Reel.com To Hit ëPlayí On IPO

Hollywood Entertainment Corp. owner of Hollywood Video said it will take its Internet video store Reel.com public, as more businesses seek out the increasingly competitive electronic market for videos and DVDs.Hollywood Entertainment, which bought Reel.com in July 1998 for $100 million, plans to file a statement with the U.S. Securities and Exchange Commission this month. The timing and terms of the offering depend on market conditions, the company said. The company has made no secret about its plans to take Reel.com public. Reel.com chairman Mark Wattles said in February that the company was ""seriously considering"" such a move. And in what was likely a pre-IPO makeover, Reel.com was re-vamped in August with a new look, simpler navigation tools and more movie data. Hollywood Video rival Blockbuster Inc., is also considering a public offering for its Web site, Blockbuster.com and plans to roll out a revamped Blockbuster.com that would sell new and used videos and DVDs and eventually offer video rentals (HR10/22).""Reel.com has done a good job establishing a premier brand, but theyíre going to have real competition (from Blockbuster),"" said Peter Krasilovsky, and e-commerce analyst with the Kelsey Group.In a separate news, Reel.com was a drag on Hollywood Entertainmentís otherwise positive third quarter earnings, which were released Tuesday. The Internet video storeís net income loss nearly doubled to $19.3 million, compared with a loss of $10.5 million in the third quarter of 1998.Excluding Reel.comís performance, Hollywood Entertainment said it recorded a third-quarter profit of $8.8 million, or 19 cents a share, compared with a profit of $6.1 million a year earlier. Revenue was up 39% to $256.2 million from $184.1 million a year earlier.Source: The Hollywood Reporter