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Is Hollywood Shooting the Messenger?

Trendex wants to trade futures on coming Hollywood movies. Hollywood opposes this new product.

"Betting" sites like Intrade bring clarity and transparency to events, such as the likely outcome of political contests. The reason why it works is because people put their money where their mouth is. When real money is on the line, the quality of opinions tends to improve.

Most Hollywood films lose, rather than make money. In order to attract investors, therefore, it behooves producers to give them a way to hedge their bets. This is what TrendX would do. It is really a hedging product, rather than a form of gambling. But Hollywood opposes it on the grounds that it would hurt their image to be associated with a gambling product.

Hollywood may be genuinely confused. It's in their financial interest to let this product go forward. As was proven by a genuinely bad product, subprime loans, the quantity of the product skyrocketed when there was a resale market. On the other hand, Hollywood may want to maintain a monopoly of information on its own products.