribution
facility lease in the asset sale  transaction.  We completed the  termination of
the lease obligation for the Columbus,  Ohio  distribution  facility,  effective
December 1, 2003,  for a cost of  $650,000,  which is included as a component of
cost  of  sales  in  our  consolidated  statement  of  operations.   This  lease
termination  included the  assignment  of the sublease 3PF had in place with its
former largest customer for approximately 194,000 square feet of this facility.

Note 6.  Rentrak Japan

In December  1989, we entered into an agreement  with Culture  Convenience  Club
Co.,  Ltd.  (CCC),  to  create  Rentrak  Japan,  which  was to  develop  our PPT
distribution and information processing business in certain overseas markets.

On June 16, 1994,  the  agreement  was amended to state that we would  receive a
royalty of 1.67% for all sales of up to $47,905,000,  plus one-half of 1% (0.5%)
of sales greater than $47,905,000 in each fiscal year. In addition,  we received
a one-time  royalty of $2  million,  of which $1 million was paid in fiscal 1995

                                       34

<PAGE>

and $1 million was paid in fiscal 1999.  The term of the  agreement was extended
from the year 2001 to the year 2039.

In December  1999, we received a prepayment of $2.5 million in exchange for $4.0
million of credit related to the annual royalty described above. This credit was
being  recognized  as revenue as  royalties  were earned  under the terms of the
contract.  As discussed below, this contract was terminated in fiscal 2002, with
Rentrak Japan forfeiting its rights to the remaining $700,000 prepayment.

During fiscal 2002, the royalty  agreement was  terminated and all  intellectual
property  rights and  trademarks  of the PPT system  were agreed to be usable by
Rentrak Japan in  perpetuity.  Consideration  for these changes  included a cash
payment from Rentrak Japan to us of  approximately  $5.7 million for  royalties,
forfeiture by Rentrak  Japan of any right of return of the 1999 prepaid  royalty
of $700,000,  and  forgiveness  by Rentrak  Japan of  approximately  $567,233 of
receivables  due to Rentrak  Japan from us. Of these  amounts,  $6.4 million was
recorded in other  revenue as royalty  revenue  consistent  with the  historical
treatment of royalty payments. The remaining $567,233 was recorded as a gain and
is  included  in other  income in the  accompanying  consolidated  statement  of
operations.

In April and October 2001,  we sold all of our 5.6% interest in Rentrak  Japan's
stock for approximately  $6.4 million.  In return,  Rentrak Japan sold 1,004,000
shares of our common  stock back to us on April 2, 2001 for  approximately  $3.9
million.  The $3.9 million purchase price for this common stock  transaction was
determined based upon the approximate  market price at which our stock was being
traded at that time.  The sale of the Rentrak Japan stock  resulted in a gain of
$6.4  million as we had written  this  investment  down to zero due to recurring
losses  during the initial  years of Rentrak  Japan's  operations.  The value of
Rentrak Japan stock was determined in the  negotiations  of the agreement.  This
gain is included in other income in the accompanying  consolidated  statement of
operations.

Finally,  Rentrak Japan  purchased  17,000 shares of 3PF common stock from us on
April 27, 2001 for $1.0 million.  The purchase price of the stock was based on a
valuation of 3PF made at that time. No minority interest was recorded as 3PF had
negative  shareholders'  equity and 3PF was  solely  dependent  on  Rentrak  for
support.

In  summary,  total  net cash  proceeds  from the  above  transactions  was $3.5
million,  which was comprised of the $1.0 million from our sale of 3PF stock and
$2.5  million  from the net  proceeds  of the sales of Rentrak  Japan  stock and
Rentrak stock.

The total gain included in other income was $8.0 million, which was comprised of
the $1.0  million  from the sale of 3PF  stock,  $6.4  million  from the sale of
Rentrak Japan stock, and $567,263  resulting from the forgiveness of liabilities
due to Rentrak Japan.

Based upon the results of the  transactions  noted above occurring in the fiscal
year ended March 31,  2002,  we had no further  contractual  obligations  to, or
ownership in, Rentrak Japan as of March 31, 2002.

Note 7.  Rentrak UK Limited

In February  1998,  we entered into a  Shareholders  Agreement and a PPT License
Agreement with Columbus  Holdings Limited and Rentrak UK Limited (Rentrak UK) to
develop our PPT distribution and information  processing  business in the United
Kingdom  through  Rentrak UK. The PPT Agreement  remains in force in perpetuity,
unless terminated due to material breach of contract, liquidation of Rentrak UK,
or  non-delivery,  by us to Rentrak  UK, of all  retailer  and studio  software,
including all updates. Pursuant to the PPT Agreement, during the term of the PPT
Agreement,  we will  receive a royalty of 1.67% of Rentrak  UK's gross  revenues
from any and all sources. No amounts were earned under this royalty agreement in
fiscal 2004, 2003 or 2002.

                                       35

<PAGE>


Note 8.  Discontinued Operations

Due  to the  significant  increase  in  sell  through  activity  throughout  the
industry,  the operations of BlowOut Video did not meet our  expectations.  As a
result, during fiscal 2003, we initiated and completed a plan to discontinue the
retail store  operations of BlowOut Video.  The plan called for an exit from the
stores by the end of  fiscal  2003,  either  through  cancellation  of the lease
commitments and liquidation of assets,  or through sale of the stores to a third
party. As of March 31, 2003, all operations had ceased.

In January  2004,  we were  notified  by the  purchaser  of a portion of BlowOut
Video's operations of their intent to default on a note receivable due to us. As
such, we provided an approximate $0.2 million reserve for the remaining  balance
of this note receivable in the three-month  period ended December 31, 2003. This
reserve resulted in a reported loss, net of tax benefit, from these discontinued
operations of $128,649,  or $0.01 per share,  in fiscal 2004.  Current and prior
year  amounts  have been  restated  to  classify  the  results of BlowOut  Video
operations, net of related tax effects, as discontinued.

The results of operations related to BlowOut Video were as follows:


                          Year Ended March 31,
                --------------------------------------
                   2004          2003          2002
                ----------    ----------    ----------
Revenue         $       --    $2,575,733    $6,620,165
Net loss        $ (128,649)   $ (582,627)   $ (792,757)
Net loss per
diluted share   $    (0.01)   $    (0.06)   $    (0.07)

Note 9.  Property and Equipment

Property and equipment consists of:
                                             March 31,
                                      ------------------------
                                         2004          2003
                                      ----------    ----------
Furniture,  fixtures  and  computer   $3,295,970    $3,522,614
equipment
Machinery and equipment                       --     1,235,533
Leasehold improvements                   594,527     1,063,752
Capitalized software                   1,910,499     1,198,032
                                      ----------    ----------
                                       5,800,996     7,019,931
Less accumulated depreciation and     (3,334,328)   (4,615,168)
amortization                          ----------    ----------
                                      $2,466,668    $2,404,763
                                      ==========    ==========

Amortization expense related to capitalized software was $332,602,  $212,794 and
$108,807,  respectively,  for the years ended March 31,  2004,  2003,  and 2002,
respectively.  Accumulated  amortization  related to  capitalized  software  was
$436,589 and $321,602,  respectively,  at March 31, 2004 and 2003.  Amortization
expense  related to  capitalized  software over the next five fiscal years as of
March 31, 2004 is as follows:


2005       $   502,822
2006           545,042
2007           304,229
2008           121,817
2009                --
             ---------
           $ 1,473,910
             =========

                                       36

<PAGE>


Note 10.  Retailer Financing Program

In 1992, we established a retailer  financing  program  whereby,  on a selective
basis,  we provided  financing to  Participating  Retailers that we believed had
potential  for  substantial  growth in the industry.  In  connection  with these
financings,   we  typically  made  a  loan  and/or  equity   investment  in  the
Participating  Retailer.  In some cases, we obtained a warrant to purchase stock
in the  Participating  Retailer.  As part of such financings,  the Participating
Retailer  typically  agreed  to  cause  all of its  current  and  future  retail
locations  to  participate  in the PPT  System for a  designated  period of time
(usually 5-20 years). These financings were speculative in nature and involved a
high degree of risk.

