How do studios come up with the content on TV, in Movies, and streaming?

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Often producers and studios source existing works (Scripts, Books, News, Games, Plays, etc.)

 

Generally, only hot properties like, “spec scripts” (an uncommissioned script without a deal in place) in a bidding war or high-profile novels are purchased outright. In those cases, the writer has the leverage to insist on a purchase.

 

Instead, companies acquire an option by paying a fraction of the total cost.

Options are an exclusive, irrevocable right to purchase the property (or a specified right in the property) at a specific price within a set time.

 

While under option, no one else can acquire the rights to the property.

 

During the option period, the studio/producer can commence development(e.g., preparing treatments or screenplays based on the property, attaching talent, and securing financing) without paying the full fee.

Commencing principal photography deems the option “exercised” triggering payment of the purchase price.

The option fees are negotiated. They run, on average, 10% of the purchase price.

 

Some factors include:

  • The property’s demand
  • The popularity of the creator
  • Purchaser’s resources (large studio vs independent)
  • Option period length
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