Can the commercialisation of movies get worse?

[Karel Bata]

"Box- office futures have passed a final regulatory hurdle, clearing the way for the first bets to be placed in the near future, and overcoming objections by Hollywood that sought to block it.

 

"In a 3-2 vote, the Commodity Futures Trading Commission on Monday afternoon approved a contract created by the company Media Derivatives that would allow traders to bet on the gross receipts that a movie pulls in during its opening weekend."

 

http://bit.ly/MoreLegalisedGambling

 

I'm going to become a film critic. Can you imagine the insider trading opportunities to be had there...? :o

[David S Carroll]

I don't see why Hollywood would be so against the idea? If this market gets going, it could be a good way for studios to hedge out potential future losses. I guess Hollywood doesn't want any meaningful predictions that may run counter to their entirely "bullish" predictions of future releases' box office sales. Fun stuff! Thanks for the link Karel.

[George Ebersole]

I don't see why Hollywood would be so against the idea? If this market gets going, it could be a good way for studios to hedge out potential future losses. I guess Hollywood doesn't want any meaningful predictions that may run counter to their entirely "bullish" predictions of future releases' box office sales. Fun stuff! Thanks for the link Karel.

I heard about this yesterday from several sources, but I'm still not convinced of it. Variety, Yahoo News and CNN state that the vote's going to be on the 21st, and that nothing's been decided as yet. Of course, I'm probably totally wrong.

 

Links;

http://www.thewrap.com/ind-column/feds-delay-decision-movie-futures-trading-18100

http://www.variety.com/article/VR1118020305.html?categoryid=18&cs=1

[Karel Bata]

I can't get my head around it. What fool would ever bet on how much a film would make? :lol:

 

I'm serious!

[David S Carroll]

Oops! I reread the articles including the links George posted, and I was mistaken in thinking that this would be a derivative-type product...because if it were it would just be another type of insurance to protect against losses...but this is a futures product. I can definitely see how the studios do not like the idea of an open market where people can buy, or go short, on the future potential of a feature film. I think the market would wildly exaggerate the future "value" of a film, thus expressing undue praise or condemnation on a film before anyone even starts production. Yikes!! Futures are a zero sum game just like options so this really would be a market for gamblers, or for those who wish to manipulate the values up/down for any particular film. Not a good thing imho.

[George Ebersole]

Oops! I reread the articles including the links George posted, and I was mistaken in thinking that this would be a derivative-type product...because if it were it would just be another type of insurance to protect against losses...but this is a futures product. I can definitely see how the studios do not like the idea of an open market where people can buy, or go short, on the future potential of a feature film. I think the market would wildly exaggerate the future "value" of a film, thus expressing undue praise or condemnation on a film before anyone even starts production. Yikes!! Futures are a zero sum game just like options so this really would be a market for gamblers, or for those who wish to manipulate the values up/down for any particular film. Not a good thing imho.

Well, the thing I don't get is this; once a movie is released, it's essentially done. There aren't anymore good films that people see again and again because they actually like the substance of the movie. Those days are long-long gone. Today's market is about making the biggest weekend splash, and opening wide.

 

A movie can't appreciate. It's not going to get any better ten years down the road. This whole scheme really has me scratching my head.

[Brian Drysdale]

Well, the thing I don't get is this; once a movie is released, it's essentially done. There aren't anymore good films that people see again and again because they actually like the substance of the movie. Those days are long-long gone. Today's market is about making the biggest weekend splash, and opening wide.

 

A movie can't appreciate. It's not going to get any better ten years down the road. This whole scheme really has me scratching my head.

 

The slow burn is more for the DVD market, you could get it in the past when relatively few prints were made and word of mouth would be marketing factor over the weeks and months. Quite a few well known films didn't do well at first, but then found their audience. Now, often the theatrical release is more for publicity when it goes out on DVD, where the film will make its money

[Karel Bata]

Is that still true in the states? Over here that model's been dead for a years. LoveFilm and the like have completely undercut DVD sales.

 

"Growing DVD sales are over, and DVD rental companies are on life support. Last week, Blockbuster — once the rental giant — warned in its annual report that competition and declining sales “raise substantial doubt about our ability to continue as a going concern.”"

http://broadcastengineering.com/news/with-dvd-sales-declining-0322/

 

I still can't get my head round how this futures thing will work. OK, I can see how betting on a film might be a bit like betting on a horse. But no amount of hype will make a horse run faster, while a film's first weekend is all about the hype. So the temptation for a broker would be to somehow actively influence the hype (whatever that would involve) for good or bad. But of course betting on a 'future' isn't just about guessing the winner, but (it seems) is also to do with betting on the specific short-term fortunes of a film. So what puzzles me is if film-makers, studio execs, and critics rarely get it right (and by right I mean accurate) how on Earth can some broker in an office..? Films aren't like pork bellies where the markets move in reasonably predictable ways. Or is accuracy in this a relative thing..?

 

So are we going to see brokers at Sundance trying to spot the next indie hit? Too weird.

[JD Hartman]

Truly confused by this. Would this be much different then selling shares in a hedge fund to finance future production? I only ask as I am very slightly involved (as a below the line), with a producer that is supposedly getting funding for a feature through investment brokers dealing in movie hedge funds.