Entertainment media giants like Walt Disney Co., Viacom Inc. and Time Warner Inc. often acquire Internet companies to leverage their offline properties.
But a small Internet entertainment company is turning that formula around by buying an offline company to leverage its Web property.
It’s not the norm, especially since the spring tech meltdown, but it’s exactly what Santa Monica-based Fandom Inc. did earlier this month with its purchase of Cinescape magazine. Terms of the deal weren’t disclosed.
Founded in July 1999, Fandom operates Web sites for fans of science fiction, fantasy, horror and action genres.
The magazine acquisition adds Cinescape’s 10 full-time staffers to Fandom’s roster of 120 employees. It also extends the reach of Fandom to Cinescape’s entertainment-hungry readers, who turn to the magazine for news about movies, television and new media.
Launched in 1994, the magazine is published every two months, with three double issues per year. The Chicago-based publication has a circulation of 132,000 and operates a Web site, which, like all of the sites in the Fandom network, blends news, merchandising and fan participation.
“Fandom is all about providing multiple platforms to allow fans to extend their entertainment experience,” said company CEO Mark Young. “Print is integral to that extension of experience, because people want more choices, not less.”
Fandom is redesigning its home page to make room for news content generated by Cinescape. Before the acquisition, entertainment news content had been lacking at Fandom’s feature- and review-oriented sites.
“What we do as a business is acquire companies with strong consumer franchises,” Young said. “You can’t limit yourself to one platform if you want to satisfy the consumer’s entertainment needs.”
Since its launch, Fandom has reeled in $25 million in two rounds of venture capital financing from Redpoint Ventures, RRE Ventures, Wasserstein Adelson Ventures and Entertainment Media Ventures.
Redpoint Ventures Managing Partner Brad Jones said Fandom’s acquisition of Cinescape is an opportunity to develop Fandom as an integrated online and offline supplier of entertainment and commerce.
“The market has realized that the most successful online companies couple their efforts with offline marketing to the same customer base,” Jones said.
And an IPO could be in the works. “With the growth projection that we’re on, it’s something that we would consider for the middle of next year,” Young said.
In a past interview, Fandom officials said they expect to post $20 million in revenue this year.
Investors will be watching Fandom’s growing and potentially lucrative subscriber base, a demographic that Fandom recently proved can aid a film when it cross-promoted Twentieth Century Fox Film Corp.’s “X-Men.”
