BetFair Predicts is paying a social media consultant.
The Hollywood Stock Exchange / Cantor Exchange is paying a community service provider.
HubDub’-s community services are performed in house.
Should community building be a core constituent of a prediction exchange? I’-d say “-yes”-. It is not something to outsource.
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Previously: Cantor Exchange
Previously: Should the Hollywood Stock Exchange become a real-money betting exchange? – 2007-10-04
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Cantor Exchange
http://www.cantorexchange.com/ —- A twin site of the Hollywood Stock Exchange.
Here are my early thoughts about the “-Cantor Exchange”-. I regret to say that their “-Cantor Exchange”- website does not seem very usable. (I hope it is not a bad omen.) It is impossible for me to copy their explanations posted on their webpages (other than the 2 press releases) and to republish that material in this post.
The second thought that comes to my mind is that their offerings are not standardized (their event derivatives are described in HSX lingo), and I wonder whether the real-money traders, who are accustomed to dealing with the CME, the NYSE, or InTrade, but who are not familiar with HSX, will make the effort to adapt. We will see. (I don’-t think that the HSX play-money traders will go speculating on this real-money prediction exchange.) The collateral question is, why would the Cantor Exchange (a brand-new exchange with not a single trader, as of today) be better positioned to organize event derivative markets on movie business than, say, HedgeStreet, InTrade, BetFair, or even the CME? Obviously, Cantor Fitzgerald (a bond broker) are thinking that they can leverage their Wall Street clientele and the HSX population to branch out and start up a brand-new, CFTC-regulated, real-money prediction exchange. It’-s quite a big bet. I say “-branch out”- because starting off a real-money prediction exchange (Cantor Exchange) is quite different than running a play-money prediction exchange (HSX). Just look at how difficult it has been for HedgeStreet, which started off in 2004, and escaped bankruptcy in 2007 thanks to their rescue by IG Index. After 4 years, HedgeStreet is still not profitable, and it will probably take more years before it turns the first profit. Let’-s wish a better future for Cantor Exchange.
I will update this present post, later on, linking to the reactions from the media and the blogs. (Cantor will be holding a conf call this Tuesday, so some media coverage will pop up over the next days.)
Here is a Financial Times news article, which won’-t tell you much more than the 2 press releases re-published below.
Here’-s Variety.
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Press releases:
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CANTOR ENTERTAINMENT TO ANNOUNCE MOVIE BOX OFFICE CONTRACTS
TO MOTION PICTURE INDUSTRY AND INVESTOR COMMUNITY
Cantor Fitzgerald Files Application for Domestic Box Office Receipt Contracts
Los Angeles, CA- New York, NY – (December 8, 2008) – Cantor Entertainment, which provides various services to the entertainment industry and owns the Hollywood Stock Exchange, is pleased to announce that Domestic Box Office Receipt contracts will soon be available to the motion picture industry and investor community. Cantor Fitzgerald, its parent company, announced earlier today that it has filed an application to launch the Cantor Exchange, whose first listed product will be Domestic Box Office Receipt contracts.
Domestic Box Office Receipt contracts will offer film finance professionals and traders a new opportunity to hedge and speculate on the theatrical performance of wide-release Hollywood movies. Domestic Box Office Receipt contracts will be a next generation film-financing tool that allows market participants to hedge risk and provides them profit opportunities based on the first four weeks of a film’s box office revenues.
“It’s clear from our conversations within the industry and investment community that there is a tremendous opportunity to introduce this exciting new tool to complement existing film financing alternatives. The market for Domestic Box Office Receipt contracts offers the motion picture industry, investment funds, banks and all other prospective investors a federally regulated trading exchange dedicated to the entertainment industry,” said Andrew L. Wing, President and Chief Executive Officer of Cantor Entertainment. “Our involvement in Domestic Box Office Receipt contracts reflects our continuing commitment to expand Cantor Entertainment’s numerous services in the entertainment industry.” The first Domestic Box Office Receipt contract is expected to be listed on the Cantor Exchange in the first quarter of 2009. Cantor Exchange is subject to final approval by the Commodity Futures Trading Commission (“CFTC”).
About Cantor Entertainment
Cantor Entertainment, a division of Cantor Fitzgerald, L.P., provides services to the entertainment industry. Cantor Entertainment also owns the Hollywood Stock Exchange (www.HSX.com), the world’s leading virtual entertainment stock market.
About Cantor Fitzgerald, L.P.
Cantor Fitzgerald is a leading global financial services firm. The Cantor Fitzgerald franchise includes institutional equity and debt sales and trading, investment banking, private equity, as well as other businesses and ventures. For over 60 years, Cantor Fitzgerald, a proven and resilient leader, has been committed to delivering a unique brand of unparalleled product expertise, innovative technology and customer service to its clients around the world. For more information, please visit www.cantor.com.
