• negative cash flows and accumulated deficit,

• the need to manage our growth and integrate new businesses into Hollywood Media,

• our ability to develop and maintain strategic relationships,

• our ability to compete with other media, data and Internet companies and other competitors,

• our ability to maintain and obtain sufficient capital to finance our growth and operations,

• our ability to realize anticipated revenues and cost efficiencies,

• technology risks and risks of doing business over the Internet,

• government regulation,

• our ability to achieve and maintain effective internal controls,

• dependence on our founders, and our ability to recruit and retain key personnel, and

• the volatility of our stock price.

Hollywood Media is also subject to other risks detailed herein or detailed in our Annual Report on Form 10-K for the year ended December 31, 2006 and in other filings made by Hollywood Media with the Securities and Exchange Commission.
Because these forward-looking statements are subject to risks and uncertainties, we caution you not to place undue reliance on these statements, which speak only as of the date of this Form 10-Q. We do not undertake any responsibility to review or confirm analysts' expectations or estimates or to release publicly any revisions to these forward-looking statements to take into account events or circumstances that occur after the date of this Form 10-Q. As a result of the foregoing and other factors, no assurance can be given as to the future results, levels of activity or achievements and neither we nor any other person assumes responsibility for the accuracy and completeness of such statements.
Overview
Hollywood Media is a provider of information, data, news and other content, and ticketing to consumers and businesses covering the entertainment, Internet and media industries. We own and operate a number of business units focused on the entertainment and media industries. Hollywood Media derives a diverse stream of revenues from this array of business units, including revenue from Broadway and London's West End ticket sales to both individuals and groups, data syndication, subscription fees, content licensing fees, advertising, and book development license fees and royalties. Our Data Syndication business includes CinemaSource, EventSource, and ExhibitorAds, and previously included our Baseline/StudioSystems business unit ("Baseline") until it was sold to The New York Times Company on August 25, 2006. Our Broadway Ticketing business includes Broadway.com, 1-800-Broadway, Theatre Direct and Theatre.com. These services supply media outlets with specific information on entertainment events, such as movies, live theater and concerts and sell tickets for live theater. Hollywood Media's businesses also include an intellectual property business, Hollywood.com, the U.K. based CinemasOnline companies and a minority interest in MovieTickets.com. In addition, Hollywood Media owns and operates the cable television network, Hollywood.com Television.
Data Syndication Division.
Hollywood Media's Data Syndication Division, also referred to as the Data Business, is a provider of integrated database information and complementary data services to the entertainment, Internet and media industries. The Data Business is currently comprised of the Source Business, which includes three related lines of business: CinemaSource, EventSource and ExhibitorAds, and previously included Baseline until it was sold on August 25, 2006. CinemaSource is the largest supplier of movie showtimes as measured by market share in the United States and Canada, and compiles movie showtimes data for more than 44,000 movie screens in the United States, Canada and the United Kingdom. EventSource compiles and syndicates detailed information on community events in numerous cities in the United States and