The  loans  are  reviewed  for  impairment  in  accordance  with  SFAS No.  114,
"Accounting  by Creditors for  Impairment of a Loan." A valuation  allowance has
been  established  for the amount by which the recorded  investment in the loans
exceeds the measure of the impaired loan.  Periodically  throughout the terms of
the  agreements,  we assessed  the  recoverability  of the amounts  based on the
financial position of each retailer.

We  discontinued  this program in fiscal 2001. As of March 31, 2004 and 2003, we
had  invested  or  loaned a total of $6.6  million  under  the  program  and had
provided  reserves for the entire  amount.  These balances are included in other
assets.  The activity in the reserve account for the retailer  financing program
is as follows:

                                  Year Ended March 31,
                      ---------------------------------------
                          2004          2003          2002
                      -----------   -----------   -----------
Beginning balance     $ 6,530,754   $ 6,575,754   $ 6,598,514
Additions to reserve           --            --        50,000
Write-offs                     --            --            --
Recoveries                (31,422)      (45,000)      (72,760)
                      -----------   -----------   -----------
Ending balance        $ 6,499,332   $ 6,530,754   $ 6,575,754
                      ===========   ===========   ===========

Note 11.  Line of Credit

We currently  have a secured  revolving  line of credit for $2.0 million,  which
expires  September 1, 2004. We expect to renew this line prior to its expiration
under similar  terms.  Interest on the line of credit is at our choice of either
the bank's prime  interest  rate minus 0.5 percent or LIBOR plus 2 percent.  The
credit  line is secured by  substantially  all of our  assets.  The terms of the
credit  agreement  include  certain  financial   covenants   requiring:   (1)  a
consolidated  net loss for the fiscal  quarter ended  September 30, 2003, not to
exceed $2.0 million;  (2) a  consolidated  net profit to be achieved each fiscal
quarter  beginning  with the  quarter  ended  December  31, 2003 of a minimum of
$1.00,  and  consolidated  net profit  not less than  $1.00 on an annual  basis,
determined  at fiscal year end; and (3)  achievement  of  specified  current and
leverage  financial ratios. At March 31, 2004, we had no outstanding  borrowings
under this agreement.

Note 12.  Related Party Transactions

Dr. Joon S. Moon, a Rentrak  Director,  received a fee totaling $241,500 for his
services in  negotiating  the business  restructuring  transaction  with Rentrak
Japan  in  fiscal  2002.  Dr.  Moon  also  received  a  fee  in  the  amount  of
approximately  $48,000  as  compensation  for his  services  in  fiscal  2002 in
connection with the sale of our remaining 180,000 shares of Rentrak Japan stock.
See Note 6.

One of our officers held the position of President of a corporation that had one
store  participating in the PPT program.  We recognized revenues from this store
of $30,830 in fiscal 2004, $29,195 in fiscal 2003 and $14,294 in fiscal 2002.

                                       37

<PAGE>

Note 13.  Income Taxes

Income (loss) from  continuing  operations  before income taxes consisted of the
following:
                                            Year Ended March 31,
                                   -------------------------------------
                                      2004         2003         2002
                                   -----------  ----------  ------------
                                                (restated)    (restated)
U.S.                               $ 1,685,034  $ (497,059) $ 15,852,426
Non-U.S.                               232,255     297,055        41,926
                                   -----------  ----------  ------------
                                   $ 1,917,289  $ (200,004) $ 15,894,352
                                   ===========  ==========  ============

The  provision  (benefit)  for income  taxes from  continuing  operations  is as
follows:

                                            Year Ended March 31,
                                   -------------------------------------
                                       2004         2003         2002
                                   -----------  ----------  ------------
                                                  (restated)  (restated)
Current tax provision (benefit):   $            $           $
  Federal                                   --      45,001       309,585
  State                                 40,338          --        31,000
                                   -----------  ----------  ------------
                                        40,338      45,001       340,585
Deferred tax provision (benefit)       438,558    (100,529)    5,699,269
                                   -----------  ----------  ------------
                                   $   478,896  $  (55,528) $  6,039,854
                                   ===========  ==========  ============

The reported  provision  (benefit) for income taxes from  continuing  operations
differs from the amount  computed by applying the statutory  federal  income tax
rate of 34% to income before provision (benefit) for income taxes as follows:

                                            Year Ended March 31,
                                   -------------------------------------
                                       2004         2003         2002
                                   -----------  ----------  ------------
                                                (restated)   (restated)
Provision (benefit) computed at    $   651,878  $  (68,001) $  5,404,080
statutory rates
State taxes, net of federal             76,692      (8,000)      635,775
benefit
Amortization of warrants                    --     120,700        22,800
Amortization of intangibles           (121,522)   (121,522)     (121,522)
Change in valuation allowance          (78,968)         --            --
Other                                  (49,184)     21,295        98,721
                                   -----------  ----------  ------------
                                   $   478,896  $  (55,528) $  6,039,854
                                   ===========  ==========  ============

Deferred tax assets from  continuing  operations  are comprised of the following
components:
                                           March 31,
                                   -----------------------
                                      2004         2003
                                   -----------  ----------
                                                (restated)
Current deferred taxes:
  Allowance for doubtful accounts  $   189,205  $  241,643
  Program supplier reserves            487,773     501,120
  Foreign tax credit                        --      49,246
  Net operating loss carryforwards   1,167,124     779,432
  Unrealized loss on investments       118,785     118,785
  Deferred revenue                      90,279     145,043
  Deferred gain                         22,917          --
  Other                                186,103     587,769
                                   -----------  ----------
    Total current deferred taxes     2,262,186   2,423,038

Non-current deferred taxes:
  Depreciation                          32,207      53,479
  Retailer financing program           659,748     360,089
reserve
  Deferred gain                         40,991     127,995
  Net operating loss carryforwards     298,821     377,789
  Other                                366,714     352,520
Valuation allowance                   (298,821)   (377,789)
                                   -----------  ----------
    Total non-current deferred       1,099,660     894,083
taxes
                                   -----------  ----------
Total deferred taxes               $ 3,361,846  $3,317,121
                                   ===========  ==========

                                       38

<PAGE>


As of March 31, 2004,  we had estimated net  operating  loss  carryforwards  for
federal income tax return purposes of approximately  $3.4 million,  which expire
through 2024. In addition,  we have net operating loss  carryforwards  in Canada
totaling $0.9 million,  the tax benefit of which has been fully reserved,  which
expire through 2008.

In assessing the realizability of deferred tax assets, we consider whether it is
more likely than not that some  portion or all of the  deferred  tax assets will
not be realized.  The ultimate  realization  of deferred tax assets is dependent
upon the  generation of future  taxable income during the periods in which those
temporary  differences become deductible.  We consider the scheduled reversal of
deferred  tax  liabilities,  projected  future  taxable  income and tax planning
strategies  in  making  this   assessment.   Based  on  these   assessments  and
considerations,  we have provided a valuation allowance against our Canadian net
operating loss  carryforwards due to expected revenue and income levels from our
Canadian  operations in the near term. We anticipate that all other deferred tax
assets  will be  realized  based on future  estimated  taxable  income and have,
therefore, not recorded a valuation allowance against them.

Note 14.  Stockholders' Equity

Stock Options
We have  options  outstanding  under  our  1986  Stock  Option  Plan,  our  1997
Non-Officer  Employee Stock Option Plan and our 1997 Equity  Participation Plan.
The  aggregate  number of shares of our common stock  issuable  upon exercise of
options  under the 1997  Non-Officer  Employee  Stock Option Plan may not exceed
800,000.  The  aggregate  number of shares of our  common  stock  issuable  upon
exercise of options under the 1997 Equity  Participation  Plan, as amended,  may
not exceed 2,075,000. As of March 31, 2004, options covering 350,847 and 304,988
shares  of our  common  stock  remained  available  for  grant  under  our  1997
Non-Officer  Employee Stock Option Plan and our 1997 Equity  Participation Plan,
respectively.