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Cantor Fitzgerald Announces Application for Cantor Exchange
Domestic Box Office Receipt Contracts are Expected to be First Contract Market
A New Tool in Film Finance
NEW YORK–-(BUSINESS WIRE)–- Cantor Fitzgerald, L.P., a leading global financial services firm, announced today that it has filed an application with the Commodity Futures Trading Commission (“CFTC”) to launch the Cantor Exchange. Cantor Exchange intends to list Domestic Box Office Receipt contracts as the exchange’s first traded product.
“The Cantor Exchange and our intention to list Domestic Box Office Receipt contracts reflect our continuing commitment to innovation in the finance and entertainment sectors,” said Howard W. Lutnick, Chairman and Chief Executive Officer of Cantor Fitzgerald.
Subject to final regulatory approval of the Cantor Exchange application, Domestic Box Office Receipt contracts will offer film finance professionals and traders a new opportunity to hedge and speculate on the theatrical performance (ticket sales) of major film titles. Domestic Box Office Receipt contracts will be a next generation financial management tool that allows film professionals to hedge risk and provides speculative opportunities to other market participants based on the first four weeks of a film’s box office performance.
The first Domestic Box Office Receipt contract is expected to be listed on the Cantor Exchange in the first quarter of 2009, subject to final approval of the Cantor Exchange application by the CFTC.
About Cantor Exchange
Cantor Exchange is launching the first trading platform based on movie box office revenue, and expects to begin listing Domestic Box Office Receipt contracts in the first quarter of 2009, subject to final regulatory approval. Cantor Exchange is a division of Cantor Fitzgerald, L.P., one of the world’s leading financial services firms, and is partnered with Cantor Entertainment, another subsidiary of Cantor Fitzgerald, which provides services to the entertainment industry and owns the Hollywood Stock Exchange® (www.HSX.com), the world’s leading virtual entertainment stock market.
About Cantor Fitzgerald, L.P.
Cantor Fitzgerald is a leading global financial services firm. The Cantor Fitzgerald franchise includes institutional equity and debt sales and trading, investment banking, private equity, as well as other businesses and ventures. For over 60 years, Cantor Fitzgerald, a proven and resilient leader, has been committed to delivering a unique brand of unparalleled product expertise, innovative technology and customer service to its clients around the world. For more information, please visit www.cantor.com.
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UPDATES WILL BE POSTED BELOW, LATER TODAY (AND DURING THE NEXT DAYS)…-
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[T]he initiative is not for an application for a product extension of HSX. Rather it is an application for the launching of a new futures market, the Cantor Exchange, which will list Domestic Box Office Receipt Contracts. The contracts will also be known as Movie Box Office Contracts.
There are some similarities with HSX in that Movie Box Office Contracts are modeled on the MovieStock methodology of our site. For example, the contracts will be based on four weeks of a film’-s domestic box office revenue. The regulatory approval process is inherently uncertain, so it’-s a bit premature to say we are moving into real-money film trading markets just yet, but that is our intent.
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That is from Alex Costakis, MD of HSX.
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Here’-s the Cantor Exchange project leader: Richard Jaycobs.
He seems to be a man open to suggestions.
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CNBC on Cantor Exchange —- Via Jason Ruspini
Fox Business on Cantor Exchange –-
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Financial Times:
All eyes on Hollywood futures
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Previously: Should the Hollywood Stock Exchange become a real-money betting exchange? – 2007-10-04
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These traders are talking down the newly redesigned Hollywood Stock Exchange website.
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[They guy above has misspelled, two times. He meant: “unusable“.]
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Previously: #1 – #2 – #3 – #4
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UPDATE: Traders talk on Twitter about HSX.
Thanks to the HubDub guy for the tip.
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Whiskey Kilo (a Hollywood Stock Exchange trader):
Change is one thing, breaking the whole site and acting like its nothing happened is another. The whole concept of trading movie stocks, movie bonds and options have taken a backseat to making sure you can blog, add friends, and “Schmooze”.
The old portfolio page was color coded and extremely easy to understand, you instantly knew if you were making H$ or losing your shirt. Now the current portfolio page is a small box, one colour, light grey on a white backround and the type is half the size of the font here, also you can only see 12 stocks at any given moment. Whoever OK’d this part of the site has to have never traded any shares online before.
From what I can gather, there was a beta version of this 3rd generation of the game, but no one paid any attention to the any of the feedback, two days after this new rollout, HSX.com started calling this new version a beta game, and what HSX staff there is say that portfolios are now their priority. However the only things that really work right now are the blogs, which pay H$10,000 a posting, adding friends pays traders H$1000, Online Polls, and Schmoozing. which paid initially H$1000, but now pays H$100 per reply. The only reason I see for paying traders to blog is to bring more eyeballs to the garish 728?90 and 300?225 ads on each page to pump the number of advertising views on HSX. But if this is part of the grand scheme here, I can’t see Gold coin or Forex advertisers closing sales from a bunch of 13 years because all the veteran traders have left in disgust.