United Kingdom, including concerts and other live performances, sporting events, festivals, fairs and shows. ExhibitorAds provides movie exhibitors with directory newspaper advertising services and other exhibitor marketing services, including preparing email newsletters and developing exhibitor websites utilizing theater showtimes data from CinemaSource.
Broadway Ticketing Division.
Hollywood Media's Broadway Ticketing Division is comprised of Broadway.com, 1-800-BROADWAY, Theatre Direct International ("TDI") and U.K.-based Theatre.com (collectively called "Broadway Ticketing"). Broadway tickets are sold online through our Broadway.com website and by telephone through our 1-800-BROADWAY number. Broadway Ticketing is also a live theater ticketing seller that provides groups and individuals with access to theater tickets and knowledgeable service, covering shows on Broadway, off-Broadway and in London's West End theatre district. We launched our U.K.-based Theatre.com in December 2005 with editorial coverage of London's West End theatre and began selling ticketing to major London venues in February of 2006, based upon a similar model to selling tickets on Broadway.com. Broadway.com and Theatre.com features include shows' opening night video and photo coverage, show reviews, celebrity interviews and theater columns, as well as show information pages, including casting, synopses and venue information.
Ad Sales Division.
Hollywood Media's Ad Sales Division includes Hollywood.com, Broadway.com and CinemasOnline. Hollywood.com, a premier online entertainment destination, generates revenue by selling advertising on its website, and commissions received for advertising sold by the Hollywood.com ad sales team on MovieTickets.com. Hollywood.com features in-depth movie information, including movie previews, descriptions and reviews, movie showtimes listings, entertainment news, celebrity fan sites, celebrity photo galleries and an extensive multimedia library. Hollywood.com's features also include audio podcasts and blogging. In addition to its Broadway ticket sales function, Broadway.com sells advertising and provides show previews and showtimes, show synopses, box office results, cast and crew credits and biographies, and an in-depth Tony Awardsฎ area. CinemasOnline, a group of companies based in the U.K., maintains websites for cinemas and live theatres in the U.K. in exchange for the right to sell advertising on such websites. CinemasOnline also provides other marketing services, including advertising sales on plasma screens placed in various venues throughout the U.K. and Ireland, such as hotels, car dealerships, cinemas and live theatres.
Cable TV.
Hollywood Media's Cable TV Division includes Hollywood.com Television ("HTV") and Broadway.com Television ("BTV") which are Free-VOD (FVOD) channels that offer interactive entertainment and information with on-demand video content, previews, reviews, behind the scenes footage, interviews and coverage of entertainment industry events to cable company subscribers. HTV is carried on certain cable TV systems including Cablevision Systems, Cox Communications, Comcast, Insight Communications, Mediacom, Charter and Bresnan. BTV is distributed by Cablevision on its New York area systems.

Intellectual Properties Business.
Our Intellectual Properties division includes a book development and book licensing business owned and operated by our 51% owned subsidiary, Tekno Books, which develops and executes book projects, frequently with best-selling authors. Tekno Books has worked with over 60 New York Times best-selling authors, including Isaac Asimov, Tom Clancy, Tony Hillerman, John Jakes, Jonathan Kellerman, Dean Koontz, Robert Ludlum, Nora Roberts and Scott Turow. Hollywood Media is also a 50% partner in NetCo Partners, a partnership that owns Tom Clancy's NetForce. Hollywood Media also owns directly additional intellectual property created for it by various best-selling authors such as Mickey Spillane, Anne McCaffrey and others.
MovieTickets.com, Inc.
MovieTickets.com, Inc. is one of the two leading destinations for the purchase of movie tickets through the Internet. MovieTickets.com is an online ticketing service owned by a joint venture formed by Hollywood Media and several major movie exhibitor chains. Hollywood Media currently owns 26.2% of the equity of MovieTickets.com.
The following discussion and analysis should be read in conjunction with Hollywood Media's Unaudited Condensed Consolidated Financial Statements and the notes thereto included in Item 1 of Part I of this report. Results of Operations
The following table summarizes Hollywood Media's revenues, operating expenses and operating income (loss) from continuing operations by reportable segment for the six months ended June 30, 2007 ("Y2-07") and 2006 ("Y2-06") and the three months ended June 30, 2007 ("Q2-07") and 2006 ("Q2-06"), respectively:

                                Broadway                 Data                                       Intellectual               Cable
Y2-07                          Ticketing               Business               Ad Sales             Properties (a)                TV                   Other                   Total
(unaudited)
Net Revenues                 $   58,784,512          $   3,288,016          $   5,258,941          $       478,693          $    116,130          $            -          $   67,926,292
Operating Expenses               57,482,451              2,197,625              6,137,605                  478,814               387,360               5,423,244              72,107,099

Operating Income (loss)      $    1,302,061          $   1,090,391          $    (878,664 )        $          (121 )        $   (271,230 )        $   (5,423,244 )        $   (4,180,807 )


% of Total Net Revenue                   86 %                    5 %                    8 %                      1 %                   0 %                     -                     100 %

Y2-06
(unaudited)
Net Revenues                 $   45,436,255          $   3,113,598          $   5,036,895          $       489,168          $     34,000          $            -          $   54,109,916
Operating Expenses               43,704,420              2,029,635              5,451,598                  492,917               349,959               5,402,467              57,430,996

Operating Income (loss)      $    1,731,835          $   1,083,963          $    (414,703 )        $        (3,749 )        $   (315,959 )        $   (5,402,467 )        $   (3,321,080 )


