TV Guide Inc., the parent company of Television Games Network (TVG), reported net income of $4,651,000 during fiscal year 1999, which ended on December 31.

The profit figure was significantly lower than 1998, when the company recorded net income of $102-million, but was achieved despite On-Demand Technologies, the company that produces TVG, recording an operating loss of $34.9-million last year.

Operating expenses for TVG Guide Inc. rose from $513.3-million to $1.05-billion in 1999, which company officials said was due, in part, to "costs associated with the development of various TV Guide Entertainment Group products and the TVG Network."

TVG is currently available in about 4.5-million households, according to TV Guide's annual report, through cable and satellite distribution. The network currently accepts account wagering subscribers in Kentucky, Maryland, and Oregon.

"With increased distribution and expansion of the markets from which accounts are accepted," the report states, "TVG Network believes that increased fee revenue, network advertising, merchandising and data delivery, home shopping, e-commerce, and interactive advertising opportunities may become available."

Yet at the same time, TV Guide warned in its annual report filed with the Securities and Exchange Commission that TVG faces a tough battle to become profitable.

"Certain existing industry participants have developed and launched networks which may or may not be within the scope of TVG Network contracts or patent technology. TVG Network may face increased competition and may not achieve a profitable level of operations in the foreseeable future," the report said.