Our option plans are  administered by the  Compensation  Committee of our Board,
which  determines  the terms and  conditions of options  issued under the plans.
Options  granted  under the plans  vest over  periods  of one to five  years and
expire ten years after the date of grant.

The table below summarizes the plans' activity:

                                        Options Outstanding
                                     --------------------------

                                                     Weighted
                                     Number of       Average
                                       Shares      Exercise Price
                                     ---------    -------------
Balance at March 31, 2001            1,664,689    $  4.07
Granted - option price = fair          403,000       3.29
market value
Exercised                             (227,812)      3.22
Canceled                              (210,453)      4.84
                                     ---------    -------------
Balance at March 31, 2002            1,629,424       3.97
Granted - option price = fair          519,350       5.50
market value
Granted - option price > fair          100,000       5.00
market value
Exercised                             (112,043)      4.18
Canceled                              (153,312)      4.02
                                     ---------    -------------
Balance at March 31, 2003            1,983,419       4.35
Granted - option price = fair          178,100       7.62
market value
Granted - option price > fair           80,000       6.89
market value
Exercised                             (285,519)      4.07
Canceled                               (40,218)      4.31
                                     ---------    -------------
Balance at March 31, 2004            1,915,782    $  4.86
                                     =========    =============

                                       39

<PAGE>


The following table summarizes  information  about stock options  outstanding at
March 31, 2004:

               Options Outstanding                      Options Exercisable
---------------------------------------------------   -----------------------
                               Weighted
                                Average     Weighted   Number of     Weighted
   Range of        Number      Remaining    Average     Shares       Average
   Exercise      Outstanding  Contractual   Exercise  Exercisable    Exercise
    Prices       at 03/31/04  Life (years)   Price   at 03/31/04      Price
 --------------  ----------   ----------  ---------   ----------  -----------
 $1.00 - $2.59     27,000         6.8       $2.188       12,000      $2.188
 $2.60 - $6.49  1,636,282         4.9       $4.434    1,203,201      $4.214
 $6.50 - $9.78    252,500         9.2       $7.903       55,000      $7.332
                ---------                             ---------
 $1.00 - $9.78  1,915,782         5.5       $4.860    1,270,201      $4.330
                =========                             =========

Options  to  purchase   1,186,440  and  978,380  shares  of  common  stock  were
exercisable  at March  31,  2003 and 2002,  respectively,  at  weighted  average
exercise prices of $4.06 and $4.31, respectively.

Employee Stock Purchase Plan
During fiscal 2004 we terminated  our Employee  Stock  Purchase Plan (the Plan),
which  allowed  for the  purchase of up to 200,000  shares of our common  stock.
Prior to its termination,  all employees  meeting certain  eligibility  criteria
were  granted  the   opportunity  to  purchase   common  stock,   under  certain
limitations,   at  85%  of  market  value.  Payment  was  made  through  payroll
deductions.  All shares  purchased by  employees  under the Plan in fiscal 2004,
2003 and 2002 were purchased by us on the open market. The following shares were
purchased by employees under the Plan:

                    Number of    Aggregate
                     Shares      Purchase
                    Purchased     Price
                    ----------  ----------
Fiscal 2002          3,079    $  11,005
Fiscal 2003          1,213        5,740
Fiscal 2004            467        3,631

Warrants
We issued  two  separate  warrants  in 1995 and 1998,  which  were  valued by an
outside valuation firm using standard warrant valuation models.

Warrants to purchase  1,423,750 shares of our common stock were issued in fiscal
1995 in connection with a supply  agreement with a program vendor.  The warrants
had an initial exercise price of $7.13 with 284,750 warrants vesting immediately
and  284,750  vesting  over the  following  4  years,  subject  to the  supplier
providing a minimum of one theatrical title each year of the vesting period. The
warrants,  which had expiration  dates through 2005, were valued at $2.3 million
and were expensed over the initial 5 years of the  agreement.  In November 1996,
we adjusted the number of shares of common  stock under which the warrant  could
be exercised to 1,543,203  shares and  decreased  the price to $6.578 per share.
This adjustment was done in connection with the  distribution of common stock of
BlowOut  Entertainment,  Inc. The adjustment was done pursuant to the supplier's
agreement that required us to adjust the warrant if a distribution of our assets
occurred.  During fiscal 2002,  308,641 warrants  expired,  leaving a balance of
1,234,562. During the quarter ended September 30, 2002, 309,041 warrants expired
leaving a balance of 925,521.  In November  2002, we entered into a cancellation
agreement to cancel the remaining 925,521 outstanding warrants.

Under the cancellation  agreement, we paid the program supplier $300,000 in cash
in consideration for the cancellation of the warrants. The $300,000 cash payment
was  charged  to  paid-in-capital  as a  settlement  of an equity  interest.  In
addition,  we agreed to pay the program supplier  supplemental  consideration in
the  event of a change  of  control  (generally  a  greater  than 50%  change in
ownership of our  outstanding  common stock by another  company or group seeking
control) within three years following execution of the agreement.  The amount of
consideration  to be paid in the  event of a change of  control  is based on the
value per  common  share  paid by the  purchaser.  The  amount of  consideration
payable also  decreases  over time.  The  potential  supplemental  consideration
currently ranges from $300,000 to $1.0 million

                                       40

<PAGE>

depending  on the price and  timing of the  purchase.  We have not  accrued  any
amount as of March 31, 2004 due to the  contingent  nature of this  supplemental
consideration.

The value of the warrants  issued in July 1998 was recorded as a deferred charge
in equity of $600,000.  These  warrants  related to a 10-year  supply  agreement
entered  into  with a  major  customer.  The  value  of the  warrants  was to be
amortized  to expense as  services  were  provided.  However,  we  expensed  the
remaining unamortized value of these warrants as of March 31, 2003, based on the
expectation  that the  customer  would not be  utilizing  our services in future
periods. The warrants expired without being exercised in 2000.

In fiscal 2004,  2003 and 2002,  expense  associated with the above warrants was
approximately $0, $355,000 and $60,000, respectively. None of the above warrants
are currently  outstanding  and all associated  expense had been amortized as of
March 31, 2003.

As of March 31, 2004, we had  outstanding  warrants to purchase 30,000 shares of
our common stock with a purchase price of $7.50 per share and an expiration date
of May 16,  2009,  which were issued to an  investment  banking  firm as partial
consideration  for  financial  advisory  services in connection  with  strategic
opportunities or financing transactions of potential interest to us.

Shareholders' Rights Plan
In May  1995,  our Board of  Directors  approved  a  shareholders'  rights  plan
designed to ensure that all of our shareholders receive fair and equal treatment
in the event of certain  proposals  to acquire  control of us.  Under the rights
plan,  each  shareholder  received a dividend of one right for each share of our
outstanding common stock, entitling the holders to purchase one additional share
of our common  stock.  The rights become  exercisable  after any person or group
acquires  15% or more of our  outstanding  common  stock,  or announces a tender
offer,  which would result in the offeror becoming the beneficial  owners of 15%
or more of our  outstanding  common  stock.  Prior to the time  that a person or
group acquires  beneficial  ownership of 15% or more of our  outstanding  common
stock,  the Board of Directors,  at their  discretion,  may waive this provision
with respect to any transaction or may terminate the rights plan.

Executive Loan Program
In June 2000, our Board of Directors  approved an offer to make loans  available
to those  officers  who were under an  employment  contract  for the  purpose of
allowing them to exercise their vested,  unexercised "out of the money" employee
stock options.  The purpose of this program was to enable executives to exercise
certain of their options and thereby hold shares  resulting from the exercise of
such  options in  advance of a possible  spin-off  or  split-up  of 3PF,  and to
enhance our efforts to retain our key employees.

