The online faux-trading company is actually affecting how moves get made and sold

By Judith I. Brennan
Updated September 25, 1998 at 04:00 AM EDT
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Using the stock market to decide how to promote a movie? Sounds like prime idiocy, given the scares of recent weeks. But The Hollywood Stock Exchange dearly wants to make a dent in how the film industry does business, and early indications are that it’s making some headway. Does it matter that this Web game’s based on funny money if it can affect how movies get made and sold?

Since launching in 1996 at http://www.hsx.com, this showbiz variant of Rotisserie League baseball has attracted well over 100,000 regular players, both within the industry and around the world. Traders track movies from cradle to grave, gambling on stars, story concepts, and playability. Own Robin Williams bonds? Lucky you: The upcoming What Dreams May Come, the star’s first major role since winning a Best Supporting Actor Oscar for Good Will Hunting, has helped boost his value to an all-time high of $2,184.

Plenty of industry players are playing. Says New Line Cinema VP Steve Elzer, ”Of course I invest in all New Line movies, and thank God for insider trading! It’s an industry toy that’s now transcending New York and L.A.” And beyond the active traders, studio honchos, talent agents, and publicity reps are watching the site closely. Which raises a few questions. Like, does the Exchange affect a movie’s development process, with casting fluctuating on market mood swings? Is it altering promotional decisions?

Yes and yes, insist the creators of the Exchange. ”We are the market for determining a star or a movie’s playability,” claims HSX president David Herman. Granted, his big hope is to turn this Santa Monica-based venture into a lucrative market-research tool for the studios. And some in Hollywood are willing to play along. ”To the extent it reflects real choices and viewing habits, a marketing executive takes that seriously,” says New Line’s Elzer.

Clearly, the Exchange’s influence is limited to the digerati for now. Says PolyGram Films marketing chief Peter Graves, ”It’s a nonscientific tool that targets a specific, narrow segment of the overall moviegoing universe — the techno-cinephiles who live and breathe the Internet.” And many in the industry openly scoff at the notion that a ”hot stock” on the Exchange will ever influence any studio decisions. ”That’s dumb,” says Tom Sherak, chairman of Twentieth Century Fox Domestic Film Group. ”Movies cost too much.”

Yet things could change. Hal Lieberman, a former Universal studio chief-turned-executive producer on the upcoming WWII U-boat saga U-571, is receptive to using the site in casting considerations. ”You’d be a fool to be dismissive of this as a tool,” he says. ”But I wouldn’t base my final vote on it.” And for now, the Exchange is unbeatable for handicapping awareness of a film: For example, the long-awaited Eyes Wide Shut, directed by Stanley Kubrick and starring Tom Cruise and Nicole Kidman, has been one of the top five most-traded stocks in the last year and a half, a factoid that Warner Bros. is probably quite happy to know even if, as a spokesperson says, the studio has taken only a passing look at the site.

”Wait until our base of traders hits 750,000,” gloats HSX’s Herman. ”Then they’ll take notice.”

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