Emergic: Rajesh Jain's Blog

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Hollywood Stock Exchange

November 23rd, 2003 · No Comments

NYTimes writes about HSX.com:

[There are a] million people who have traded on the Hollywood Stock Exchange, where players can register at no cost to predict box office receipts for films. For [them], it’s a game, and it’s fun.

But for Hollywood studios and entertainment executives, along with real traders and others, the game has become something to take quite seriously. Studios, along with academics, are interested in it as a way to predict which movies will succeed. Traders are working to turn the concept into an actual financial market, like those for futures in corn, oil and other commodities. It has also served as the model for a television show merging trading and music.

All this interest revolves around a fantasy game that allows online players to trade “securities” whose prices forecast the first four weeks of box office revenue for new and yet-to-be-released films. Late last week, traders could “buy” stock in “The Cat in the Hat” (released on Friday), at $130 a share, meaning that the market expected four-week box office receipts of $130 million. Or they could buy “Spider-Man 2,” due for release next May, at $235 a share, or even “Spider-Man 3,” which has not yet been made and won’t be released for years, at $87.

The exchange’s appeal lies in the premise that the collective wisdom of large numbers of traders can most efficiently determine the value of properties that would otherwise be hard to assess.

HSX started in 1996 – I had loved the concept when it was launched. It had even inspired me to set up a stock exchange for Indian politics (at the time of the elections). It would be nice to actually build something similar once again given that the elections are going to be held in India next year.

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