The loans under this  program  accrued  interest  at the  federal  funds rate in
effect on the date of the loan and interest was payable annually.  The principal
amount of each loan was due on the  earliest  to occur of: (i) one year prior to
the expiration of the term of the borrower's  employment  agreement in effect at
the time of the loan; (ii) one year after the borrower ceases employment, unless
such  departure   follows  a  "change  of  control"  (as  defined  in  the  loan
agreements);  (iii) five years from the date of the loan;  or (iv) one year from
the date of the borrower's  death. The loans were secured by the stock purchased
upon the exercise of the options.  The loans were without recourse (except as to
the stock  securing  the  loans)  as to  principal  and were with full  recourse
against the  borrower  as to  interest.  The offer to make these  loans  expired
September 30, 2000. Prior to September 30, 2000,  several officers accepted this
offer and obtained  loans from us.  Because the loan proceeds  were  immediately
used to pay the exercise price of the options,  we had no net outflow of cash in
connection with these loans.

During  fiscal 2002, a former  officer,  who was loaned $6.6 million on June 16,
2000 to purchase  1,362,008  shares of stock upon exercise of his employee stock
options  and,  during the quarter  ended  September  30,  2000,  was loaned $0.7
million to purchase 133,742 shares of stock upon exercise of additional employee
stock  options,  terminated his employment  agreement.  Accordingly,  the common
stock and related  notes  receivable  totaling  $7.3 million were  reversed in a
non-cash transaction.

                                       41

<PAGE>

During fiscal 2003, another officer exercised his right to have us purchase from
him his shares of stock  associated  with his loan,  totaling $0.4 million.  The
proceeds from the purchase of his stock were partially used to pay the remaining
balance of his loan associated  with these shares.  Also during fiscal 2003, the
other remaining  officer with a loan outstanding  under this program allowed his
right  to have us  purchase  his  shares  of stock  associated  with his loan to
expire.  The  shares  associated  with both of these  officers'  loans have been
cancelled and the related notes have been  terminated.  As a result,  all common
stock and related notes  receivable  covered by all agreements  associated  with
this officer loan program noted above have been cancelled or terminated.

Note 15.  Commitments

Leases
We lease certain  facilities  and equipment  under capital and operating  leases
expiring at various dates through 2007.  Minimum lease payments over the term of
the leases exceeding one year are as follows:



Year Ending March 31,              Capital     Operating
                                    Leases       Leases
-------------------------------   ----------  ------------
2005                              $  50,040   $   806,417
2006                                 41,700       791,828
2007                                     --       500,972
2008                                     --            --
2009                                     --            --
Thereafter                               --            --
                                  ---------   -----------
Total minimum lease payments         91,740   $ 2,099,217
                                              ===========
Less amount representing interest     7,264
                                  ---------
Net obligation under capital leases  84,476
Less current portion                 48,278
                                  ---------
Non-current portion               $  36,198
                                  =========

The leases require us to pay for taxes, insurance and maintenance.  We also rent
vehicles and  equipment  on a short-term  basis.  Rent expense  under  operating
leases was approximately  $1.9 million,  $3.2 million,  and $3.6 million for the
fiscal years ended March 31, 2004, 2003, and 2002, respectively.

Note 16.  Contingencies

Vendor Dispute
In June 2003, we signed a definitive  agreement to sell substantially all of the
assets of 3PF at the  Wilmington,  Ohio  operation,  effective July 1, 2003. See
Note 5. In conjunction with the effective date of that asset sale agreement,  we
entered into a Fulfillment  Agreement (the "Agreement") with this purchaser (the
"Fulfillment  Provider")  for a nine-month  term to provide us with  fulfillment
services  previously provided by 3PF during the period we owned and operated it.
After its  inception,  disagreement  between the  parties  arose  regarding  the
contractual  provisions  of the  Agreement.  As a result,  we  disputed  certain
charges for  services  and  withheld  payments  accordingly.  Additionally,  the
Fulfillment Provider alleged that we violated the exclusivity  provisions in the
Agreement.  The Fulfillment Provider has submitted,  under the provisions of the
Agreement,  a demand for arbitration against us seeking damages of approximately
$877,000. We have reviewed the Fulfillment Provider's demand for arbitration and
believe  there is no basis  in fact,  under  the  terms  and  conditions  of the
Agreement, for any of the claims made against us. We have retained legal counsel
to vigorously defend us in this matter. In the opinion of management, the amount
of any  ultimate  liability  with  respect  to this  action is not  expected  to
materially affect our financial condition or results of operations.

                                       42

<PAGE>


Investigation and Recovery Efforts Regarding Misappropriated Funds
In March  2004,  we learned  that an  employee  may have  engaged in  fraudulent
activity and we hired an outside firm to  investigate  the matter.  The employee
admitted to embezzling  funds from us. It was  determined  that the employee had
been  embezzling  funds from us since 1998  through  2003,  in amounts  totaling
approximately $570,000. The investigation of this matter is complete. Other than
$62,000 in underreported  sales taxes,  the  embezzlement  funds were materially
expensed  in the year such funds were  embezzled  and,  therefore,  had no other
effect on the  restatement  of any  financial  results  in fiscal  2004 or prior
years.  We are in the  process of  securing  certain  assets  belonging  to this
employee,  which, in conjunction with insurance proceeds, should provide us with
recoveries of  approximately  $300,000,  which will be recorded as recoveries in
future periods when they are received. We have incurred a total of approximately
$120,000 to $150,000 of legal and other professional fees related to this matter
through June 2004,  and expect to incur an  additional  amount of  approximately
$5,000 to $10,000  before the matter is resolved.  We have updated our system of
internal controls, as described more fully in Item 9A below, in order to prevent
such occurrences in the future.

Reel.com
On November 15,  2000,  3PF filed a  proceeding  with the  American  Arbitration
Association  against  Reel.com,  Inc.,  a division  of  Hollywood  Entertainment
Corporation (Hollywood), for breach of a servicing, warehousing and distribution
agreement,  and  against  Hollywood  in  connection  with its  guarantee  of the
obligations  of Reel.com,  Inc.,  under the  agreement.  On March 13,  2002,  an
arbitrator  awarded damages to us of approximately  $1.6 million related to this
claim. In April 2002, in a confidential  settlement agreement,  Hollywood agreed
to pay an additional  $362,000 to us to resolve all  outstanding  issues between
the two  parties.  These  amounts  are  reflected  as net gain  from  litigation
settlements in the accompanying consolidated statements of operations.

General
We may, from time to time, be a party to legal proceedings and claims that arise
in the ordinary course of our business. In the opinion of management, the amount
of any  ultimate  liability  with  respect to these  actions is not  expected to
materially affect our financial  condition or results of operations.  Other than
the  vendor  dispute  previously  mentioned,   we  currently  have  no  material
outstanding litigation.

Note 17.  401(k) Plan

We have an employee  benefit  plan  pursuant to Section  401(k) of the  Internal
Revenue Code (the "401(k) Plan") for certain qualified employees.  Contributions
made to the 401(k) Plan are based on  percentages  of employees'  salaries.  The
total amount of our contribution is at the discretion of our Board of Directors.
Contributions  under the 401(k) Plan for the years ended March 31, 2003 and 2002
were approximately $90,000 and $86,000,  respectively.  As of March 31, 2004, we
have accrued $93,000 for anticipated contributions related to fiscal 2004.

Note 18. Business  Segments, Significant  Suppliers, Product  Lines  and   Major
         Customer
Previously,  we classified our services in three segments:  PPT (Entertainment),
3PF (Fulfillment)  and Other.  Other services included amounts received pursuant
to previous  royalty  agreements,  primarily from Rentrak Japan. As of March 31,
2004, we operate in one business segment,  Entertainment (previously referred to
as our PPT segment).

