Three merger and acquistions worth noting made headlines recently. With sequential announcements, Rentrak acquired Hollywood Software (owner of the digicine.com domain used as the namespace in Interop distributions), followed by the announcement that Rentrak itself would be acquired by comScore. In a similar timeframe, Fandango acquired competitors Rotten Tomatoes and Flixster, and OTT and mobile content delivery platform M-GO. Preceding this flurry of M&A was the Rizvi Traverse Management announcement to acquire RealD.
Hollywood Software, originally founded in the days of the Y2K threat to license better film booking software to studios, was first acquired by Access IT (now Cinedigm) in 2003 to build out its VPF management solutions. Hollywood Software was sold by Cinedigm in 2014 to a private group of investors that included one of its original founders, Dave Gajda. It acquired Digicine last year, a maker of digital cinema servers with roots in Avica, one of the first digital cinema server companies. HS is well known for its film booking software for studios and its TMS for exhibition, but it also operates Royalty Transaction Service managing rights licensing and royalties for content. All of this is complementary and expansive to Rentrak’s film and video media measurement services, which in turn are complementary to the web and video media measurement services of new owner comScore, based in The Netherlands.
Rotten Tomatoes, a name that would seem to encourage abusive behavior towards cinema screens, is a popular social network site for film commentary, and somewhat competitive with Fandango’s social site for film commentary. Rotten Tomatoes was acquired by Flixster in 2010. Warner Bros. Home Entertainment acquired Flixster and Rotten Tomatoes in 2011, with the objective of growing digital content ownership. Warner maintained a small interest after the sale to Fandango. Fandango, which operates a web site for online cinema ticket sales and social network for film commentary, was acquired by Comcast in 2007, and is now part of NBCUniversal. Adding to Fandango’s recent activity was its acquisition of M-GO, a joint venture of Technicolor and Dreamworks Animation, which delivers content to OTT and mobile platforms. Plans have been announced to bundle theatrical tickets with home releases.
One of the more interesting acquisitions is that of RealD by private equity firm Rizvi Traverse, an investor in high profile brands including SpaceX, Twitter, Square, Snapchat, and Playboy. As a stock that collects royalties off of 3D ticket sales in cinemas, RealD would seem to fit in Rizvi’s investment profile. But as a technology company whose growth opportunities are limited, one wonders where Rizvi intends to take the company. RealD’s contracts with US cinema giants AMC, Cinemark, and Regal are up for renewal in 2018. Going private is a solid move for RealD, whose stock would simply be trashed if and when the company is pushed into reduced value contracts with exhibitors. But RealD hasn’t provided any tips as to how it intends to grow. A clear winner will be chairman and CEO Michael Lewis, who will keep his titles and $1M annual base salary plus annual target bonus of 120%, and a $6M revolving loan in return for rolling over $59M of stock into the purchase.