% of Total Net Revenue                   84 %                    6 %                    9 %                      1 %                   0 %                     -                     100 %


                                Broadway                 Data                                       Intellectual               Cable
Q2-07                          Ticketing               Business               Ad Sales             Properties (a)                TV                   Other                   Total
(unaudited)
Net Revenues                 $   34,750,569          $   1,639,295          $   2,845,876          $       282,240          $     37,955          $            -          $   39,555,935
Operating Expenses               33,837,429              1,081,899              3,142,046                  259,646               174,828               2,372,264              40,868,112

Operating Income (loss)      $      913,140          $     557,396          $    (296,170 )        $        22,594          $   (136,873 )        $   (2,372,264 )        $   (1,312,177 )


% of Total Net Revenue                   88 %                    4 %                    7 %                      1 %                   0 %                     -                     100 %

Q2-06
(unaudited)
Net Revenues                 $   26,990,600          $   1,588,160          $   2,756,022          $       203,359          $     29,000          $            -          $   31,567,141
Operating Expenses               26,094,624              1,111,385              2,751,983                  231,596               190,897               2,398,132              32,778,617

Operating Income (loss)      $      895,976          $     476,775          $       4,039          $       (28,237 )        $   (161,897 )        $   (2,398,132 )        $   (1,211,476 )


% of Total Net Revenue                   85 %                    5 %                    9 %                      1 %                   0 %                     -                     100 %

a. Does not include Hollywood Media's 50% interest in NetCo Partners which is accounted for under the equity method of accounting and Hollywood Media's share of the income (loss) is reported as Equity in Earnings of Unconsolidated Investees (discussed below).

Composition of our segments is as follows:
• Broadway Ticketing - sells tickets via Broadway.com, 1-800-BROADWAY, Theatre.com and TDI to live theater events for Broadway, Off-Broadway and London's West End, and hotel and restaurant packages, to consumers, domestic and international travel professionals including travel agencies and tour operators, and educational institutions.

• Data Business - licenses entertainment content and data and includes CinemaSource (which licenses movie showtimes and other movie content), EventSource (which licenses local listings of live events for over 10,000 venues and approximately 110,000 events per month including concerts, sporting events, festivals, fairs and shows, touring companies, company playhouses and dinner theaters to media, wireless and Internet companies) and ExhibitorAds (which creates exhibitor-paid directory ads for insertion in newspapers in the U.S. and provides other exhibitor marketing services).

• Ad Sales - sells advertising on Hollywood.com, Broadway.com and MovieTickets.com, and includes CinemasOnline which sells advertising on cinema and live theatre websites in the U.K. Hollywood.com receives commissions on the ads it sells on MovieTickets.com.

• Intellectual Properties - owns or controls the exclusive rights to certain intellectual properties created by best-selling authors and media celebrities, which it licenses for book and other media. This segment includes a 51% interest in Tekno Books, and a book development business, and this segment does not include our 50% interest in NetCo Partners.

• Cable TV - comprised of Hollywood.com Television and Broadway.com Television, Free-VOD channels that offer interactive entertainment information with on-demand video content to subscribers in certain cable TV systems.

• Other - is comprised of payroll and benefits for corporate and administrative personnel as well as other corporate-wide expenses, such as audit fees, proxy costs, insurance, centralized information technology, and includes consulting and other fees and costs relating to compliance with the provisions of the Sarbanes-Oxley Act of 2002 that require Hollywood Media to assess and report on internal control over financial reporting, and related development of controls.

NET REVENUES
Total net revenues were $67,926,292 for Y2-07 as compared to $54,109,916 for Y2-06, an increase of $13,816,376 or 26%, and $39,555,935 for Q2-07 as compared to $31,567,141 for Q2-06, an increase of $7,988,794 or 25%. The increase in net revenue from Y2-06 to Y2-07 and Q2-07 over Q2-06 was primarily due to growth in our Broadway Ticketing Division. In Q2-07 net revenues were derived 88% from Broadway Ticketing, 4% from Data Business, 7% from Ad Sales and 1% from Intellectual Properties. In Q2-06 net revenues were derived 85% from Broadway Ticketing, 5% from Data Business, 9% from Ad Sales and 1% from Intellectual Properties.

