Posted on 10/11/2009 6:40:59 AM PDT by TigerLikesRooster
US film company applies to launch ‘movie derivatives’
By Jeremy Grant in London
Published: October 8 2009 23:26 | Last updated: October 8 2009 23:26
Being able to bet on whether a movie makes money or ends up a box office flop inched a step closer to reality on Thursday after a second company in the film business applied to US regulators to set up a “movie derivatives” exchange.
The US futures regulator, the Commodity Futures Trading Commission, submitted for public comment an application by Veriana Networks, a privately owned, Delaware-registered company to operate Media Derivatives (MDEX) as an “electronic exchange for contracts based on box office movie revenues”.
MDEX would use the Minneapolis Grain Exchange to clear transactions on its markets and had signed a “clearing services agreement” with its clearing house.
Last year, Cantor Fitzgerald, a US broker, applied to the CFTC to launch Cantor Exchange, a bourse that would list “domestic box office receipt contracts” – in effect, movie futures.
(Excerpt) Read more at ft.com ...
Ping!
So what happens when investors refuse to make bets on films like “W,” “Nixon/Frost” or others that bash America and conservative ideas? You know...the ones that get all the hype and praise but bomb at the box office?
1. Washington politician.
2. New York camera shop owner.
3. Hollywood accountant.
As a former financier of Hollywood films, I offer a modest.............
R O T F L M A O
“Given the fraudulent nature of Hollywood bookkeeping, how could anyone bet on the results? “
The same people who bought bundled up sub-prime mortgages ??
: )
Movie derivatives. What could possibly go wrong.
And so does this ‘movies derivatives’ thing just mean it’s some kind of a gambling set-up? Like a football pool? I am at a loss here.
You make a great point but if you notice the contracts will be based on box office receipts. The only reliable figure in the industry.
You will never see any movie derivatives ...
Because Hollywood is having very serious financial difficulties
Hollywood just ain’t sexy now
It might provide the studio better information on the box office prospects of their projects. They might alter marketing and post-production budgets depending on the going price of the contract. Marketing has become increasingly more and more expensive often matching the production budgets of middle market movies. Of course as you say, other people who might have interests in movies can use the derivative as “gambling” although that is true of all options and future contracts.
Max Bialystock, call your office.
So would these be actual futures on movie revenues—a way for a studio to distribute its risk in making and releasing a film—or is this like Intrade, a market-form betting pool?
I think C19fan has your answer, as he/she answered mine.
Should work if an accompanying CDS is attached.....okay maybe not.
I’d like to take part in this: Pro American, Pro Christian, Pro Family it will probably do well, Anti-American, Trashy, Obscene, Satanic, etc..probably do poorly (in the US)!
Saw the First one.....Being There......derivative was called...Forest Gump ???
On Sept. 4, 2005, the New York Times printed the following intriguing correction: An article last Sunday about film piracy included incorrect revenue data supplied by the Motion Picture Association of America. Hollywood's global revenue in 2004 was $44.8 billion, not $84 billion. Of the total, $21 billion, not $55.6 billion, came from sales of DVDs and Videos.
EPSTEIN CONTINUES The correction was the result of a Times reporter, Timothy L. O'Brien, asking the Motion Picture Association of America to furnish the combined global take of the major studios in 2004. The six major studios submit their revenue reports to the MPAA, which, in turn, compiles the total revenue received from theatrical distribution, video sales (now mainly DVD), and television licensing. These data are then circulated among top executives in the All Media Revenue Report. (Link to actual report on site.)
Instead of supplying the New York Times with the actual numbers, the MPAA sent bogus figures. Hollywood's DVD revenue alone was inflated by more than $33 billion, possibly to make the MPAA's war against unauthorized copying appear more urgent.
Of course, the reporter had no way of knowing these impressive-sounding numbers were inaccurate and published them in an otherwise accurate story on film piracy.
Such are the perils of Hollywood reporting. Since Hollywood is an industry dedicated to perpetrating illusion, its leaders often assume they have license to take liberties with the factual elements that support the movies they make. This practice is euphemistically described by marketing executives as "pushing the reality envelope."
The way in which Hollywood crosses the boundary between the make-believe and the real world takes myriad forms. Consider, for example, 20th Century Fox's creation of an "Extraterrestrial Highway" in Nevada.
In 1996, in preparation for a publicity campaign for the movie Independence Day, Fox executives persuaded Nevada Gov. Bob Miller to officially dedicate Nevada's Highway 375 as a safe haven for extraterrestrials who landed their spaceships on it. Fox then placed a beacon on the highway near the town of Rachel, Nev., pointing to "Area 51"—which it described in a news release as the place where the U.S. military operates "a top secret alien study project." To make sure that the story received wider circulation than just Fox News, the studio arranged for busloads of reporters to see the putative periphery of "Area 51."
Even though there is no such military base or "Area 51," the "Extraterrestrial Highway" resulted in hundreds of news stories about alien visitors. Not only did this help publicize Independence Day, but it fed into the long-standing paranoid fantasy about government machination to conceal space invaders from the public. (A fantasy that Steven Spielberg, for one, has brilliantly mined in such films as Close Encounters of the Third Kind, E.T.: the Extra-Terrestrial, Men in Black, and the miniseries Taken.)
Hollywood has pushed the reality envelope in other creative fashions, ranging from a studio creating a fake corporate Web site, as Paramount did with the Manchurian Global Corporation for its remake of The Manchurian Candidate, to counterfeiting a film critic, as Sony Pictures did with the nonexistent "David Manning." It's a given that studios will alter the off-screen lives of stars, as in the case of the unmarried actor Raymond Burr, whose official biography included two imaginary dead wives and a dead child.
There's also the common practice of scripting fake anecdotes for stars to recite on talk shows, as, for example, Lucy Liu's vivid description of her co-actress Drew Barrymore clinging to the hood of a speeding car going about 35 miles an hour without a safety cord during the making of Charlie's Angels: Full Throttle.
Nor is it surprising that the culture of deception is so deeply entrenched in Hollywood. The industry, after all, derives much of its wealth and power from its ability to get audiences to suspend disbelief in movies and television programs—even so-called reality shows. Further, to realize full profitability, these illusions must be convincing enough to be sustained in other products—such as videos, theme-park rides, games, and toys—for years, if not decades.
So, pushing the reality envelope is simply seen by the entertainment press and the players themselves as just part of show biz.
Edward Jay Epstein is the author of The Big Picture: The New Logic of Money and Power in Hollywood. (To read the first chapter, click here.) http://www.edwardjayepstein.com/prologue.htm
--SNIP--long read
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