Media Derivatives?

I've been reading a lot about media derivatives and am curious what people think about it?

The Studios are opposed to it I hear, and I am trying to understand why that is. For me it seems like the best idea ever.

Media derivatives have the potential to jump start film production in a big way.

I think about it as comparable to Horse Racing and betting. The films would be the horses and the race is the amount of money it makes. People would be betting on how much a movie will make essentially.

People groom and breed their horses in the way that Agencies groom and recruit their stars and 'packages'. But the odds don't seem to matter as much as you would like once the race starts -- or the film is released.

Media derivatives also allow for whole new structures of funding and financing films and media products. You could essentially sell 'shares' in movies (like an IPO) and even pay top stars and talent in shares. This would encourage them to go out and make the film a hit. But in case it's not a hit, the investors who put $100 million up for it, could buy insurance on their investment to mitigate the loss...

Right?

The other thought I had was offering people the chance to invest in a film that they would want to see.

The Studio shares the risk of funding the movie by selling shares or CDOs of the film to thousands of 'Joe Moviegoer' or businesses, or even the crew of the films themselves.

So if I invests $1000 in the film. Once the film hits say $100 million I get my $1000 back, if it makes $150 million I get $1100 -- you get the idea.

If I was a partial owner of the film, I would work much harder to promote it!

In essence the studio shares the risk of the film by teaming up with everday people, the crew and other potential investors. The studio itself could potentially never lose any money in making films if it can structures the deals such that they get all their invest back first...

"There are many ways to skin that cat"

...if the studio is really afraid, or puts up a lot of money itself, it could buy derivatives -- insurance -- on it's own portion to further hedge it's own risk.

Just thinking of ways to get more film production going!

What do you think?