Warner Bros buys Rotten Tomatoes owner Flixster

Hollywood studio Warner Bros has acquired movie discovery service Flixster, which owns film review website Rotten Tomatoes, and intends to expand the business into the area of "digital content ownership".

Warner Bros Home Entertainment acquired Flixster for an undisclosed sum. Reports previously valued the business, which has more than 25 million users worldwide a month, at between $60m and $90m (£36m and £54m).

Rotten Tomatoes was previously owned by Rupert Murdoch's News Corporation. In January last year News Corp sold Rotten Tomatoes to Flixster in return for a minority stake of about 20%.

Time Warner subsidiary Warner Bros said Flixster, which has a significant presence on digital services including Facebook and BlackBerry, will continue to operate independently but intends to use the business to "expand its services beyond movie discovery to enable digital content ownership and delivery across any connected digital device".

The company said it intends to use the Flixster brand and technical expertise to build on its recent "studio-agnostic" initiative Digital Everywhere, which it says will be the "ultimate destination for consumers to organise and access their entire digital library from anywhere on the device of their choice, as well as to share recommendations and discover new content".

"Driving the growth of digital ownership is a central, strategic focus for Warner Bros," said the Warner Bros Home Entertainment Group president, Kevin Tsujihara. "The acquisition of Flixster will allow us to advance that strategy and promote initiatives that will help grow digital ownership."

In March, Warner Bros started testing movie rentals through Facebook in what has been seen as a challenge to movie-streaming services such as Netflix.

Time Warner, which also owns assets including CNN, Turner Broadcasting, HBO and Marie Claire owner IPC Media, reported a 6% rise in first quarter revenues to $6.7bn (£4.05bn) on Wednesday.

However, net income fell from $725m to $651m year on year, partly due to a 37% increase in programming costs due to a deal with CBS to share coverage of the NCAA US college basketball tournament.

The company benefited from the recovery in the advertising market, with total advertising revenues growing 20% year on year.

The TV network division, home to Turner and HBO, saw revenues increase 18% to $3.5bn and ad revenues surged 31% year on year.

Warner Bros saw revenues fall 3% to $2.6bn, partly due to comparison with big hits that came out in the equivalent quarter last year, such as Sherlock Holmes and The Blind Side.

The publishing division, which includes Fortune, Time and Sports Illustrated, reported flat revenues of $798m.

Jeff Bewkes, the Time Warner chief executive, called the results a "solid start" and said the company was "on track to meet our financial goals for 2011".

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