Betting on the box office

Betting on the box office

Hm.  I’m not a betting person…really.  Oh, I love to make predictions, and I love to do well compared to other people with those predictions.

But I don’t bet money on it.

Why?

I like to play games…always have.  I even managed a game store for a while…wow, was that fun!

I always figured if I got into gambling, I would do it too much as a game…and lose track.

This recently-approved by the Feds (but possibly prohibited in upcoming legislation) venture is…interesting.

You would buy shares in a movie, and get a pay out based on the opening weekend gross.

The plan is that it would be a dollar a million.

Let’s say that the market thinks a movie will make thirty million dollars opening weekend.  You, though, think it will make fifty million.  You buy it at thirty: if it makes fifty, you profit $20.  If only makes twenty million, you lose ten.

Sounds like gambling, right?  Well, that part’s apparently okay, because it is a “futures market”.

However, the studios hate it…and I totally understand that.

People figure movies make money in competition…a movie doing well can make another movie do poorly, since it sucks up some of the ticket money.  Oh, a movie can get a lot more people to go to the theatres period, but sometimes, one does better because people chose it over another movie.

That means that people could be seriously financially invested in your studio’s movie failing.

What if you bet ten thousand dollars?  One hundred thousand?

You think it would be worth trying to get bad word of mouth out there?  Having people tweet and post that the movie was awful?

Remember, we’re only talking about the opening weekend.

People may bet on movies now, but it’s probably pretty penny ante.

Also, what if studios bet against their own movies, as a hedge?  If it looks like a movie is going to tank, it might be worth completely sinking it…if that’s where your money was.

My tendency is to approve legalization, even of things I don’t like. 

We’ll see what happens with this. 🙂

The Week article

This post by Bufo Calvin originally appeared in the The Measured Circle blog.

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