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Entertainment, like every other facet of American life, is quantified and benchmarked.

And the process of measuring performance is a profitable business. When a studio needs to calculate its weekend box office gross or project how a movie will do on its opening night, it can rely on Portland, Ore.-based Rentrak ( RENT) to crunch the numbers.

Rentrak was founded in 1977 as a video-distribution company, but back then it went by the name National Video. It started by selling video-store franchises and established a revenue sharing and distribution system that it called Pay-Per-Transaction. The model gained acceptance among studios, and Rentrak went public in 1988. Today, it gathers data on everything from on-demand video to mobile devices.

The company's fiscal fourth-quarter results demonstrated improved pricing power. Although revenue was flat compared with the year-earlier period, net income increased 33% to $2.3 million and earnings per share improved 40% to 21 cents, helped by a lower share count. Rentrak boosted its net margin from 8% to 10%, proving that a niche focus can trump recessionary pressure.

Rentrak's balance sheet inspires confidence. Over $35 million of cash reserves and zero debt reflect management's adherence to prudent growth and excess liquidity. The company had around $1 million in long-term debt obligations in the prior year's quarter, which it has paid off.

Investors have recognized the company's financial strength and growth prospects. Its stock has surged 52% in 2009 and is now trading at a premium to the market. A price-to-earnings ratio of 37 makes Rentrak 25% more expensive than its average peer in the movie and entertainment industry. On the other hand, the high multiple indicates investors' optimism about future performance.

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