It does not surprise me that the MPAA is protesting Cantor Fitzgerald’s launch of a Hollywood futures market, the Cantor Exchange.
Cantor Fitzgerald explained how it would work on NPR’s Marketplace. I am stymied by how anyone invested in the marketing or financing of a film could participate, as well as anyone with insider knowledge. That because it’s about betting on future performance, apparently. The number of shares you get of a movie are based on a prediction of how well the box office is going to do.
On the upside, it’s possible the major studios and indies could mitigate losses on their riskier films by trading futures contracts. And that reduction of risk could also attract additional investors…That could force marketing mavens to pony up additional coin to buy “contracts” of their films to give audiences the impression that their movies will be hits and are worth seeing.
And the LAT:
With handicapping the weekend box office now a topic around the family breakfast table, Cantor and Veriana hope they can harness the national obsession to create a safety net for the risky and expensive business of producing movies. If Universal Pictures, for instance, had traded a futures contract for “The Wolfman,” it might have mitigated its losses on the recent flop.
This seems like so much folly to me.
Walletpop is so gung ho they’re giving tips on how to win.
Listen to the NPR Marketplace report here: