The billboard over Sunset Boulevard in downtown Hollywood says it all: "Where Stars Trade Like Junk Bonds." Hollywood Stock Exchange, online since December 1996, lets Web surfers buy and sell shares in movies and movie stars as if they were companies on the Nasdaq.
Doug Scott, who lives on the go as both chief financial officer and vice president of sales and marketing for HSX, explains why he believes the Hollywood Stock Exchange is not only a fun site, but an inevitably successful business: In this brand-conscious age, star-power and genre can practically determine a movie's potential box-office returns regardless of the writing, acting, direction, and production quality. Professional agencies conduct expensive focus groups to determine, for example, whether it would be more profitable to cast George Clooney or Ewan McGregor opposite Sandra Bullock in the next Internet spy thriller. Scott says, "Studios spend an average of a million dollars per movie on research, to determine whether they should even make the movie." When Web surfers buy and sell their Hollywood Stock Exchange shares in specific celebrities or movies in order to gain "Hollywood Dollars" redeemable for prizes, they are providing the same information. Doug goes on to say, "With HSX's 52,000 registered players, we believe that we have the world's largest focus group."
Hollywood Stock Exchange is negotiating with studios to provide instant digital market research with sample groups too large to be brought into a room with a one-way mirror or surveyed by phone. "We're able to look at the flow of money into specific stars or movies and, by looking at the upticks and downticks, predict what will open well or flop, based on detailed demographics," Doug explains. HSX augments the usual ZAG (ZIP code, age, and gender) database with player surveys and correlated trading histories of individual players. "We can extrapolate information directly out of each player's portfolio," Doug adds. For example, our own portfolio would tell movie moguls that while Keanu Reeves is on a downturn, anyone connected with The Full Monty is worth pouring millions into. HSX's pool of traders is growing at about 1 percent per day, doubling in size about every three months.
HSX has three separate technical positions open right now. Unlike Doug's entrepreneurial spread of responsibilities, technical positions at HSX are clearly defined and focused so that the technology that drives the business can advance as rapidly as possible. A systems administrator will maintain both the game system's network and the local office network, a largely Solaris-based system. A software developer will work to expand and improve the Exchange's Java-controlled SQL. A data miner will use statistical analysis skills to identify important trading trends. All three employees will report to HotWired alumnus Chris Butler, who built much of the existing HSX system and now will focus on pricing algorithms and securities data structures. Chris and Doug are hands-off managers who believe that by hiring the right people, they will avoid having to micromanage.
The HSX office itself occupies a loftlike building in a part of Hollywood Doug describes as "SoHo meets the beach." Both affordable living space and the Pacific Ocean are within rollerblading distance. The office is abuzz from early morning until, well, early the next morning, although this is due to the employees' varied work hours, rather than to marathon workdays. Plans to bring Sandra Bullock into the office for an online chat haven't materialized yet, but the staff is rewarded with free tickets to every film, sometimes even exclusive screenings or previews. All nine staff members are invited to plenty of Hollywood parties, too, and have sufficient health benefits to care for any consequences of the work-hard/play-hard lifestyle. Salaries are lower than most established companies or contract jobs would offer, but the location and lifestyle are an immediate reward most jobs involving Java, Solaris, and SQL can't offer within blading distance. And, of course, employees receive stock options.
HSX's new slogan, "It's Your Hollywood," comes with tongue already planted firmly in cheek. Despite the tagline's overtones of egalitarian, free-market democracy, none of the 50,000-plus online HSX players will end up pitching high-concept vehicles for Bruce Willis over lunch with Tim Robbins. Still, if the company is successful with its deals in progress, HSX may become one of the names the real players toss out over their oysters at Ivy on Robertson when pushing Robert Downey Jr.'s comeback.
This article appeared originally in HotWired.