                                       43

<PAGE>

Certain financial data by segment is as follows:

<TABLE>
<CAPTION>

                              Entertain-
                                 ment         Fulfillment       Other           Total
                             ------------    ------------    -----------    ------------
2004
-----------------------------
<S>                          <C>             <C>             <C>            <C>
Sales to external customers  $ 73,508,114    $  4,624,299    $        --    $ 78,132,413
Inter-segment sales                    --         530,144             --         530,144
                             ------------    ------------    -----------    ------------
  Total sales                  73,508,114       5,154,443             --      78,662,557
Depreciation and amortization     875,488              --             --         875,488
Operating income  (loss)        3,059,159      (1,374,538)            --       1,684,621
Total assets                   35,099,308       1,263,931             --      36,363,239

2003 (restated)
---------------------
Sales to external customers  $ 70,618,422    $ 15,265,840    $        --    $ 85,884,262

Inter-segment sales                    --       2,114,704             --       2,114,704
                             ------------    ------------    -----------    ------------
  Total sales                  70,618,422      17,380,544             --      87,998,966
Depreciation and amortization     668,029         687,993             --       1,356,022

Operating income (loss)         2,895,526      (3,274,804)            --        (379,278)
Total assets                   26,563,834       4,924,444             --      31,488,278

2002 (restated)
---------------------
Sales to external customers  $ 74,283,760    $ 15,341,740    $ 6,395,754    $ 96,021,254
Inter-segment sales               218,204       2,180,137             --       2,398,341
                             ------------    ------------    -----------    ------------
  Total sales                  74,501,964      17,521,877      6,395,754      98,419,595
Depreciation and  amortization    497,673         940,776             --       1,438,449
Operating income (loss)         6,378,921      (3,858,411)     5,460,399       7,980,909
Total assets                   30,626,684       5,831,188      3,636,080      40,093,952

</TABLE>

Revenue by service activity was as follows:

                             Year Ended March 31,
                      -------------------------------------
                         2004         2003         2002
                      -----------  -----------  -----------
                                    (restated)   (restated)
Order processing      $ 7,741,213  $14,745,470  $16,893,087
fees
Transaction fees       46,398,031  42,257,672    44,102,210
Sell-through fees      10,308,689    8,558,014    7,324,157
Communication fees      1,126,862    1,185,188    1,136,023
Fulfillment             4,624,299   15,265,840   15,341,740
Other                   7,933,319    3,872,078   11,224,037
                      -----------  -----------  -----------
                      $78,132,413  $85,884,262  $96,021,254
                      ===========  ===========  ===========

During  fiscal 2004,  we had one Program  Supplier  that  supplied  product that
generated 22% of our total revenues,  one that generated 15%, one that generated
13% and one that generated 12%.

During  fiscal 2003,  we had one Program  Supplier  that  supplied  product that
generated 16% of our total  revenues,  two that  generated 15% and a fourth that
generated 11%.

During  fiscal 2002,  we had one Program  Supplier  that  supplied  product that
generated  18% of our total  revenues,  a second that  generated 17% and a third
that generated 14%.

There were no other Program  Suppliers who provided  product that  accounted for
10% or more of our total  revenues for the years ended March 31, 2004,  2003 and
2002.  Although  management  does not believe  that the  relationships  with the
significant program suppliers will be terminated in the near term, a loss of any
one of these suppliers  could have an adverse effect on our financial  condition
and results of operations.

We had one PPT customer  that  accounted  for 17% of our total revenue in fiscal
2004.  The  agreement  with this PPT  customer  expires in September  2004.  One
fulfillment  customer  accounted  for 14% and 11%,  respectively,  of our  total
revenue in fiscal 2003 and 2002.  The agreement with this  fulfillment  customer
expired July 31, 2003.  There were no other  customers that accounted for 10% or
more of our total revenue in fiscal 2004, 2003 and 2002.

                                       44

<PAGE>

                            QUARTERLY FINANCIAL DATA

Unaudited quarterly financial data, as restated,  for each of the eight quarters
in the two-year period ended March 31, 2004 is as follows:

<TABLE>
<CAPTION>
                                         1st  Quarter    2nd Quarter(2)  3rd Quarter(2)  4th Quarter
                                         ------------    ------------    ------------   ------------
2004 (restated)
--------------
<S>                                      <C>             <C>             <C>            <C>
Revenue, as reported                     $ 18,698,424    $ 14,260,883    $ 19,402,730   $ 24,230,449
Adjustment for restatements(1)                215,948         342,849         981,130             --
                                         ------------    ------------    ------------   ------------
Revenue, as restated                       18,914,372      14,603,732      20,383,860     24,230,449
Income (loss) from operations, as reported     46,862      (2,204,623)      1,446,444      2,657,969
Adjustment for restatements(1)                 77,873         202,240        (542,144)            --
                                         ------------    ------------    ------------   ------------
Income (loss) from operations, as restated    124,735      (2,002,383)        904,300      2,657,969
Net income (loss):
  Continuing operations, as reported           59,676      (1,326,602)        921,174      2,053,164
    Adjustment for restatements(1)             70,918        (125,946)       (213,991)            --
                                         ------------    ------------    ------------   ------------
  Continuing operations, as restated          130,594      (1,452,548)        707,183      2,053,164
  Discontinued operations                          --              --        (128,649)            --
                                         ------------    ------------    ------------   ------------
                                         $    130,594    $ (1,452,548)   $    578,534   $  2,053,164
                                         ============    ============    ============   ============
Earnings (loss) per common share:
  Basic:
    Continuing operations, as reported   $       0.01    $      (0.14)   $       0.09   $       0.21
    Adjustment for restatements(1)                 --           (0.01)          (0.02)            --
                                         ------------    ------------    ------------   ------------
    Continuing operations, as restated           0.01           (0.15)           0.07           0.21
    Discontinued operations                        --              --           (0.01)            --
                                         ------------    ------------    ------------   ------------
      Net income (loss), as restated     $       0.01    $      (0.15)   $       0.06   $       0.21
                                         ============    ============    ============   ============
  Diluted:
    Continuing operations, as reported   $       0.01    $      (0.14)   $       0.09   $       0.20
        Adjustment for restatements(1)             --           (0.01)          (0.02)            --
                                         ------------    ------------    ------------   ------------
    Continuing operations, as restated           0.01           (0.15)           0.07           0.20
        Discontinued operations                    --              --           (0.01)            --
                                         ------------    ------------    ------------   ------------
      Net income (loss)                  $       0.01    $      (0.15)   $       0.06   $       0.20
                                         ============    ============    ============   ============
2003 (restated)
Revenue, as reported                     $ 22,427,441    $ 20,774,482    $ 21,279,830   $ 21,738,608
Adjustment for restatements(1)               (217,976)        102,118         (63,686)      (156,555)
                                         ------------    ------------    ------------   ------------
Revenue, as restated                       22,209,465      20,876,600      21,216,144     21,582,053
Income (loss) from operations, as reported    499,221         207,722        (493,931)      (223,381)
Adjustment for restatements(1)               (212,457)        116,828         240,674       (513,954)
                                         ------------    ------------    ------------   ------------
Income (loss) from operations, as restated    286,764         324,550        (253,257)      (737,335)
Net income (loss):
  Continuing operations, as reported          309,517         173,115        (299,195)       (99,189)
  Adjustment for restatements(1)             (131,723)         72,433         149,218       (318,652)
                                         ------------    ------------    ------------   ------------
  Continuing operations, as restated          177,794         245,548        (149,977)      (417,841)
  Discontinued operations                    (145,014)       (276,216)        (75,369)       (86,028)
                                         ------------    ------------    ------------   ------------
                                         $     32,780    $    (30,668)   $   (225,346)  $   (503,869)
                                         ============    ============    ============   ============
Earnings (loss) per common share:
  Basic:
    Continuing operations, as reported   $       0.03    $       0.02    $      (0.03)  $      (0.01)
    Adjustment for restatements(1)              (0.01)           0.01            0.02          (0.03)
                                         ------------    ------------    ------------   ------------
    Continuing operations, as restated           0.02            0.03           (0.01)         (0.04)
    Discontinued operations                     (0.02)          (0.03)          (0.01)         (0.01)
                                         ------------    ------------    ------------   ------------
      Net income (loss)                  $       0.00    $       0.00    $      (0.02)  $      (0.05)
                                         ============    ============    ============   ============
  Diluted:
    Continuing operations, as reported   $       0.03    $       0.02    $      (0.03)  $      (0.01)
    Adjustment for restatements(1)              (0.01)           0.01            0.02          (0.03)
                                         ------------    ------------    ------------   ------------
    Continuing operations, as restated           0.02            0.03           (0.01)         (0.04)
    Discontinued operations                     (0.02)          (0.03)          (0.01)         (0.01)
                                         ------------    ------------    ------------   ------------
      Net income (loss)                  $       0.00    $       0.00    $      (0.02)  $      (0.05)
                                         ============    ============    ============   ============
</TABLE>
                                       45

