Ten years ago, I was working in an office on Wall Street with a small group
of writers called the Teenage Mutant New Media Turtles. Officially, we were
writing economic commentary for high net worth individuals to subscribe to on
the internet. Unofficially, we spent a large part of our day trading movies
on the Hollywood Stock Exchange. It was one of
the most addictive websites any of us had ever seen, and of course, being New
Yorkers, we all got very competitive. What’s more, because movies got listed
long before they were released, the site was great at building anticipation
about forthcoming flicks.
Fast forward to today, and Chris Masse of Midas Oracle has republished a great
piece by Trader Daily’s Robert LaFranco on the rise and fall of HSX.
One of the founders is now the CEO of LionsGate; the other is a movie producer
in Paris. HSX is still going as a website, having been snapped up for almost
nothing by Cantor Fitzgerald after burning through $40 million during the dot-com
bubble, but it never really got traction within Hollywood. Its predictions for
opening-weekend grosses are as good or better than anyone in Hollywood’s, but,
a decade after it was founded with the intention of becoming a real trading
site, it still hasn’t managed to clear all the regulatory hurdles needed
to allow people to trade real money. (Meanwhile, InTrade
experimented with its own section for opening-weekend grosses, but it failed
because you couldn’t trade the gross itself, only the question of whether it
would come over or under a certain point, which gave the market much less predictive
power.)
Sooner or later, it seems, Cantor will finally start monetizing HSX and will
get into the business of entertainment futures. But this is a cautionary tale
for anybody with a dream: good ideas alone are only the beginning. Even with
millions of dollars and a hugely popular website, dreams can and will often
end up failing.