The Flixster/Rotten Tomatoes/MySpace Mystery Solved: A Christmas Miracle!
About 10 days ago, there was a post in this column about interest by News Corp. and its MySpace unit in Flixster, the popular social networking site for movies. — Titled “MySpace and News Corp. Eye Flixster (But for What?), I wrote:
Context & Ripple Effects
Flixster has been circling an exit for a long time: BoomTown flagged it as quietly for sale back in December 2007, and nothing closed. Meanwhile MySpace has spent 2007–2009 bolting entertainment onto its social graph, from Myspace News to the 2008 MySpaceTV international distribution deal.
Today BoomTown returns to its own ten-day-old report — News Corp. and MySpace are reportedly (still unconfirmed) interested in Flixster — and argues the 'why' is now clear: the prize is less the movie-fan community than Rotten Tomatoes, a review brand MySpace could fold into its entertainment push. The backdrop matters: paid US social-network advertising was projected to fall 3% in 2009 with MySpace cited among the difficulties, so News Corp. has reason to buy audience-magnets rather than wait for display ads to recover.
First-order effects
- A completed deal would hand MySpace a proven movie-review property in Rotten Tomatoes to anchor its entertainment pages, testing which post-acquisition playbook applies — the one used on iLike (bought in August, left largely intact) or Imeem (shut down within weeks of its December acquisition).
- Flixster's investors finally get a credible bidder after roughly two years on the market, ending a sale process BoomTown first reported in late 2007.
Second-order effects
- With social ad dollars shrinking and rumors of MySpace cuts affecting 25% or more of staff circulating since June, News Corp. is effectively substituting acquired verticals for organic growth — forcing rival entertainment destinations to weigh buying their own fan communities or review brands rather than partnering.
- Movie studios and distributors gain (or lose) a single gatekeeper if Rotten Tomatoes' aggregate score sits inside the largest social network, raising the stakes on how the review brand is governed post-deal.
Third-order effects
- If the pattern holds — iLike kept, Imeem buried, Flixster next — the lesson for mid-sized social startups is that vertical communities become content acquisitions for big media owners rather than independent businesses, with the acquirer deciding which brands survive integration.
- Structurally, this points toward consolidation where general-purpose networks under ad pressure buy niche passion communities for their editorial assets, making review aggregators and fan networks strategic infrastructure rather than standalone plays.
The trend: As broad social-network advertising declines, large media owners like News Corp. are turning to vertical communities — Flixster being one data point — as content acquisitions to prop up portal economics.