<PAGE>

1.  See Note 4 of Notes to  Consolidated  Financial  Statements  for a  detailed
    description of the restatements.  In addition, to the restatements discussed
    in Note 4, we also restated the second and third  quarters of fiscal 2004 to
    reflect the  recognition of guarantees  from a customer at  street-date,  in
    accordance with SOP 00-2,  which were previously  recognized over the rental
    period.  This resulted in earlier recognition of revenue and related cost of
    sales. The adjustment for restatements is made up of the following:

<TABLE>
<CAPTION>
                              1st Quarter    2nd Quarter     3rd Quarter     4th Quarter
                             ------------    ------------    ------------   ------------
2004
Revenue adjustment
<S>                          <C>             <C>             <C>            <C>
SOP 00-2 revenue             $    215,948    $    (54,799)   $     23,595   $         --
 recognition adjustment
SOP 00-2 accounting for
 guarantees adjustment                 --         397,648         957,535             --
                             ------------    ------------    ------------   ------------
                             $    215,948    $    342,849    $    981,130   $         --
                             ============    ============    ============   ============
Operating income (loss) adjustment

Adjustment for
 misinterpretation and       $      9,370    $    152,312    $   (737,490)  $         --
 misapplication of contract
 terms
SOP 00-2 revenue                   68,503         (32,090)             97             --
 recognition adjustment
SOP 00-2 accounting for
 guarantees adjustment                 --          82,018         195,249            --
                             ------------    ------------    ------------   ------------
                             $     77,873    $    202,240    $   (542,144)  $         --
                             ============    ============    ============   ============
Net income adjustment
Adjustment for
 misinterpretation and       $      9,370    $    152,312    $   (737,490)  $         --
 misapplication of contract
 terms
SOP 00-2 revenue                   68,503         (32,090)             97             --
 recognition adjustment
SOP 00-2 accounting for
 guarantees adjustment                 --          82,018         195,249             --
Tax effect of adjustments          (6,955)       (328,186)        328,153
                             ------------    ------------    ------------   ------------
                             $     70,918    $   (125,946)   $   (213,991)  $         --
                             ============    ============    ============   ============
2003
Revenue adjustment
SOP 00-2 revenue             $   (217,976)   $    164,226    $    (63,686)  $   (156,555)
recognition adjustment
Underreporting of sales tax            --         (62,108)             --             --
                             ------------    ------------    ------------   ------------
                             $   (217,976)   $    102,118    $    (63,686)  $   (156,555)
                             ============    ============    ============   ============
Operating income (loss)
adjustment
Adjustment for
 misinterpretation and       $   (133,771)   $    116,422    $    258,350   $   (479,775)
 misapplication of contract
 terms
SOP 00-2 revenue                  (78,686)         62,514         (17,676)       (34,180)
 recognition adjustment
Underreporting of sales tax            --         (62,108)             --             --
                             ------------    ------------    ------------   ------------
                             $   (212,457)   $    116,828    $    240,674   $   (513,955)
                             ============    ============    ============   ============
Net income adjustment
Adjustment for
misinterpretation and        $   (133,771)   $    116,422    $    258,350   $   (479,775)
misapplication of contract
terms
SOP 00-2 revenue                  (78,686)         62,514         (17,676)       (34,180)
recognition adjustment
Underreporting of sales tax            --         (62,108)             --             --
Tax effect of adjustments          80,734         (44,395)        (91,456)       195,303
                             ------------    ------------    ------------   ------------
                             $   (131,723)   $     72,433    $    149,218   $   (318,652)
                             ============    ============    ============   ============
</TABLE>

2.  Income from  operations  and net income in the second quarter of fiscal 2004
    include a $1.3 million charge for the estimated  cost for early  termination
    of a lease  related to our 3PF  business.  Income  from  operations  and net
    income in the third quarter of fiscal 2004 include a $650,000 credit related
    to the reversal of a portion of the $1.3  million  charge as the final early
    termination charge was $650,000.

                                       46

<PAGE>


                               Rentrak Corporation
                        Valuation and Qualifying Accounts
                                   Schedule II

<TABLE>
<CAPTION>

                                                       Write-Offs
                         Balance at     Additions       Charged                       Balance
                         Beginning    (Reductions)      Against                      at End of
                         of Period     to Reserve       Reserves       Recoveries     Period
                        -----------   ------------    ------------    -----------   -----------
Allowance for doubtful
accounts:
<S>      <C>            <C>           <C>             <C>             <C>           <C>
  Fiscal 2002           $ 2,090,075   $ (1,546,301)   $ (1,598,046)   $ 2,140,415   $ 1,086,143
  Fiscal 2003             1,086,143     (1,142,138)       (447,732)     1,251,866       748,139
  Fiscal 2004               748,139       (319,676)         (9,825)       420,484       839,122

Advances to and
guarantees with
Program Suppliers
reserve (restated)
  Fiscal 2002           $ 2,438,260   $  2,427,928    $ (1,792,316)   $   (26,654)  $ 3,047,218
  Fiscal 2003             3,047,218      2,749,841      (2,042,146)       (41,060)    3,713,853
  Fiscal 2004             3,713,853      2,059,159      (1,214,640)       (37,613)    4,520,759

Other current assets -
retailer financing
program reserve
  Fiscal 2002           $   838,435   $         --    $         --    $        --   $   838,435
  Fiscal 2003               838,435             --              --             --       838,435
  Fiscal 2004               838,435             --              --             --       838,435

Other assets -
retailer financing
program reserve
  Fiscal 2002           $ 5,760,079   $     50,000    $    (72,760)   $        --   $ 5,737,319
  Fiscal 2003             5,737,319             --         (45,000)            --     5,692,319
  Fiscal 2004             5,692,319             --         (31,422)            --     5,660,897

</TABLE>

                                       47

<PAGE>

ITEM 9A.  CONTROLS AND PROCEDURES

Disclosure Controls and Procedures
Our management has evaluated,  under the supervision and with the  participation
of our Chief Executive Officer and Chief Financial Officer, the effectiveness of
our  disclosure  controls and  procedures as of the end of the period covered by
this report  pursuant to Rule  13a-15(b)  under the  Securities  Exchange Act of
1934,  as amended  (Exchange  Act).  During the period  covered by this  report,
management  identified internal control  deficiencies,  as described below, that
constitute material weaknesses as defined in Statement of Auditing Standards No.
60.  Certain  of  these  internal   control   weaknesses  may  also   constitute
deficiencies in our disclosure controls and procedures. Based on that evaluation
and taking into consideration those identified deficiencies, our Chief Executive
Officer and our Chief  Financial  Officer have concluded  that, as of the end of
the period covered by this report,  our disclosure  controls and procedures were
ineffective  in  ensuring  that  information  required  to be  disclosed  in our
Exchange Act reports is (1) recorded,  processed,  summarized  and reported in a
timely manner, and (2) accumulated and communicated to our management, including
our Chief Executive Officer and our Chief Financial Officer, as appropriate,  to
allow timely decisions regarding required disclosure.

