The financial company behind an online movie fantasy game is aiming to license its software to entertainment companies around the world and has hired a Toronto-based firm to tackle the Canadian market.
New York City-based Cantor Fitzgerald created the Hollywood Stock Exchange (HSX) in
1996 as an online community where movie fans and pundits can buy virtual stock in actors and films and speculate on their bankability.
Earlier this summer, the company rebranded the software engine that powers the exchange as “Virtual Specialist” and will be reselling it as a white label solution through local dealers.
In Canada, the Cameron Thompson Group will be carrying the product. Company president Ron Thomson said he plans to take it to every major media outlet in Canada – “all the usual suspects,” as he puts it – and has already received some interest.
The appeal of HSX lies in literally investing in pop culture, he said, and seeing some genuine results.
“You can trade on George Clooney’s popularity based on whether you think his stock will rise or fall. You can actually short his stock. I could sell Julia Roberts at $23.50 and buy George Clooney at $16.70. It’s basically kind of a virtual stock exchange,” he said.
HSX has “taken the APIs for that and opened them up so they can be deployed on a number of different applications. It’s really the ability for us to license Virtual Specialist internationally.”
It may be a fun diversion for movie fans, but the end result of all those predictions is valuable data. Based on stock speculation, the HSX came within one per cent of guessing the opening weekend gross of the most recent Star Wars movie. It was also 100 per cent accurate in predicting this year’s Oscar winners.
“The more your active traders, the higher your sample your size, the more powerful the result,” explained Thomson. “With enough traders trading, it results in a very accurate forecast of what’s going to happen.”
The technology could be applied to other media outlets, said Thomson, or any market with a groundswell of fan support like sports leagues or franchises.
“It’s measuring consumer behaviour,” said Michael Goodman, an analyst with the Yankee Group. “Clearly anything entertainment related is very closely tied to consumer behaviour: grosses, the likeability of movie stars and how you’re going to react to them in different movies.”
In theory, the engine that drives HSX could be applied to any commercial enterprise or consumer, he said, but it may have found its niche with the Hollywood industry. Sports fantasy leagues are already driven by statistics; the likeability of individual players or their level of visibility in the public consciousness is less important than their ability to score goals or hit homeruns.
“Maybe there is a way to adapt this where you can find the hidden gem, but fantasy sports in general is driven by actual output. Your player is either hot or they’re not hot,” he said.
HSX is an exercise in entertainment where no real money is at stake, but even the idea of winning phony bucks is enough incentive to generate interest, said Thomson. The popularity of online gambling and the poker craze of the last few years has given rise to the idea that anyone can make something out of nothing.
“The idea of fantasy and guessing and wagering is something that’s more permissible in society today than it was 20 years ago,” he said.