Fandango might have built its brand on selling movie tickets, but the West L.A. firm is looking beyond the box office as it positions itself for blockbuster growth going forward.
While its core ticketing operation continues to grow, Fandango has also rapidly diversified its business through an acquisition spree, bringing in promotions businesses and media properties that offer a variety of content. The hope is that those movie fans will stick around and buy tickets, too. The effort is part of Fandango’s plan to ingrain itself in every stage of film consumption.
“We want to be everywhere people are thinking about movies,” said Fandango President Paul Yanover. “The way that consumers relate to movies is multifold. There is a lifecycle experience.”
Industry experts note that the firm’s acquisition binge is not just a strategy for growth – it’s one of survival. But that might not seem obvious based on some its most recent financials. For instance, the company said 2015 ticket sales were up 81 percent from a year earlier. Fandango charges a $1.30 convenience fee, on average, for each sale. The fee is split with exhibitors, though the company declined to say how the money is divided. Fandango serves more than 26,000 screens in the United States, though it does not disclose how many tickets are sold annually on its platform.
The firm’s ticketing services have proved particularly popular for purchasing tickets to blockbuster films on opening weekend. The company claims to have sold 37 percent of opening-weekend tickets for “Star Wars: The Force Awakens” in December. And because a low percentage of consumers purchase their movie tickets online – 10 percent to 15 percent by some industry expert estimates – there is still room to grow.
But having seen consumers adopt the digital ticket-buying habit, theater chains such as AMC Entertainment Inc. and Cinemark USA Inc. are rapidly expanding their in-house online ticketing operations, threatening Fandango’s dominance of the category. AMC charges a $1.25 convenience fee for tickets purchased through its website, a sum it doesn’t have to split. ArcLight Cinemas, a division of Beverly Grove’s Decurion Corp., only offers online ticketing through its website.
Interestingly, some of the theater chains trying to squeeze Fandango’s market share are the very entities responsible for its existence. Fandango was founded in 2000 by a group of more than two dozen chains, including Cinemark, AMC, and Regal Entertainment Group. Comcast Corp. acquired Fandango for an undisclosed amount in 2007.