Management's  conclusion  that  our  disclosure  controls  and  procedures  were
ineffective  as of the end of the period  covered by this report is based on our
discovery  of  deficiencies  in certain of our  internal  controls  necessary to
development of reliable financial  statements.  Some of these weaknesses related
to the discovery  that one of our  employees had embezzled  funds from us over a
period of  several  years by  exploiting  weaknesses  in our  internal  controls
related to the  segregation  of duties  within the  accounting  function.  Other
weaknesses  related to the  discovery  of  accounting  errors as a result of the
misinterpretation and misapplication by our internal accounting staff of certain
terms in our revenue  sharing  agreements  with program  suppliers.  Our outside
auditor also  advised us of certain  organizational  and  resource  deficiencies
related  to  our  processes  for  monitoring,  analyzing  and  reporting  on new
accounting and reporting  pronouncements,  including our process for summarizing
and externally reporting financial information. These deficiencies are discussed
in more detail below, together with a description of the changes in our internal
control over financial  reporting  which we began  implementing  during our last
fiscal quarter and that have materially  affected,  or are reasonably  likely to
materially affect, our internal control over financial reporting.

We  have  reviewed  the  procedures  and  internal   controls   surrounding  the
deficiencies   described   above  and  have  taken  actions  and  commenced  the
implementation  of improvements as of the date of the filing of this report,  as
described below, to provide  reasonable  assurance that those  deficiencies will
not recur.  Based on the actions we have taken, our Chief Executive  Officer and
Chief Financial  Officer have concluded that this report fully complies with the
requirements  of  Section  13(a) of the  Exchange  Act and that the  information
contained  in  this  report  fairly  presents,  in all  material  respects,  our
financial condition and results of operations.


Internal Control Over Financial Reporting

Investigation and Recovery Efforts Regarding Misappropriated Funds

In March  2004,  we learned  that an  employee  may have  engaged in  fraudulent
activity and we hired an outside firm to  investigate  the matter.  The employee
admitted to embezzling  funds from us. It was  determined  that the employee had
been  embezzling  funds from us since 1998  through  2003,  in amounts  totaling
approximately $570,000. The investigation of this matter is complete. Other than
$62,000 in underreported  sales taxes,  the  embezzlement  funds were materially
expensed  in the year such funds were  embezzled  and,  therefore,  had no other
effect on the  restatement  of any  financial  results  in fiscal  2004 or prior
years.  We are in the  process of  securing  certain  assets  belonging  to this
employee,  which, in conjunction with insurance proceeds, should provide us with
recoveries of  approximately  $300,000,  which

                                       48

<PAGE>

will be recorded as recoveries in future periods when they are received. We have
incurred  a total of  approximately  $120,000  to  $150,000  of legal  and other
professional  fees related to this matter through June 2004, and expect to incur
an additional  amount of  approximately  $5,000 to $10,000  before the matter is
resolved.

We have  reviewed the internal  controls,  including the  accounting,  financial
reporting  and  disclosure  controls   surrounding  this  fraud  and  have  made
improvements  to such  controls to help ensure  against this type of activity in
the future.  Management  has recently  hired a new  controller who will lead our
efforts to improve our overall internal accounting controls.  In particular,  we
have  implemented,  or  are  in  the  process  of  implementing,  the  following
additional procedures and controls with respect to this embezzlement matter:

      o   All checks, upon receipt, are restrictively endorsed.
      o   No employee,  beyond the person(s) assigned to open and distribute the
          mail, is authorized to handle the mail in any manner.
      o   Only copies of checks are distributed for account coding.
      o   The income  tax  receivable  account  will be  reconciled  so that the
          receivable and payable for each tax jurisdiction can be tracked.
      o   A miscellaneous  cash receipts log has been established with copies of
          supporting documentation. The cash receipt transactions are reconciled
          to the bank statements during the bank reconciliation process by staff
          independent of the cash receipts function.
      o   Segregation  of duties within Finance and Accounting has been reviewed
          and necessary  adjustments have been made, given our staffing size and
          composition.
      o   All bank statements  will be given to the Chief  Financial  Officer or
          Controller, who will independently review the information prior to its
          use by appropriate accounting staff.
      o   All  bank  reconciliations  will  be  reviewed  monthly  by the  Chief
          Financial Officer or Controller and evidenced in writing.
      o   All prepared  journal entries will be reviewed by the Controller prior
          to entry in the accounting system.

Misinterpretation  and  Misapplication  of  Certain  Terms  in  Revenue  Sharing
Agreements with Program Suppliers

In May and June 2004, we discovered  errors in our accounting as a result of the
misinterpretation  and  misapplication  of certain  terms in some of our revenue
sharing  agreements  with  Program  Suppliers.  These  errors  resulted  in  the
restatement  of our  previously  issued  financial  statements  for fiscal  2000
through fiscal 2003. See Note 4 of Notes to  Consolidated  Financial  Statements
for a detailed description of the restatements.

We have  implemented,  or are in the  process  of  implementing,  the  following
additional  procedures  and controls to date with  respect to these  restatement
matters:  o All  revenue-sharing  agreement Program Supplier contract  liability
accounts will be comprehensively analyzed and reconciled on a monthly basis. The
analyses and  reconciliations  will be reviewed  and approved by the  Controller
and/or Chief Financial Officer,  and evidenced in writing. o All revenue-sharing
agreement  Program  Supplier  guarantees will be  comprehensively  analyzed on a
monthly  basis.  The analyses  will be reviewed  and approved by the  Controller
and/or Chief Financial Officer, and evidenced in writing.

Organizational Deficiencies Related to the External Financial Reporting Process

Certain organizational and resource deficiencies have been identified related to
our processes for  monitoring,  analyzing  and reporting on new  accounting  and
reporting pronouncements. This includes our process for summarizing and external
reporting of financial information.

                                       49
<PAGE>

We have  implemented,  or are in the  process  of  implementing,  the  following
procedures  and  controls  with  respect to this  matter:

      o   We have  hired a new  controller  with  assigned  responsibilities  to
          include:   (i)  the  on-going  research  and   identification  of  new
          accounting  and  reporting  pronouncements;   and  (ii)  the  on-going
          research  and  identification  of  our  external  financial  reporting
          responsibilities  to assure our compliance with all  professional  and
          regulatory reporting and disclosure requirements.
      o   Once  identified,  we will assess and evaluate the  application of all
          new  pronouncements  in a timely  manner  and  determine  the  correct
          accounting  and  reporting   treatment.   We  will  also  provide  our
          independent  auditors the conclusions of our assessment and evaluation
          of these pronouncements when complete.
      o   We are implementing a process to ensure that we research, identify and
          apply  all  external  reporting  and  disclosure  requirements  in our
          external financial reporting.

Summary

Our independent  auditors  advised the audit committee of our board of directors
that these internal control  deficiencies  described above  constitute  material
weaknesses  as defined in Statement  of Auditing  Standards  No. 60.  Certain of
these internal control weaknesses may constitute  deficiencies in our disclosure
controls and procedures.

Other than as discussed in the preceding paragraphs,  there have been no changes
in our internal  control over financial  reporting that occurred during our last
fiscal  quarter  that  has  materially  affected  or  is  reasonably  likely  to
materially affect our internal control over financial reporting.







                                       50

<PAGE>


                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

Financial Statements and Schedules

The Consolidated  Financial Statements,  together with the report thereon of our
independent auditors, are included on the pages indicated below:

                                                                        Page
                                                                        ----

   Report of Independent Registered Public Accounting Firm                21

   Consolidated Balance Sheets as of March 31, 2004 and 2003              22

   Consolidated Statements of Operations for the years ended
   March 31, 2004, 2003 and 2002                                          23

   Consolidated Statements of Stockholders' Equity for the years
   ended March 31, 2004, 2003 and 2002                                    24

   Consolidated Statements of Cash Flows for the years ended
   March 31, 2004, 2003 and 2002                                          25

   Notes to Consolidated Financial Statements                             26


The following schedule is filed herewith:
                                                                         Page
                                                                         ----
   Schedule II    Valuation and Qualifying Accounts                       47

Schedules not included have been omitted  because they are not applicable or the
required information is shown in the financial statements or notes thereto.

Exhibits

The exhibits  required to be filed  pursuant to Item 601 of  Regulation  S-K are
listed in the Exhibit  Index,  which  immediately  follows the signature page of
this report.

