Hollywood futures

The Hollywood Stock Exchange is a kind of online game where "traders" use $2 million in play money to make box office predictions for upcoming movies. Turns out that several movie studios use the trades in making advertising and promotion decisions. Here's how it's described in Business Week Online:

Hollywood may be ahead of a trend this time. Companies in other industries are just starting to use similar markets, called prediction markets, to let workers place bets on future events such as sales and product launch dates. The exchange even offers a service to help companies outside the entertainment industry set up their own prediction markets. Pharmaceutical and technology storage businesses are currently using the service.

In the film industry, it can take years between when a film begins development and when it is released in theaters. But films can also hit the Hollywood Stock Exchange two years before they are released. For example, long before "Pirates of the Caribbean" started playing in theaters, the Hollywood Stock Exchange knew it would have broad appeal.



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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
 
Mark Lacter, business writer and editor was 59
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