Have you ever just known a much-vaunted movie was going to be a stinker? Or you picked a gem that turned out to be a huge hit? Well, now you get a chance to be an industry executive and profit from your wisdom. In a similar vein to yesterday’s post on How to Invest in Facebook and Twitter even though they’re not publicly traded, I came across an interesting business plan that will allow you to invest in the future success of movie releases. There are a couple companies vying for this piece of the action, but the most proximal decision from the Commodities Futures Trading Commission will come on April 20 in regards to Cantor Fitzgerald’s “Domestic Box Office Receipts Futures Contract”. Each $1 million change in box-office revenue will increase a contract by $1.
Imagine if you got in on Avatar early, right?
Apparently, film industry execs aren’t pleased with the service because, in my opinion, they don’t want the horrid market performance of their duds to get out before suckers fork over the money to see them. Think about how many horrendous movies we’ve all been to (especially those with young kids) because of a great trailer and heavy promotion. Sometimes the best critics get it wrong too. Next thing you know, you’re watching Mission Impossible 2 while your wife’s staring at you shaking her head – for the entire movie! The market may be a better arbiter of future success than individuals.
As long as these futures exchanges are facilitated well and there’s enough volume and liquidity to keep the spreads to a minimum, I love the idea. For some time, I’d been participating in the InTrade Futures world events; I’d previously bet against US/Israel bombing Iran’s nuclear facility, I didn’t think we’d find Bin Laden (not that I wouldn’t love to be wrong) and I’d bet against earthquakes. Pretty interesting stuff you can hedge against (“bet”), but Intrade isn’t governed by the same rules and I sometimes had issues with wide spreads.
And by the way, right now Sarah Palin is listed as having a 25% of getting the nod for Republican nominee in 2012.
Are you kidding!?!
If you like learning about unconventional investment opportunities like this, check out my category on Alternative Investments.
I’ll update on new developments in this Movie Futures Space, so Subscribe Free to stay up to date.
If you enjoyed this post, you can get free updates through RSS Feed or via Email whenever a new post is published. Rest assured that you can unsubscribe at any time via the automated system and your information will not be sold, archived or utilized for any other "nefarious" purposes.