
A Futures Site Coming to Bet on Movie Ticket Sales - unignorant
http://www.nytimes.com/2010/03/11/business/media/11futures.html?ref=technology
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chasingsparks
_"If the distributor shorts a $100 contract and the movie grosses $50 million,
the distributor will make $50, thereby limiting the company’s total losses
from a film."_

From what they have said, this does not sound like a viable hedging strategy
for those in production. There is unlikely to be enough contracts traded.
Instead, it seems more like a gambling operation with a CFTC gambling shield.
I'm surprised they did this, given how much general anger there still is
regarding derivatives and speculation.

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steveplace
The two differences between financial speculation and gambling are your odds
and whether you wear a fancy tie.

The odds are the more important one. If you can make statistical methods that
show the risk of loss, you can then assign a premium to that risk and put it
on the market. Whether it will get enough liquidity to get past the smalltime
remains to be seen.

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ericwaller
At least in NY state, the exact odds and payouts are published. So you can
certainly assign a premium to the risk involved, and you can do so exactly.

But since everyone knows the odds, the lotto market is perfectly efficient and
no one can win in the long run -- this is what makes it gambling.

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jsm386
I remember playing the old Hollywood Stock Exchange (non-cash version) back in
middle school. This seems like a fun idea, but how do you rule out the heaps
of insider information that exist?

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bryanh
I am curious if the technique described in this paper
(<http://www.cam.cornell.edu/~sharad/papers/searchpreds.pdf>) would give an
advantage over the long run. I would imagine that if the majority of bets are
placed for entertainment value based on guesses, this could be a quick way to
rake in some dough.

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mhb
Seems like Netflix might have some insight into this market.

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Aron
Definately. 12M Customers can add movies to their queue prior to it even
coming out at the theater. I would wager this is substantially predictive.
Netflix could either bet themselves, or as perhaps more likely, sell this
information directly.

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jasongullickson
This will certainly have a positive impact on the quality of films coming out
of Hollywood.

