The Hollywood Media Bear Case Revisited (HOLL)

After publication of The Bear Case on Hollywood Media (HOLL) and Hollywood Media's response, here's a detailed follow-up from the author of the original piece -- an anonymous industry insider directly involved in the online ticketing business. He writes:

• An analysis by Natexis Bleichroeder quoted on your blog assigns approximately 40% (113/273) of HOLL´s total value to Broadway.com. That's what got me thinking.
• Ticketmaster.com tells you the exact seats (area, row, number), whereas Broadway.com does not (as far as I can tell). That's another sign that Broadway.com is just a Ticketmaster box office with a web site. And that is NOT the sweet spot in the industry´s value chain. No integration with the underlying ticketing system means many competitve disadvantages (no direct booking, no seat specific booking, inventory risk, no print at home etc.). As a result order processing costs will always be higher AND
  consumer experience will be worse. That is an unfavorable combination. [Ticketing - being a very small market - is hence badly covered by analysts. I am not aware of a current report understanding the industry well. Especially as Ticketmaster is not a stand alone business anymore.]
• Looking only at HOLL´s presentations available at their website, my guess would be that management has some sector expertise (like cable TV). However, overall quality of their presentation is "limited". And I do not buy the synergy story. Looks more like an opportunistic story to me (that can create some value as well). Execution across the different businesses appears inconsistent: Broadway.com itself actually is a pretty good e-commerce site, Hollywood.com is not a good consumer site (especially for a newly relaunched site and given IMDB.com to copy).
• Conclusion: Like most "complicated" small cap stocks HOLL is very hard to understand or value from the outside and good analysis is rare (in my opinion that causes inefficiency in that market segment). Even being very critical of the analysis presented on your blog, it might be a buy. I guess most value could be created by taking the company private and dismantling it. However (in case I understand that correctly), insider selling, negative cash flow & limited cash on hand make more analysis
  necessary in any case.

PS: I am neither short nor long in HOLL. Just being interested, as my business partner and I are involved in ticketing and consumer Internet ventures in general.

Specific responses to Hollywood Media's statement on your blog:

We also recently became the exclusive provider of Broadway tickets to the NY Times web site.

Guess they offered the most money. Deal has certainly "brand value" for HOLL. If its adds value is another question. Ticketmaster had probably offered just a standard package (there are reasons for that, e.g. potential negative external costs).

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. We have “exclusive