Simon & Schuster is in the news again, this time for a plan involving fantasty stocks based on manuscript proposals. Media Predict is soliciting book proposals from agents and the public, and posting pages of them on the site. Traders, who are given $5,000 in fantasy cash, can buy shares based on their guess about whether a particular book proposal is likely to get a deal, or whether Touchstone Books, an imprint of Simon & Schuster, will select it as a finalist in a contest called Project Publish. If either happens within a four-month period, the value of the shares go to $100 apiece; if not, the share price falls to zero.
The site also allows traders to bet on the chances that unsigned musicians who currently top the rankings on MySpace.com, the social networking site, will get a record deal.
Media Predict is modeled after other so-called prediction markets like the Hollywood Stock Exchange, which allows traders to bet on the four-week North American box office receipts of movies, or the Iowa Electronic Markets, which allow people to bet on election results.
“Being able to predict the performance of something is key,” said Brent Stinski, founder of Media Predict. A prediction market, he said, “is a very powerful tool.”
For Simon & Schuster, the partnership is yet another attempt to gauge popular tastes. Earlier this year, the publisher teamed up with Gather.com, a social networking site, to run an “American Idol”-style contest in which voters pick a manuscript for Simon & Schuster to publish.
In the case of Media Predict, traders are not voting on the book they like best, but rather are placing bets on which they think will do well. According to Mark Gompertz, publisher of Touchstone Books, Media Predict could do for book publishing what focus groups do for soap and soda and what screening audiences do for movies.
One thing is certain: It will be very interesting to see how this project unfolds.
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