I welcome Jed [*] to read the HSX Support page: http://www.hsx.com/cms/forums/support and look around, I shudder to think this all is going to be a B-School case study on how to kill a successful site in under a week.
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[*] Jed Christiansen, who put up a comment in defense of HSX (Jed systematically defends the people I slam on Midas Oracle) —-and who has just begun an MBA education.
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HSX-sucks.com —- I predict that somebody will soon register this domain name.
Many HSX event derivative traders have complained to me privately about the website redesign: they hate it more than they hate the recent financial bailout. One HSX trader went off on the Prediction Markets group discussion area at LinkedIn. Today, another HSX trader is writing a long prosecution of the HSX website redesign. Read it in all, and spot the many comments at the bottom, from fellow HSX traders.
The root of the problem is Alex Costakis —-the director of HSX. My assessment of him is that he doesn’-t get the Web. He is as clueless as a maggot trying to play Jazz. He is not an open person, and the Web is all about openness. This guy is a drag on HSX. I predict he will lead to HSX’-s death.
The only 2 persons that could lead to a revival of HSX are Max Keiser or Nigel Eccles. Let’-s hope that Cantor Fitzgerald will call them for help.
UPDATE: See the comments.
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Because HubDub is the only prediction exchange whose prediction market webpages are indexed highly by Google.
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That query leads to that prediction market webpage.
That query leads to that prediction market webpage.
That query leads to that prediction market webpage.
That query leads to that prediction market webpage.
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In the 4 cases above, you can spot HubDub in the top 10 Google results.
I speculate that HubDub is going to harvest hundreds of thousands of Google visits in the next 12 months.
Which is probably higher that the BetFair blog will get from Google —-and there is a low conversion rate (from the BetFair blog to the BetFair prediction market webpages), probably. With the HubDub model, the conversion rate is always 100%.
Nigel Eccles, this time, I am impressed.
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Previous blog posts by Chris F. Masse:
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Freakonomics:
July 22nd,
2008
4:47 pm
I am producing the Freakonomics documentary, so I am particularly interested to read the comments to Prof. Strumpf’s guest post.
Koleman properly identified the likely reasons for FRKON’s summer swoon on the Hollywood Stock Exchange. While I cannot provide a definitive explanation for precisely which of those reasons was most influential, I can offer insight into what is actually transpiring (as distinguished from its virtual performance on HSX).
1. Theory: Changes in the likelihood of the movie being made. Reality: The film will be made- it is already “green lit”. I am an independent producer, subject to no studio. The likelihood of the film getting made has not wavered since I originally optioned the cinematic rights to Freakonomics. The only variables have been the scheduling vagaries and other challenges related to using multiple directors.
2. Theory: Changes in the perceived quality of the movie. Koleman posits a couple of possibilities: “funding shortfalls” and “conflicts among the five sets of directors”. Reality: There are no funding shortfalls (I am financing the film myself). None would have emerged yet, anyway. We haven’t even begun shooting the film. The directors will not be working together, so conflicts seem extraordinarily unlikely. To date, they have universally praised each other.
3. Theory: Out of sight, out of mind. Reality: This theory is true. We announced the project in December 2007 and earned a lot of press. Things have quieted significantly since then. We will get another wave of publicity this fall when we have presentable footage. We have another announcement that should generate attention, too (I address that below). Finally, there will be the inevitable surge of publicity when we announce our festival screenings in spring of 2009.
4. Theory: Get the movie mothballed. Reality: Although I am fascinated by conspiracy theories, they don’t apply here. There are no other investors. The Freakonomics documentary is as unconventional as the book. We hope it will be as iconic, too.
My theory: When we moved the shooting schedule from March to September, in order to better accommodate everyone’s schedules, I suspect the HSX investor community got restless. Moreover, FRKON is traded on an extraordinarily small base. Just a few purchases have a profound impact. It only took a few sellers to send the price hurtling downward. Put simply, now seems like a very opportune time to buy FRKON. The graph used shows its low mark on July 13th – it is up approximately 27% since last week and should continue to climb, just based on this blog post.
As a historical reference, I was an investor and Executive Producer for the critical darling, Paris je T’aime, another film that utilized the talents of several directors. It took several years to get made. Historically, omnibus projects just tend to take a little longer to make.
Sam, I appreciate the spirit of your post. I am a devoted fan of Freakonomics first and a producer second. Like you, I would like to involve as many people as possible in this project. Fortunately, we are poised to announce an innovative way to involve the entire Freakonomics community and attract rogue filmmakers. I’ll speak with Stephen and Steven about it, and we’ll announce it here first!