Broadway Ticketing net revenues were $58,784,512 and $45,436,255 for Y2-07 and Y2-06, respectively, an increase of $13,348,257 or 29%, and such net revenues were $34,750,569 and $26,990,600 for Q2-07 and Q2-06, respectively, an increase of $7,759,969 or 29%. The increase in Broadway Ticketing net revenues in Y2-07 from Y2-06, and in Q2-07 from Q2-06, was primarily due to the following: (i) the purchase of Showtix on February 1, 2007; and (ii) ticket price increases by theaters, increased number of tickets sold, changes in our marketing and advertising strategies, and increased availability of tickets to top shows. Ticketing net revenue is generated from the sales of live theater tickets for Broadway, off-Broadway and London's West End both online via Broadway.com and Theatre.com and offline via 1-800-BROADWAY to domestic and international travel professionals, traveling consumers and New York area theater patrons. Ticketing net revenue is recognized on the date of performance of the show. Ticketing net revenue received for performances yet to take place is recorded as deferred revenue in our condensed consolidated balance sheet.
Data Business net revenues (which includes CinemaSource, EventSource and ExhibitorAds) were $3,288,016 for Y2-07 as compared to $3,113,598 for Y2-06, an increase of $174,418 or 6%, and such net revenues were $1,639,295 for Q2-07 as compared to $1,588,160 for Q2-06, an increase of $51,135 or 3%. This increase in Data Business revenue in Y2-07 over Y2-06, and Q2-07 over Q2-06, is attributable primarily to additional licensing agreements entered into in our Data Business. Revenue for CinemaSource and EventSource is generated by the licensing of movie, event and theater showtimes and other information to media outlets and Internet companies including newspapers such as The New York Times, Internet companies including AOL's Moviefone and City Guide, MSN, Yahoo!, Google and wireless providers. Revenue for ExhibitorAds is generated by creating exhibitor paid directory ads for insertion in newspapers.
Ad Sales net revenue was $5,258,941 for Y2-07 as compared to $5,036,895 for Y2-06, an increase of $222,046 or 4%, and such net revenues were $2,845,876 and $2,756,022 for Q2-07 and Q2-06, respectively, an increase of $89,854 or 3%. The increase in Ad Sales revenue in Y2-07 over Y2-06, and Q2-07 over Q2-06, is attributable primarily to increased commissions earned by Hollywood.com for ad sales on MovieTickets.com. Ad sales revenues are generated from the sale of sponsorships and advertisements on Hollywood.com and Broadway.com, as well as by advertisements generated by CinemasOnline.
Net revenues from our Intellectual Properties division were $478,693 for Y2-07 as compared to $489,168 for Y2-06, a decrease of $10,475 or 2%, and such net revenues were $282,240 for Q2-07 as compared to $203,359 for Q2-06, an increase of $78,881, or 39%. The Intellectual Properties division generates revenues from several different activities including book development and licensing and intellectual property licensing. Revenues vary quarter to quarter depending on the timing of the delivery of the manuscripts to the publishers. Revenues are recognized when the earnings process is complete and ultimate collection of such revenues is no longer subject to contingencies. The Intellectual Properties division revenues do not include our 50% interest in NetCo Partners, which is accounted for under the equity method of accounting and under which Hollywood Media's share of the income (loss) is reported as Equity in Earnings (Losses) of Unconsolidated Investees (discussed below).

EQUITY IN EARNINGS (LOSSES) OF UNCONSOLIDATED INVESTEES
    Equity in earnings (losses) of unconsolidated investees consisted of the
following:

                                     - 25 -

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                                                   Six Months Ended June 30,                 Three Months Ended June 30,
                                                 2007                 2006                 2007                    2006
NetCo Partners (a)                             $     875         $        (1,768 )      $       671          $          (3,473 )
MovieTickets.com (b)                                   -                       -                  -                          -

                                               $     875         $        (1,768 )      $       671          $          (3,473 )

