Thursday, 11 March 2010

Hollywood Babble On & On #468: The Future Is Now?

Welcome to the show folks...


Investment firm Cantor Fitzgerald has announced that they're planning to open a Hollywood box office futures market. For the uninitiated a box office futures market is where people can put money in on whether or not a film will make it or break it in ticket sales.

Now this bugs me in a hell of a lot of ways, so let me count them off for you.

1. People are calling this an "investment." I beg to differ. You see, to me, a real investment means that you are putting your money into something in order for it to have the necessary capital to succeed and you make a profit from that success. Investment is essentially an act of creation, even if all you're doing is helping someone pay for creating something.

This sort of "investing" with no real input into the film's success or failure isn't really an investment, it's a bet. You're pretty much doing the exact same thing when you put your chips on a roulette wheel in Vegas.

Now some folks are going to say that it's not as wild and wooly as real gambling, because where no mere mortal can predict where the roulette ball is going to land, movies have lots of information available about them. Their argument is that a knowledgeable investor can look at that information, and mitigate their risks, even to the point of betting against certain films.

Which brings me too...

2. Your success can come from the failure of others. You see in real investing you win when everyone involved wins,
no one has to lose anything. When you're placing bets that a film will flop, well, that film has to flop in order for you to succeed. Now I'm not talking about the inherent riskiness in picking success or failure, no matter what the analysts say, instinct almost always trumps their so-called science. What I am talking is when those who bet on failure, try to insure their investment.

Do you catch my drift?

Okay, let me put it in the form of a movie pitch.

Picture it, a studio president of production is pissed that he's been passed over for promotion to CEO in favor of the parent company's CEO's nephew. So he starts buying up futures that some of the studios biggest productions will flop. He then takes those pictures away from the people making them and butchers them in the editing room. Making stories incoherent, replacing CGI with cardboard cut-outs, and inserting musical numbers performed by MC Hammer in their serious historical costume dramas.

He keeps his changes a secret, as well as his betting, and makes sure his pet analysts hype them as the second coming of
Avatar. Then he watches the films tank when the shit hits the fan, and pockets a hefty payout, including a fat golden parachute if he gets caught.

I call this script:
The Great Beverly Hills Blockbuster Boondoggle.

Now I know my pitch is far-fetched, no studio president has that much imagination, but it makes my point: Give people a chance at making money off someone else's failure, and they will do everything they can to insure that failure.

And let's not forget...

3. The tyranny of the analysts. Right now box office analysts have an inordinate amount of influence. Not so much on the real success or failure of a film, but on the
perceived success or failure of that film.

If an analyst predicts a $20 million opening weekend, and it only makes $19,999,999.99, that film is immediately perceived as a failure, and treated as such. Especially when it comes time to pay off the back-end shares. And if the film makes $20,000,000.01, it's hailed as the next best thing to

So the temptation to manipulate the predictions of these analysts, to both low-ball and high-ball possible earnings is immense. It will only get worse when every Tom, Dick & Harry starts playing this game, taking everything they say as the gospel of Jimmy The Greek, and betting accordingly. Control the analysts, and you can control this market, that's a recipe for trouble.

My advice, get out of these crack-pot schemes, which were one of the key reasons the economy had its meltdown a while back, and go back into investing into concrete things, like concrete, or plastics, or something being made, and not just bet on.


Paramount has revealed the name of its new micro-budget division that hopes to make films for less than Ben Stiller's annual back & chest waxing budget, and that name is INSURGE PICTURES.

Personally, I'm not sure what to make of this name.

It implies energy, rebellion, and reaching for heights, but in recent years has been tacked onto "insurgents" who like to set off bombs in schools and crowded street markets. I hope Paramount knows what it's doing, and intends to reclaim that word from those who have misused it.

I also hope that it intends to follow the advice I wrote when word of this project first surfaced. Those words of wisdom contain all Paramount needs to know about how to turn this project from an experiment into a success. You can bet on that.

No comments:

Post a Comment