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Business in Silicon Valley generally tends to be done quickly.   There’s a tendency to jump into things head first, even sometimes blindfolded.  It’s the nature of high tech and the entrepreneurial culture.

In Hollywood business tends to be done more slowly.  There’s lunch before dinner, coffee before dessert.  The process involves more relationship building.  It’s a tendency to move moderately. To make changes judiciously.  It’s a process of testing the waters, sticking a toe in, then a foot, before jumping ahead.  Major media, as the occasional joke goes, likes a lot of foreplay, it likes to date for a good while before getting intimate. 

Apple has been a patient suitor, and the rewards are starting to show. Yesterday, Apple  and MGM announced that films from the Metro-Goldwyn-Mayer library, which includes the Rocky franchise and a wide range of generation spanning classics, will be available on iTunes.

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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 Movietickets.com 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).

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Seattle based Getty Images continues to pursue an aggressive expansion model by means of acquisition.

Today, in its second acquisition of the year, Getty Images announced that it was acquiring Ireland-based Pixel Graphics holdings for $135m in cash.

Pixel Graphics Holdings is the parent company to Stockbyte and Stockdisk, two royalty-free content providers. The transition will be an easy one: most of Stockbyte’s image collection was already distributed through Getty, and the remainder of its catalog will follow shortly.

Speaking of the transaction, Jonathan Klein, Getty Images’ co-founder and Chief Executive Officer said: “Worldwide demand for imagery continues to grow as our customers increasingly explore new, image-rich communication platforms as a means to break through the clutter. The acquisition is in line with our strategy of acquiring and producing increased amounts of relevant wholly-owned imagery."

The wholly-owned royalty-free content available through Stockbyte is a significant departure from the user-owned royalty-free content delivered through Getty’s other image service: istockphoto.

There is no question, Getty is busy. In addition to this transaction, earlier this year Getty acquired the parent company of Wireimage, which owned the largest celebrity photo and video archive. In March, it also, signed a partnership deal to license and distribute photos and video footage from Warner Brothers Entertainment’s archives. I wonder what is next on the shopping list.

Auctions can be efficient, but they don’t work for everything.  Especially if the sellers see value for themselves in the inefficiency.    That was the message today delivered to eBay from a group of Cable TV networks. 

Discovery Channel, ESPN, Lifetime,  A&E and other national cable television channels announced that they would not participate in an eBay test product to sell advertising slots by auction. 

eBay apparently learned it was being dumped via a press release, the corporate equivalent of a “Dear John” text message.   Sean Cunningham, chief executive of the Cable TV Advertising Bureau (the trade group which was representing the networks), offered little sentimentality in his words.  He said “we were underwhelmed by what we saw on the system and underwhelmed by eBay’s knowledge of our business.”  He further added “We don’t believe that eBay is going to get this right.”

eBay had been working with a group of large advertisers since last year to build the advertising exchange.  Members of the group included HP, Home Depot, Philips Electronics and Toyota. They had pledged to spend $50m of their advertising budgets through the exchange over the next year.

The automated nature of the eBay exchange was criticized, in part, for removing some of the human element from the media buys. Mr. Cunningham said it "lacked the provisions necessary for capturing critical strategy and idea-driven intelligence during a buy." Click to Read More

8 Years ago, Best Buy took a Henry Ford like stance on the colors of Apple Macintosh computers being sold in their stores – they told Apple that Best Buy customer’s could have any color Mac they wanted as long as the color was black (Actually, it wasn’t that strict, and Mac’s didn’t come in black anyway….but Best Buy did take a stand and tell Apple that they would only carry popular colors in inventory.  The company wasn’t willing to carry the inventory, or waste shelf space, on colors that weren’t selling for a product, that no matter how superior in design, wasn’t selling that well either.) 

Apple, at the time, was invested heavily in marketing and brand building efforts that focused on the 5 “flavors” of Macs: Strawberry, Tangerine, Lime, Grape and Blueberry.  The two companies took an all or nothing approach to the negotiation.  It ended up being nothing.  April 1999, Best Buy removed Apple computers from its shelves.   

Now 8 years later, in demonstration of Apple’s increasing clout, and testament to Apple’s iPod and iTunes generated relevance and resurgence (and the success of Apple’s 170 retail stores),  Best Buy is again making room on its shelves for the full Apple Computer product line.

Best Buy said Wednesday that it will create store displays and carry the full Apple line-up (iMac, Mac Pro, Mac Mini and Macbooks) in at least 200 of its stores Click to Read More

I got a panicked phone call from my mother.   “Outlook won’t open.  It’s f*&*#$.  I think all my emails are lost.”

I asked what she was doing when it failed.  Nothing, she said, the problem started as soon as she turned on the computer but it was working fine yesterday.  I had her reboot, run through virus checks; everything I could think of.  Nothing worked.

When I got the computer I found the problem in the error logs: Virus Software.  No, not a virus, I mean – the Virus Protection Software itself was the problem.   The new computer came preinstalled with free trials of MacAfee’s everything-including-the-kitchen-sink security software.  What it didn’t come with was clear notice about what happens if you don’t purchase the software, or uninstall it, before it lapses.

The day that Outlook died, or seemed to, was the day all the free trials lapsed.  The anti-virus component had been paid for; the others were overlooked and ignored.  They didn’t like the lack of attention.  The anti-spam component (I believe) had a bond with Outlook and hung on like a jaded ex-lover.  Outlook tried to function but it was smothered by the anti-spam piece.

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Rumors were swirling that there was about to be a new British invasion, that the Beatles were coming to iTunes.  Instead, at yesterdays much hyped Apple press conference in London new ground was broken in a different direction.  Apple announced that in partnership with label EMI, for the first time, there will be DRM-Free music at the iTunes store.

As part of a deal, the digital catalog of EMI music will be sold in two forms:

• The standard DRM-laden 128kbps AAC file that’s defined iTunes will remain at .99 cents.
• An alternate, higher sound quality (256kbps AAC) download free of any DRM restrictions will be sold at a premium price of $1.29/song

After initially selling through Apple, EMI plans to offer similar rights-free music (and video) through other outlets.  Retailers who participate will be able to choose several levels of quality (including options which may exceed the iTunes peak of 256kbsp). Retailers will also be able to choose between offering the music in MP3, AAC or WMA formats.  

The combined effort will increase the portability of music across different platforms and may influence the market opportunity for smaller player manufacturers.

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