Cantor Fitzgerald, the Wall Street investment house, is reportedly harbouring plans to make its ‘Hollywood Stock Exchange’ fake money spread-betting game a reality, offering investors the opportunity to make real-money bets on the financial performance of films.
Though the concerns around this are far beyond the movie world – insider trading likelihood, expanding the volume of risky products at market etc. – this could likely have some serious consequences for the quality of movies that come out of Hollywood.
Studios are already overly-focused on money-making in the films they release. This is not necessarily a negative; movie-making is a business and all movies, all of them, are not made with the aim of losing money. But the skewed view which has been fostered in Hollywood is that bigger is better or, more expensive is better. Blockbusters like Transformers 2 and Avatar, and before them the superhero and comic book adaptations, have become the central currency of Hollywood.
Audiences have been conditioned not to see films because of the talent behind them, but because of what the film is about. This has driven the growth of the wide universe of films based on existing properties (superhit children’s books, superhero comics) and has caused nothing but problems for the auteur-based projects out there. Even when you see an anomalous hit (Inglourious Basterds and District 9), this seems to have almost no influence on what kind of movies are coming out of Hollywood. They continue to operate on the assumption that the more money you spend, on production and marketing, the more money you will make at the box-office.
It’s hard to argue that this isn’t normally the case, though the reason that these films do so well is never down to the quality of the product. The behemoth summer releases are scattered across the season in a bid to make sure that, essentially, there is no other choice for the passive movie-goer. When they turn up at the cinema looking to see a film, there is a good chance that Transformers will be on in five of the twenty screens at their local multiplex and probably starting every half-hour or so. What we snobby critics and cinephiles would describe at the ‘worthy’ releases get relegated to sparse showings at inhospitable times of the day, or are just ejected from multiplexes altogether, meaning that casual watchers, those who really drive up box-office, don’t see them through a combination of inconvenience and ignorance.
Should this Cantor plan come into play – and any improvement in the economic environment and return of confidence to investment markets would make this almost inevitable, if only in germ form at first – it would surely only encourage studios to focus on huge movies, placing all their available energy into the tentpole releases so as to make them as profitable as possible. There is a chance that this could well mean that studios take more notice of aspects like script, character and direction if they do this, therefore maximising the change of turning a profit. But the incredible success of Avatar, for all its qualities, would, I venture, communicate to studios that big and simple is the best way to go. Unfortunately, the component they would fail to note would be James Cameron (or, The Talent) which is what actually turned the film into something special and successful. Chuck a journeyman behind the camera and Avatar would have fallen into the annals of flop history.
In addition, making a spread-betting market for movies would instantly shift the business aspects further to the centre of investor thought, meaning that any concerns over the quality of movies would become further sidelined (check out this Raw Story article on the news). Through neat trickery, brokers would be able to shift enough money around that even bad or unsuccessful movies become profitable, something which would remove that consideration in the minds of executives to make films, you know, ‘good’.
This is all conjecture at this point. It could well be that studios will become more cautious with budgets and spread marketing spend across their properties to achieve profit from all releases. The drop in production budgets could well have the influence that so many wanted District 9 to have this past year in making directors have to improvise and get creative due to constraints in what they can do. Plus, spreading around marketing budgets would give many independent films a significant boost in the amount of money they have to promote themselves. It’s possible that this could be a hugely positive move for the quality of output in Hollywood.
Of course, the actual problems with this lie in the risk profile of such investments, so whether the quality of films coming out of Hollywood will rise or fall will be of little concern to financial regulatory authorities. Still, worth a thought as to whether a shift in the financial model of Hollywood could prove good or bad for the industry, because heaven knows the current model is resolutely failing to promote everything equally and has skewed the focus from art to business.