A spokesperson from Hollywood Media responded to the points made in The Bear Case On Hollywood Media. Here is the unedited response:
From 30,000 feet: the reported results of Broadway.com do not support the conclusion of the writer. As reported in our Q2-05 financial release, revenues were up double digits in Q2-05 as compared with Q2-04 in our Broadway Ticketing division, driven mainly by huge sales increases on Broadway.com. We also recently became the exclusive provider of Broadway tickets to the NY Times web site.
There are several reasons for our growth. Here are some:
1. We acquire ticketing inventory in advance unlike Ticketmaster so the quality of our inventory generally is better as it gets closer to the applicable performance date and tickets become very hard for customers to get.
2. We have "exclusive" content on our Broadway.com site. It does not come from Ticketmaster or Telecharge (the writer is incorrect on that point).
3. We continue to take market share because customers view the combination of our reasonable pricing and deep ticketing availability as well as our
experienced customer service personnel as superior to those that we are taking share from.
4. We focus on a demographic of buyer that is more interested in seat and show quality than price.
5. In terms of schedules, pricing, etc - we obviously all have the same information, but nothing is shared. Our editorial (content) is completely
6. Our revenues do include face value of the ticket (per GAAP as we own the tickets we sell).
7. We have our own ticketing system and our transaction flow is in our view much more intelligent than Ticketmaster and Telecharge. 8. We're also, in
our view, more. advantageous to the customer, since we have no reason to point them to see shows based on who owns the house, rather what is good for the customer. Ticketmaster has relationships with certain theaters and sells tickets only to those theaters, Telecharge likewise has deals with certain theaters. We deal with ALL theaters and give advice to customers on what shows are best regardless of the theater.
8. In regards to service fees: Ticketmaster charges both a flat service fee and a order fee. We charge a percentage as a service fee. Customers decide based on the value proposition and where they can find the tickets they want where to buy their tickets. Some will go with ticketmaster and some with us based on a combination of availability of tickets and pricing. The market we are in is less interested in a bargain and more interested in great shows, great seats and great customer service, and thus we are growing our market share. Also, we don't discount tickets or service fees-- don't need to.
9. We head up a marketing coop in which the members include many of the leading shows on Broadway.
On Google Ad Sense and how it fits in with our advertising strategy:
First, we cannot discuss the terms of any agreements we may have with Google.
Second, just last week, we launched a whole new Hollywood.com site.
We feel the new site speaks for itself and interested parties should use it and determine for themselves how it compares to the old Hollywood.com site and the competition. We will give an update to investors on our next earnings call on ad sales in Q3-05 vs Q3-04.
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