A Week After Feds Approve Movie Derivatives Market, Congress Bans It
from the so-much-for-that dept
Over the last few years, a few companies have been trying to set up financial markets for buying and selling movie derivatives. Effectively, it was a way to financially bet on the performance of certain movies — whether long or short. There are all sorts of markets like this, and it’s difficult to come up with any reason not to allow them — but, of course, the MPAA cobbled together a bunch of complaints, including the idea that this would encourage more file sharing, as short sellers attempted to undermine the performance of a movie. So, it seemed like good news last week when regulators from the Commodity Futures Trading Commission voted to approve one of these operations, the Trend Exchange, from Veriana.
But it appears that victory was very short-lived, as Congress banned such offerings in the middle of the night last night. Basically, the MPAA was able to shove this issue into the Wall Street Reform bill which has widespread support, and politicians who didn’t want to hold it up any more refused to take that provision out (which would have involved a fight).
Apparently Hollywood is so afraid of free markets that it has to oppose them every chance it gets.