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When a work is optioned, the producer has not actually purchased the right to use the source material; they have simply purchased the option to purchase the rights to the work at some point in the future, if they are successful in setting up a deal to actually film a movie (or series) based on it.
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Option agreements detail the rights of the producer and the original author, including how long the agreement lasts, the fees paid to the author, and any plans for rights associated with derivative works (for example, a future prequel to a book). The producer usually has to outline their plan for
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to a source material to a potential film producer. It grants the film producer the exclusive option to purchase rights to the source material if they live up to the terms of the contract and make a film (or series) from it. This is known as
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A portion of the film's financing is usually used to pay the exercise price. This is also called the "purchase price", for obvious reasons. The producer has until the end of the last extension period to exercise the option.
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50,000 to option his script. Many writers are happy to receive a few thousand dollars. Option contracts typically specify the eventual cost of the screenplay, if the producer does end up exercising the option.
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Most option agreements have two option periods, which have separate timelines and fees. The initial option fee is negotiated during the original agreement. They vary greatly from deal to deal.
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The fee for the first option period can be detracted from any income received from the project after the original work is exercised, while the fee for the extension cannot.
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Finalize the screenplay to the agreement of all stakeholders—the exclusivity of the option allows this step without risk of a rival attempt to produce the same property.
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or an individual. Source materials are often a book, theatrical play, or screenplay; however, they may also be articles, video games, songs, or any other work of
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After the option period expires, the producer no longer has an exclusive right to buy the screenplay and the original work's rights are returned to the author.
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If all planning falls into place, actual agreements are signed, financing is secured, and the option fee is paid, then the producer can start pre-production.
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Purchasing the actual rights to a work is called "exercising" the option. This requires another contract, the "Rights
Purchase Agreement".
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Film option agreements last for a set amount of time, which is called the "option period" and is often around eighteen months.
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Since optioning a screenplay is far cheaper than buying it, options are very popular in
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Take it to a movie studio or other potential financier and potentially help with distribution (
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Get the screenplay written (if the option was on a book or other work, and not a screenplay);
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Real
Options in the Motion Picture Industry: Evidence from Film Marketing and Sequels
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Reuters Practical Law - Thomson Reuters Practical Law - Media and Telecoms
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Using real options to make decisions in the motion picture industry
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This process can last for a prolonged period of time known as
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financing, writing, casting, and shooting the film or series.
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J. Gong, J. Jianxin, S. Young, and W. Van der Stede (2011).
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Don Chance, Eric
Hillebrand and Jimmy Hilliard (2009).
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261:"The Screenwriters Guide To An Option Agreement"
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259:Kirkpatrick, Scott (18 December 2021).
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365:. Strategic finance . pp. 53-59.
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235:Hollywood accounting
174:Options in Hollywood
60:production companies
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324:. Thomson Reuters
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241:References
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192:received
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