In finance, box office futures is a type of futures contract in which
investors trade shares in upcoming movies based on their predicted
performance.In the United States the idea of a futures trading in
relation to the success of Hollywood films dates back at least to
1996, when Max Keiser and Michael R. Burns launched Hollywood Stock
Exchange (HSX) as a web-based, multiplayer game in which players use
simulated money to buy and sell "shares" of actors, directors,
upcoming films, and film-related options. After some attention during
the dot-com bubble, HSX was bought in 2001 by the financial company
Cantor Fitzgerald who planned to turn it into a real-money trading
exchange, but the devastation of Cantor Fitzgerald during the 9/11
attacks put the project on hold.In 2007, Arizona-based entrepreneur
Robert Swagger formed Media Derivatives Inc. (MDEX) with the goal of
creating an electronic futures exchange for contracts based on box
office results. The idea behind MDEX was that it could be used by
large film studios to recoup some of the money invested in failing
movies by shorting its film on the exchange. Around the same time,
Cantor Fitzgerald revived its plans for a real-life HSX and tried to
get regulatory approval for it.Before any actual listings or exchanges
could be made, a group of film studios, which was led by Motion
Picture Association of America, asked the regulatory authorities to
ban the practice, stating "that box office futures would be easily
manipulated and of no use to the big film companies. " The main
concern was that decisions that could dramatically change the
performance of any given movie at the box office â€" such as the
weekend in which it premiers or the number of theaters in which it
runs â€" could easily be changed on the fly by studios in order to
manipulate the outcome.
investors trade shares in upcoming movies based on their predicted
performance.In the United States the idea of a futures trading in
relation to the success of Hollywood films dates back at least to
1996, when Max Keiser and Michael R. Burns launched Hollywood Stock
Exchange (HSX) as a web-based, multiplayer game in which players use
simulated money to buy and sell "shares" of actors, directors,
upcoming films, and film-related options. After some attention during
the dot-com bubble, HSX was bought in 2001 by the financial company
Cantor Fitzgerald who planned to turn it into a real-money trading
exchange, but the devastation of Cantor Fitzgerald during the 9/11
attacks put the project on hold.In 2007, Arizona-based entrepreneur
Robert Swagger formed Media Derivatives Inc. (MDEX) with the goal of
creating an electronic futures exchange for contracts based on box
office results. The idea behind MDEX was that it could be used by
large film studios to recoup some of the money invested in failing
movies by shorting its film on the exchange. Around the same time,
Cantor Fitzgerald revived its plans for a real-life HSX and tried to
get regulatory approval for it.Before any actual listings or exchanges
could be made, a group of film studios, which was led by Motion
Picture Association of America, asked the regulatory authorities to
ban the practice, stating "that box office futures would be easily
manipulated and of no use to the big film companies. " The main
concern was that decisions that could dramatically change the
performance of any given movie at the box office â€" such as the
weekend in which it premiers or the number of theaters in which it
runs â€" could easily be changed on the fly by studios in order to
manipulate the outcome.
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