Prod’n co. born from Net game

“It is not a game,” barks Douglas Scott, senior VP, sales and marketing, of Hollywood Stock Exchange. It is hard to argue with him. Although the Hollywood Stock Exchange started with the intention of providing entertainment to people interested in the film industry, it is most definitely not a game to many people. Certainly not to the studios or the indies who participate on the Web site.

“We see this as a community where individuals exchange ideas and opinions in exchange for entertainment,” Scott says.

Originally a Web site that allowed visitors to virtually invest Hollywood “dollars” in four phases of filmmaking, — ideas, development, production and release — HSE is based on the principles of conventional stock exchanges.

With the Hollywood dollars, subscribers can purchase star bonds and stocks from more than 500 movies. Fox’s “X-files: The Movie” is the hottest stock on the market and maintains the highest level of volume on a daily basis, according to Scott.

When a film’s stock goes up, so do Hollywood dollar profits. These virtual profits can then be redeemed, at any time, for real merchandise and discounts from studio stores.

“More than a game, this is a form of entertainment which helps people learn about stocks and bonds,” says Scott. Perhaps the biggest bonus is that the exchange provides studio, and all filmmakers for that matter, with a marketing lab. Currently, there are 40,000 traders in 120 countries. “The indies and the majors use this as a focus group to test concepts, pre-market films and survey specific user groups,” Scott claims.

For indies in particular, this has proved to be a powerful communication tool. “Now, the indies have the ability to market to a level playing field,” he explains.

Scott says the mantra at HSE is “entertainment by the people not for the people.” Now it has a chance to prove it with an in-house film division. HSE is in production on its third film, “Dancer, Tex. Population 81,” which was picked up by TriStar Pictures.

Meanwhile, the interactive side is growing by about 2% daily and HSE is in negotiation with online companies from AOL to Prodigy. The company has doubled its staff, and they have plans to enter other entertainment-related areas.

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