Deeper Dive—How FandangoNow survives among the TVOD giants

FandangoNow's connection to Fandango especially pays off when huge blockbusters get close to their theatrical releases. (FandangoNow)

Amazon, Apple, Google and Walmart are massive companies dominating the transactional video on demand (TVOD) market. FandangoNow is a much smaller competitor, nipping at their heels.

Cameron Douglas, vice president of Fandango home entertainment and head of FandangoNow, can think of any number of reasons why big tech companies and retailers operate transactional video businesses. Some are trying to sell hardware, some are trying to transition from an old physical business to a digital business, and some are using a scaled platform as an engine for other sales and services offered.

“Fandango is really the only pure-play in that space. When you think about it, we are in the business because of our interest and love in serving movie fans,” Douglas said.

Fandango, known widely as a movie ticket sales service, is a unit of NBCUniversal (Warner Bros. holds a minority stake in the company). The company was founded in 2000 and acquired by Comcast in 2007. In 2016, Fandango bought M-Go, and later rebranded it as FandangoNow, a digital storefront for renting or purchasing movies and TV shows.

Fandango operates other businesses as well like review aggregator website Rotten Tomatoes and Movieclips, a YouTube channel that creates official clips from films and shares the revenue with studios. Those two ventures, along with the company’s ticketing service and TVOD business, feed into Fandango’s primary focus of serving movie fans. And, FandangoNow uses all those aspects together to stay competitive in busy TVOD marketplace.

The Fandango ticketing platform is used to build a relationship with individuals within the movie-loving populace and then that relationship and relevant data is used to create a more personalized experience on FandangoNow. Douglas said that’s a key to how FandangoNow keeps pace with the heavy hitters.

“It’s a commoditized business. We’re all selling the same stuff at essentially the same price. So, you try to find ways of differentiating,” Douglas said.

FandangoNow's connection to Fandango especially pays off when huge blockbusters get close to their theatrical releases. FandangoNow reported a 50% increase in transactions for Marvel Cinematic Universe movies since “Avengers: Endgame” advance tickets went on sale on April 2.

FandangoNow has used its ability to market to its larger Fandango audience and special features to differentiate itself. Douglas pointed toward features like Fresh Picks, a monthly selection of “Certified Fresh” films that are not available on SVOD and offered at reduced rental rates. Douglas also said that FandangoNow is the only TVOD service that rents bundles of films – other TVODs offer movie bundles that can be purchased.

Douglas also said FandangoNow was the first TVOD to begin offering 4K content, and the service now has all the 4K content offered by all the major studios. 4K has become a significant part of FandangoNow’s business. Douglas said, depending on the structure of the promotion of a given title, FandangoNow’s 4K volume for a specific title will be between 20% and 41% of overall business.

He said the FandangoNow’s efforts to differentiate are paying off, as the company had a strong 2018 financially and that’s carried over in 2019 so far. He added that FandangoNow is growing the fastest among TVOD services, showing there’s still room for competition.

“I think the field is set. I think it’s us, and a few of those other guys. I think those are the transactional players for the foreseeable future,” Douglas said.