I am pleased to personally answer any questions the readers have about the Freakonomics documentary.
— Posted by Chad Troutwine
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Our previous post
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Those morons at Fox Business spelled his last name “-Kostakis”-, in the video.
So, now you know why nobody watches Fox Business —-they are all on CNBC, who can spell correctly.
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I’-m not sure the video will go into our feed…- In case, it does not, download this post, or go to the link above…-
Summer Blockbuster’-s featuring Alex Costakis of HSX on Fox Business from formula-hsx on Vimeo.
I would like to comment on the post from the Hatena Diary blog. (By the way, please note that my URL has changed, because I corrected one word in the post title. Sorry for the inconvenience.)
#1. Speculation-oriented prediction markets/exchanges: TradeSports, BetFair.
#2. Hedging-oriented prediction markets/exchanges: HedgeStreet and all the Chicago exchanges that will do binary, European call options.
#3. Forecast-oriented prediction markets/exchanges: Iowa Electronic Markets, AS CLAIMED BY THESE SCHOLARS WHOSE TASK WAS TO CONVINCE THE CFTC TO GRANT THEM A NO-ACTION LETTER. (They would have not gotten it, had they emphasized “-speculation”-. And, of course, “-hedging”- was out of question.) It’-s a “-claim”- that might be discussed, since we’-ve seen that TradeSports-InTrade is a much more powerful predictive tool for the US elections. Ditto for BetFair for U.K. elections.
#4. Decision-oriented prediction markets/exchanges: I would put here the kind of stuff that Robin Hanson is so excited about.
#5. Entertainment-oriented prediction markets/exchanges: Hollywood Stock Exchange, Washington Stock Exchange, Inkling, NewsFutures.
#6. Education-oriented prediction markets/exchanges: The Iowa Electronic Markets fits here, partially, regarding the use that professors around the country make of their markets in classrooms.
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– I disagree with Google in #4. Maybe the Google internal prediction markets would fit in #3.
– I disagree with NewsFutures in #3 —-I acknowledge (at least partially) the predictive power of play-money prediction exchanges, of course.
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Should we judge markets/exchanges on INTENTIONS or on RESULTS? I don’-t give a damn that TradeSports-InTrade and BetFair were created for speculation– if they have better predictive power than IEM, I’-m fine with them. Ditto for the HSX. I don’-t give the first fig that it was created as an entertainment tool. It’-s the best forecasting tool for the movie business, period.
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For the links to the prediction exchanges, see CFM.
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Previous Blog Posts:
– Prediction Markets DEFINITIONS – not a “taxonomy”
– Professor Robin Hanson’s draft definitions is validated by professor Eric Zitzewitz.
– Prediction Markets Definitions – REDUX
– Prediction Markets Definitions – by Robin Hanson – 2006-11-21
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Addendum: Robin Hanson has posted a comment…-
“Oriented” is not clear enough for my tastes. Is this about trader motives? Trader results? Price results? Exchange motives?
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My Answer: I meant “-exchange motives”-. […- See my comments. …-] But now that I think of it, another classification taking account of the “-price results”- makes more sense.
Previous blog posts by Chris F. Masse:
From the Horse’-s mouth (Max Keiser):
Max Keiser is a financial engineer who likes to turn things into markets. After working on Wall Street during the eighties, Keiser turned his hand to Hollywood, where, rather than chase starlets as every other man in Hollywood was doing, he began commoditising those same starlets by trading them on the Hollywood Stock Exchange, a virtual market in celebrities that he created long before the BBC ripped his idea off with Celebdaq. The starlets loved him for turning them into the commodities they always wanted to be and Keiser was awarded three U.S. patents for the virtual specialist technology on which HSX runs. During his weekly NBC appearances on ‘-Access Hollywood,’- Keiser became the first person since the days of McCarthy to be boycotted by every major Hollywood studio at the same time. When Keiser accurately predicted weekend box office gross for nine weeks running on his HSX segment of NBC’-s ‘-Access Hollywood,’- the major studios decided that free markets were not so great after all and called for NBC to remove the heretic in their monopolistic midst or lose access to Hollywood ‘-talent.’- HSX was sold to Cantor Fitzgerald and Keiser moved to Europe where he created Karmabanque, a virtual market in monetising dissent.
Addendum (November 16, 2006): I received this disambiguation note from someone who knows the HSX history…-
Max Keiser was not involved with HSX at the time of the acquisition nor was he part of the process.
Addendum (February 23, 2007): Max Keiser replies…-
To say that I was not involved with the sale of HSX to Cantor is incorrect. I did not endorse the sale of HSX to Cantor – I voted against it – because the deal with Cantor was not, in my opinion, above board.