IACI Positive Data Point for Hollywood Media? (HOLL, IACI)

IACI, owner of TicketMaster, is the leader in online event ticketing. The closest pure-play to online ticketing is small cap Hollywood Media (HOLL), which owns Broadway.com, a 26% equity stake in MovieTickets.com, and offers information about local events on its sites eGuide.com and Hollywood.com. So the results of IACI's ticketing business are a potentially useful data point ahead of HOLL's earnings.

From IACI's conference call (full transcript here):

Ticketing ended its record year firing on all cylinders as concert and sports ticket sales remained strong. In Q4 worldwide ticket sales increased 24% and international revenue grew 49%, excluding the impact of foreign exchange. International acquisitions accounted for 15% of ticketing’s overall revenue growth. So as you can see, there’s substantial organic growth in this business.

The obvious question is, can Ticketmaster sustain this level of growth? We’ve always said that predicting growth in this business is a challenge. But all we can say directionally is that while we don’t think the level of growth seen in 2005 is likely to continue, the live event industry feels healthy, both home and abroad, so the underlying drivers feel good.

And here's how Citigroup analyst Mark Mahaney summarized IACI's ticketing results:

Ticketing came in at $254MM, $15MM or 6% above our estimate. Acquisitions played a role here, but the 24% Y/Y unit growth was organically stronger than we expected and followed 28% Y/Y growth in September and 32% Y/Y growth in June. Average revenue per ticket was up 6% Y/Y. Weak 2004 comps, including the NHL strike, were likely a major factor. These will almost certainly raise very difficult comps in 2006.

One quick comment. TicketMaster's business is swung more by concerts and sports than by theater tickets, which comprise the bulk of HOLL's reported revenue. And unlike HOLL, IACI has no exposure to the movie industry, which has seen weak theater attendance. So extrapolations from IACI to HOLL need to be made with great care.

Full disclosure: at the time of writing David Jackson, author of this post, is long HOLL.