On The Corner of Hollywood and Wall

from the east-meets-west dept

Recently we discussed the emerging trend of Wall St. banks and hedge funds financing films. We noted that the interesting question was whether these institutions saw an opportunity to exploit inefficiencies in the existing model — of which there are many — or if they just saw themselves filling in a funding gap for Hollywood’s typical slate of big budget features. Today, the New York Times looks further at the strategy these firms are looking to employ. So far, their approach doesn’t look all that radical. In typical Wall St. fashion, they want to go with producers that have an excellent track record of making money. That sounds great, but given the randomness that characterizes the industry, simple backtesting, as traders say, isn’t likely to reveal much good information. Other aspects to their strategy include focusing on genres that consistently turn a better profit (again, same problem) and making more cheap films, which is a smart thing. Another interesting angle to this story is the question of what happens to the studios as their funding role gets usurped by financial firms. It actually might be good for them. It means they can focus more on the distribution side of the business, an area that needs a lot of work. Ideally, this arrangement will free them up to come up with innovative ways of selling movies instead of the current system which is looking increasingly broken. Ultimately, it doesn’t seem like the new funding model will bring about change too quickly, but anything that shakes the system up a little bit is probably good.

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “On The Corner of Hollywood and Wall”

Subscribe: RSS Leave a comment
Haywood says:

Unless it goes the way of the recording industry

Once upon a time, people in the record industry were at least interested in music for the most part, and it showed in the product. Shortly after the CD was invented, the industry started making insane profit, and the labels were bought up by money people, who to this day can’t accept that the CD thing was just a bubble as people replaced their older media. Since they aren’t making those insane profits now, someone must be stealing it from them, hence the RIAA.

Add Your Comment

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...