What Do Movie Makers Pay to Option a Book for Film Rights?
The idea of optioning a book for film rights is something that many aspiring authors dream of for their literary works. After striving and pushing so hard to get a book published. The next best thing for the author may be to have the book made into a movie. However, many authors are surprised when the offer they receive for the rights to produce their book on film is significantly lower than what they had “dreamed.” But, what do movie makers pay to option a book for film rights? And is it really worth it for the author?
Although optioning a book for film rights is something that very few authors ever actually face in real life. It’s definitely a dream of many.
And while the process is quite complicated, in the event that a book or other published work does make it past the optioning period. And a purchase agreement is actually made.
The benefits to the author could be profound, but not always. So what do movie makers pay to option a book for film rights? Let’s break it down…
First, authors must understand the process of how a book is made into a movie. It’s really not as simple as “Author writes book. People love book. Filmmaker approaches author. Asks if they can make book into movie. Author says yes. And voila film is produced.”
We certainly wish that it could be that simple. But, the reality is, filmmaking takes time and money. Lots of money! Thus, before a book is ever produced into a movie it is optioned.
Optioning a book for film rights means that the producer approaches the author or copyright owner of the book. And asks for the right to the story.
The option represents a legal agreement. A contract, actually. That grants the producer exclusive rights for a specified period of time (usually 18 months). So that they can determine if there is any further interest in making the adaptation from book to film.
Thus, the option places the right to purchase full rights to the book on hold. So that the producer with the option can determine. Whether there is adequate desire/interest among investors. Or others to have the book produced into a film.
If, within the option period, the producer is not able to find enough investor interest in the book. They will let the option go back to the author. Who can then sell the option to another producer.
However, if there is interest in the book? The producer might then come back to the author prior to expiration of the option term. To negotiate a purchase agreement where they then purchase exclusive rights to produce the book into a movie.
The Option Price
As we look at answering the question, “What do movie makers pay to option a book for film rights,” the most important consideration here is how the option price.
As well as the ultimate purchase price, for the book to film rights are negotiated and agreed upon. While every book to film deal is different, it’s very important for authors to know that there are some factors that are likely to result in a higher option or purchase price than others.
The typical option price for a book is usually somewhere between $500 and $50,000. This is a hugely vast range though, so what is it that determines a $500 option price versus a $50,000 option price?
Estimated purchase price!
The option price for book to film rights is generally about 10% of the total estimated purchase price. Thus, if the filmmaker intends to ultimately purchase the book to film rights for $500,000.
Then the author will likely get their $50K for the option. But if the estimated purchase price is more like $5,000 then the author will likely see a $500 option price.
Option Renewal Fees
Another consideration when looking at how much a filmmaker will pay for movie rights is the fact that a book to film rights option could expire after 12-18 months depending on the original agreement that is made between the author and the producer.
The deadlines are imposed to provide the producer adequate time to make their considerations and seek funding for production.
But they’re equally important for the author as they can prevent producers from dragging their feet and holding over the potential rights to a book that they don’t fully intend to ever produce into a film.
Extension or Renewal
Thus, in the event that the option deadline expires, the author may decide whether or not to agree to an extension or renewal of the period for the producer.
If the producer is still interested in the book to film rights option, but simply needs more time to pull together the appropriate financing to seal the deal. They can seek an extension or renewal of the option rights from the author.
However, renewing the option will typically come at a higher price than the first option. Because now that there is demand for, or interest in, the book to film deal.
It’s more prudent than ever for the author to seek additional funding. And for the producer to work harder towards achieving the end goal of purchasing the full book to film rights. Thus the option renewal may come at a premium to the producer.
Factors that Make Optioning More Expensive
So, what do movie makers pay to option a book for film rights? Generally they will pay out about 10% of the estimated purchase price for the first option term. And the second term could be substantially more.
The actual price though is depending on a variety of factors. That may make optioning a book for film rights more, or less, expensive. While the general rate is about 10% of the estimated purchase price, how is the purchase price for a film determined?
Based on factors such as the popularity of the book or the popularity of the author, the producer’s desire for the book to film to actually succeed, or the notoriety of the book.
Naturally, not all authors are JK Rowling and not all book to film deals are going to payout the way the Harry Potter series did. In fact, it is very important for authors to understand that optioning literary material is their choice.
And that, while the filmmaker may have the end say in what they’re willing to pay for option rights, the author always has the right to agree, or to deny, the option if they’re not satisfied with the offer that is made or the price that is offered to them.
So, what do movie makers pay to option a book for film rights? They will pay somewhere between $500 and $50,000 most of the time.
And this is generally in accordance with what would be approximately 10% of the estimated purchase price for the final rights to the book. But the author has the right to ask for more and is never obligated to sell their book rights to a filmmaker.