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Comcast buys Fandango

Today, Comcast announced it had reached an agreement to acquire movie-ticketing site Fandango. While the deal size was not deemed "material" relative to Comcast’s financial’s and therefore doesn’t require disclosure, it’s likely the purchase prices falls in or near the range of $165m to $180m. That price is estimated based in part on estimated fees from usage (with unique usage numbers used as reported by Comscore) and in part, relative to the multiples (relative to estimated revenue and usage) applied to eBay’s purchase of concert and sports event ticket-seller Stubhub. ( Stubhub sold for $310m earlier this year).

More specifically, the estimated price uses calculations that try to consider i. an estimated closing rate (e.g. what percentage of unique customers complete transactions versus those at the site to just browse concert ticket prices (at Stubhub) or check movie times (at Fandango); ii. recognition that Stubhub sells concert and event tickets for prices of 5x to 10x typical movie tickets and that generates substantially higher fees per transaction than the $1/ticket service fee at Fandango; and iii. that Stubhubs smaller monthly visitor number decreases their share of ad revenue and total transaction volume.

Fandango, which was founded in 2000 by a consortium of movie distributors and investors, sells tickets for more than 1,300 Theaters. Over the past year, Fandango has been fighting with for the title of being the most-visited online movie-ticket seller (AOL’s Moviefone which does provide links for ticket sales has far greater usage numbers but is not included in the category). In December ‘06, Fandango had approximately 5.8m unique visitors. In February, a slightly slower month in the cyclical movie industry, Fandango had 3.8m unique visitors who generated approximately 39m page views (according to Comscore statistics).

(Note traffic stats comparing Fandango and are a little misleading because the companies have relationships with different theater chains Regal (Edwards, UA), Century, Captain Blood’s, and Laemmele work with Fandango. AMC, Krikorian, Pacific, Mann, and Landmark are represented by

Fandango will join Comcast Interactive Media’s growing list of Internet properties which include user-generated video site Ziddio (in Beta) and FearNet, a site focused on the interests of horror movie fans. Comcast, which has more than 11.5m broadband Internet customers and 24m cable-tv subscribers, is already a top-ten Internet destination based on traffic reports (they are estimated to generate more than 2.5b page views per month).

In the announcement, Fandango and Comcast also announced a plan for a summer launch of a new site to be called Descriptions characterize Fancast as a hybrid between a Search and Summary site (e.g./TV Guide style listing service) and a video portal (IPTV/User Generated Content) where users can "view [their favorite shows] via television, video-on-demand, online or other devices." Based on those descriptions is probably that Ziddio and its content will also be incorporated into the site in an effort to simultaneous leverage Comcast’s audience and infrastructure to compete with sites like YouTube and video startups like Veoh, Joost and others.

It’s unlikely there will be any FTC or regulatory oversight to hold up the closing. This deal will probably close within a few weeks.

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