Tucked inside the controversial but long overdue financial reform bill that passed yesterday was a clause that will mean a lot to the movie industry.
The hot disputed box-office futures market that had been set to launch this summer — in which investors could buy and trade shares in upcoming movies based on their predicted performance — was unambiguously killed dead.
It made pretty much everyone besides the companies who’d spent time developing and promoting it happy. Worries about insider trading or attempts to sabotage a movie’s values through manufactured negative word-of-mouth had become prevalent. (One thing you can say for the studios right now: at least they don’t try to undercut each other, only their talent.)
The only argument that seemed to really speak to futures market’s merits was the idea that independent films could find a new form of financing — and that the MPAA is so fearful of losing industry control that they shut it down on disingenuous terms.
It’s hard to picture futures-trading types scanning Sundance 2011 applicants with an eye towards buying an unstable stakes in them instead of just investing their money. Even the liberal muckrackers over at Mother Jones didn’t like the idea. They singled out the main industry supporter of the plan — Lionsgate vice chairman Michael Burns — as both the co-founder of the Hollywood Stock Exchange, which was one of the companies trying to make the leap from theoretical to real money, and a longtime Ayn Randian, which apparently means he shouldn’t be trusted.
When the MPAA and Mother Jones are on the same page, it’s probably time to call it a day.
While the demise of the Hollywood futures market comes as no great disappointment to me, I did dig the concept, or at least that I’d lived long enough to see it. Movies are commodities, and their production and marketing is Monday-morning-quarterbacked to death. We live in a world where civilians with no specialized knowledge feel perfectly qualified to speculate online as to whether a studio’s release date/poster/trailer are “smart.”
Also, the stocks of companies (or, more accurately, their conglomerates) do sometimes fall before the release of a movie predicted to do poorly and rebound if they succeed. The futures concept would just remove the big picture and focus solely on one film. Anyone who follows the box office knows this stuff; everyone’s perfectly capable of lambasting a studio’s marketing and production while liking a movie, and getting agitated about both separately.
Box office futures may have been a bad idea, subject to manipulation and needless volatility. But it’s nice that someone got out there and finally said what everyone was thinking. Movies are nice and all, but to validate their place in American life, they needed to have a separate index to evaluate their worth strictly as commodities. Because the way things are going, how would that not be true?
[Photos: “Wall Street,” 20th Century Fox, 1987; “American Madness,” Sony, 1932]