Reports on Form 8-K

None.

                                       51
<PAGE>


SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant has duly caused this Amendment No. 1 to its annual
report on Form 10-K/A to be signed on its behalf by the  undersigned,  thereunto
duly authorized.

Date: December 15, 2004        RENTRAK CORPORATION


                               By:/S/ F. Kim Cox
                                  ----------------------------------------------
                               F. Kim Cox
                               President

                               By:/s/ Mark L. Thoenes
                                  ----------------------------------------------
                               Mark L. Thoenes
                               Senior Vice President and Chief Financial Officer
                               (Principal Financial and Accounting Officer)




                                       52

<PAGE>



                                  EXHIBIT INDEX
The following exhibits are filed herewith or, if followed by a number in
parentheses, are incorporated herein by reference from the corresponding exhibit
filed in the  report  or  registration  statement  identified  in the  footnotes
following this index:

 Exhibit
  Number   Exhibit Description
    3.1    Amended and  Restated  Articles of  Incorporation  and  amendments
           thereto. (1)
    3.2    1995 Restated Bylaws, as amended to date. (2)
   10.1*   1986 Second  Amended and  Restated  Stock Option Plan and Forms of
           Stock Option Agreements. (3)
   10.2*   Amendment to 1986 Second  Amended and  Restated  Stock Option Plan
           dated May 19, 2000. (4)
   10.3*   Employment  Agreement  with  Christopher E. Roberts dated November
           1, 2002. (8)**
   10.4*   The 1997  Equity  Participation  Plan of Rentrak  Corporation,  as
           amended. (9)
   10.5*   Form of  Non-Qualified  Stock Option  Agreement  under 1997 Equity
           Participation Plan. (10)
   10.6*   Form  of  Incentive  Stock  Option  Agreement  under  1997  Equity
           Participation Plan. (11)
   10.7    Revolving  Line of Credit  Agreement  with Wells  Fargo Bank dated
           June 15, 2002. (12)
   10.8    Amendment, dated June 16, 2003, to Revolving Line of Credit
           Agreement with Wells Fargo Bank, dated June 15, 2002. (13)
   10.9*   Employment Agreement with Mark L.  Thoenes dated January 1,  2001.
           (14)
   10.10*  Employment  Agreement  with  Timothy J. Erwin  dated  November  1,
           2002. (15)**
   10.11   Rights  Agreement  dated  as  of  May 18,  1995,  between  Rentrak
           Corporation and U.S. Stock Transfer Corporation. (16)
   10.12*  Incentive  Stock Option  Agreement  with Paul A.  Rosenbaum  dated
           March 30, 2001. (17)
   10.13*  Non-Qualified Stock Option Agreement with Paul A.  Rosenbaum dated
           March 30, 2001. (18)
   10.14*  Employment Agreement with Amir Yazdani dated July 1, 2001. (19)
   10.15*  Employment  Agreement  with  Paul A.  Rosenbaum  dated  October 1,
           2001. (20)
   10.16*  The  1997  Non-Officer  Employee  Stock  Option  Plan  of  Rentrak
           Corporation.  (21)
   10.17*  Amendment to the 1997  Non-Officer  Employee  Stock Option Plan of
           Rentrak Corporation. (22)
   10.18*  Second  Amendment to the 1997  Non-Officer  Employee  Stock Option
           Plan of Rentrak Corporation. (23)
   10.19*  Third  Amendment  to the 1997  Non-Officer  Employee  Stock Option
           Plan of Rentrak Corporation. (24)
   10.20*  Letter   Agreement   between   Rentrak   Corporation   and  Disney
           Enterprises, Inc., dated November 15, 2002. (25)
   10.21*  Employment Agreement with Ronald Giambra dated July 1, 2002. (26)
   10.22*  Amendment, dated June 1, 2003, to Employment Agreement dated July
           1, 2002, between Ronald Giambra and Rentrak Corporation. (28)
   10.23*  Employment  Agreement  between F. Kim Cox and Rentrak  Corporation
           dated April 1, 2004. (29)
   10.24*  Employment  Agreement  between  Kenneth  M.  Papagan  and  Rentrak
           Corporation dated January 1, 2004. (30)
   10.25*  Employment  Agreement between Cathy Hetzel and Rentrak Corporation
           dated March 17, 2004. (31)
   21      List of Subsidiaries of Registrant. (32)
   23      Consent  of KPMG LLP,  independent  registered  public  accounting
           firm.
   31.1    Certification   of  Chief  Executive   Officer   pursuant  to  Rule
           13a-14(a).
   31.2    Certification   of  Chief  Financial   Officer   pursuant  to  Rule
           13a-14(a).
   32.1    Certification  of Chief  Executive  Officer  pursuant to 18 U.S.C.
           Section 1350.
   32.2    Certification  of Chief  Financial  Officer  pursuant to 18 U.S.C.
           Section 1350.
   99.1    Description of Capital Stock of Rentrak Corporation. (27)


<PAGE>


*  Management Contract or Compensatory Plan or Arrangement.
** Portions omitted pursuant to a request for confidentiality treatment filed
   with the Securities and Exchange Commission.

    1.  Filed in Form S-3 Registration Statement, File No. 33-8511, filed on
        November 21, 1994.
    2.  Filed as Exhibit 3.1 to Form 10-Q filed on February 14, 2001.
    3.  Filed as Exhibit 10.1 to 1993 Form 10-K filed on June 28, 1993
        (File No. 0-15159).
    4.  Filed as Exhibit 10.30 to 2000 Form 10-K filed on June 29, 2000.
    8.  Filed as Exhibit 10.4 to Form 10-Q filed on February 14, 2003.
    9.  Filed as Exhibit 10.10 to 2002 Form 10-K filed on June 28, 2002.
   10.  Filed as Exhibit 10.8 to 2003 Form 10-K filed on June 26, 2003.
   11.  Filed as Exhibit 10.9 to 2003 Form 10-K filed on June 26, 2003.
   12.  Filed as Exhibit 10.1 to Form 10-Q filed on February 14, 2003.
   13.  Filed as Exhibit 10.2 to Form 10-Q filed on August 13, 2003.
   14.  Filed as Exhibit 10.25 to 2001 Form 10-K filed on June 29, 2001.
   15.  Filed as Exhibit 10.3 to Form 10-Q filed on February 14, 2003.
   16.  Filed as Exhibit 4 to Form 8-K filed on June 5, 1995.
   17.  Filed as Exhibit 10.30 to 2001 Form 10-K filed on June 29, 2001.
   18.  Filed as Exhibit 10.31 to 2001 Form 10-K filed on June 29, 2001.
   19.  Filed as Exhibit 10.1 to Form 10-Q filed on November 13, 2001.
   20.  Filed as Exhibit 10.1 to Form 10-Q filed on February 14, 2002.
   21.  Filed as Exhibit 4.1 to Form S-8 filed on June 5, 1997.
   22.  Filed as Exhibit 4.1 to Form S-8 filed on October 29, 1997.
   23.  Filed as Exhibit 10.31 to 2002 From 10-K filed on June 28, 2002.
   24.  Filed as Exhibit 10.1 to Form 10-Q filed on November 13, 2002.
   25.  Filed as Exhibit 99 to Form 8-K filed on November 18, 2002.
   26.  Filed as Exhibit 10.5 to Form 10-Q filed on February 14, 2003.
   27.  Filed as Exhibit 99 to 2001 Form 10-K filed on June 29, 2001.
   28.  Filed as Exhibit 10.26 to 2004 Form 10-K filed on July 14, 2004
   29.  Filed as Exhibit 10.27 to 2004 Form 10-K filed on July 14, 2004
   30.  Filed as Exhibit 10.28 to 2004 Form 10-K filed on July 14, 2004
   31.  Filed as Exhibit 10.29 to 2004 Form 10-K filed on July 14, 2004
   32.  Filed as Exhibit 21 to 2004 Form 10-K filed on July 14, 2004