(a) NetCo Partners NetCo Partners owns Tom Clancy's NetForce and is primarily engaged in the development and licensing of Tom Clancy's NetForce. NetCo Partners recognizes revenues when the earnings process has been completed based on the terms of the various agreements, generally upon the delivery of the manuscript to the publisher and at the point where ultimate collection is substantially assured. When advances are received prior to completion of the earnings process, NetCo Partners defers recognition of revenue until the earnings process has been completed. Hollywood Media owns 50% of NetCo Partners and accounts for its investment under the equity method of accounting. Hollywood Media's 50% share of earnings by NetCo Partners was $875 for Y2-07 compared to a net loss of $1,768 for Y2-06, an increase of $2,643. Hollywood Media's 50% share of earnings was $671 for Q2-07 as compared to a net loss of $3,473 for Q2-06, an increase of $4,144. NetCo Partners recognized $1,341 in income during Q2-07.
(b) MovieTickets.com Hollywood Media owns 26.2% of the total equity in the MovieTickets.com, Inc. joint venture. Hollywood Media records its investment in MovieTickets.com under the equity method of accounting, recognizing its percentage interest in MovieTickets.com income or loss as equity in earnings of investees. Hollywood Media shared in 26.2% of the losses or income generated by the joint venture during Q2-07 and Q2-06. We have not recorded any of our share of the joint venture's results of operations in Q2-07 and Q2-06 related to our investment in MovieTickets.com because the investment has been reduced to zero. Hollywood Media is currently not providing for additional losses, if any, generated by MovieTickets.com as Hollywood Media has not guaranteed to fund future losses, if any, generated by MovieTickets.com. The MovieTickets.com web site generates revenues from service fees charged to users for the purchase of movie tickets online and the sale of advertising.
OPERATING EXPENSES
Cost of revenues - ticketing. Cost of revenues - ticketing was $50,176,228 for Y2-07 compared to $37,924,753 for Y2-06 for an increase of $12,251,475 or 32%. Cost of revenues - ticketing for Q2-07 was $29,964,352 compared to $23,177,800 for Q2-06 for an increase of $6,786,552 or 29%. Cost of revenue consists primarily of the cost of tickets and credit card fees for the Broadway Ticketing segment, partially offset by rebates received from certain producers based on exceeding certain ticketing sales goals. As a percentage of ticketing revenue, cost of revenue - ticketing was 85% and 83% for Y2-07 and Y2-06, respectively, and 86% for both Q2-07 and Q2-06. The increase in cost of revenue as a percentage of ticketing revenue in Y2-07 compared to Y2-06 was due in large part to increased sales in group tickets which carry a lower gross profit margin.

Editorial, production, development and technology. Editorial, production, development and technology costs include payroll and related expenses for the editorial and production staff responsible for creating content on Hollywood Media's websites for our Ad Sales and Data Business segments, and these expenses also include Internet access and computer related expenses for the support and delivery of our information services, and fees and royalties paid to authors and co-editors for the intellectual properties segment. Editorial, production, development and technology costs were $3,993,379 for Y2-07 as compared to $3,360,059 for Y2-06, an increase of $633,320 or 19%, and $2,037,594 for Q2-07 as compared to $1,674,975 for Q2-06, an increase of $362,619 or 22%. As a percentage of revenues from our Ad Sales, Data Business and Intellectual Properties segments, these costs were 44% and 39% for Y2-07 and Y2-06, respectively, and 42% and 37% for Q2-07 and Q2-06, respectively. These cost increases were due in large part to increased investment in the Ad Sales segment in terms of further development of our web sites.
Selling, General and Administrative. Selling, general and administrative (SG&A) expenses consist of occupancy costs, production costs, professional and consulting service fees, telecommunications costs, provision for doubtful accounts receivable, general insurance costs, selling and marketing costs (such as advertising, marketing, promotional, business development, public relations, and commissions due to advertising agencies, advertising representative firms and other parties). SG&A expenses for Y2-07 were $8,168,931 compared to $7,278,119 for Y2-06, an increase of $890,812 or 12%. SG&A expenses for Q2-07 were $3,902,577 compared to $3,280,216 in Q2-06, an increase of $622,361 or 19%. The increase in SG&A expenses in Y2-07 as compared to Y2-06 was due primarily to the following: (i) increased occupancy expense of approximately $345,000 for our Broadway Ticketing division, of which $258,919 is temporary redundant lease expense while we move our New York offices, (ii) an increase of approximately $426,000 in marketing expenses in our Broadway Ticketing division, and
(iii) increased costs associated with legal expenses, recruitment and telephone expenses offset by decreases in insurance and consulting expenses. The increase . . .