Commentary

Ban Of Movie Futures Biz Really Ban On Public Info

by Wayne Friedman , Staff Writer, June 28, 2010

The Motion Pictures Association of America looks like it got what it wanted: a final nail in the coffin of those who would start up a movies future business.

A House-Senate conference committee on Friday approved a ban on such trading. Two principal companies -- Cantor Exchange and Media Derivatives' Trend Exchange -- were seeking to start up box-office futures trading ventures. Instead, a wide-ranging bill that President Obama is eager to sign before July 4 will put the kibosh on that idea.

But the ban isn't really about financial gambling. It's really a ban on information that perhaps the movie-going public should be allowed to have, consumers who already pay higher and higher prices for movie tickets: $11, $12 and more.

The MPAA was worried that that savvy investors or other executives with grudges, those who hate particular projects, actors, or directors, would do damage to theatrical movies if such trading were allowed.

But there are plenty of bad movies out there to do their own damage. Tom Cruise's latest with Cameron Diaz, for example, "Knight and Day," fell asleep with only $3.8 million for its Wednesday opening. Despite a very heavy marketing campaign, critics were lukewarm about the movie, at best.

A couple of weeks ago Lions Gate's "Killers," starring Katherine Heigl and Ashton Kutcher, wasn't screened beforehand for critics. That's always a telltale sign the studio isn't confident. Rotten Tomatoes gave the movie a very low 12% score -- meaning 12% of all critics' reviews were positive. The film did $16 million in its first week (somewhat decent) -- and then collapsed, with just $42 million U.S. domestic gross so far.

If movie studios are so secure about their product, maybe they'll just release all that NRG trending consumer research data they monitor every day for six weeks before a movie is released -- and let the public decide.

High-awareness levels by consumers, but low "intent" or "first choice" for actually viewing the movie? Maybe that's not a film I want to see.

Would a movie futures index help or hurt people in their decisions -- especially movies where there are only fast-moving, very select scenes in TV trailers to consider?

I'll decide on the value of that data. I vote for more information.

movies, tv

3 comments about "Ban Of Movie Futures Biz Really Ban On Public Info".

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Bruce Friend from OTX, June 28, 2010 at 2:27 p.m.
The problem with this argument is that if a movie trended high or low on one of these exchanges, it wouldn't mean that the movie was necessarily good or bad. It would only mean that those investing would expect the movie to deliver a strong opening weekend, or not. A lot of great, critically acclaimed, movies come out that people don't see, while a lot of bad, critically panned, movies come out that lots of people do see. Truth is, most people by in large like movies that critic often think are bad.
What OTX, NRG and Marketcast track is how movie-going CONSUMERS (not critics) are responding to the Movie's pre-release marketing campaign and the buzz that is generated from that campaign and other sources. And that data, despite what the press may say, tends to be highly predictive of box office about 90% of the time (and yes, I have the results to prove that).
So, if companies like OTX or NRG did give their data to the consumer, it would only reinforce to them what they already know and plan to do with respect to seeing the film opening weekend or not.
However, if people investing on movies in one of these movie exchanges got their hands on this data (which would be inevitable, no matter how hard we and our clients try to keep the info proprietary), that would surely give them an unfair advantage over those who didn't have this data. This doesn’t even take into consideration the massive amount of market manipulation that could occur with setting different expectations for the film. Reading tracking is a highly specialized skill and a misread of the numbers that leads to an inaccurate estimate WILL impact the market price.
I don't know about anyone else, but I saw the movie, Wall Street (and am looking forward to the sequel), and I learned that greed is NOT good. These exchanges are just one more way for the greedy to get richer, and fortunately our Government recognized that!
Reply

Suzanne Sell from Independent, June 28, 2010 at 5:13 p.m.

Too bad for both of us, Bruce--I was planning to use your data to make some bucks on the exchange! (Mostly by betting on the movies we know will draw audiences despite the fact that they're derivative or senseless.)

Stanford Crane from NewGuard Entertainment Corp, June 28, 2010 at 6:09 p.m.

I'd like to suggest we leave Wall Street to do what it was originally intended to do, be a capital market. Having an ex-wife who was on The Street showed me that more often than not, it is a gambling casino which contributes little to society at large. Do they get capital to start new companies, the only engine for job growth in the new normal? Nope.

Let's leave the comments on films to Fandango and the various movie sites, but not to Wall Street. I heard that Knight and Day was bad, from some critics, but my partner, a 30-year Hollywood vet said it was fun. He was right. I didn't need a market to tell me that.