Option
Payment for exclusive rights to develop intellectual property into a film or show for a specified period.
Definition
An option is a contractual agreement where a producer or studio pays for the exclusive right to develop underlying intellectual property (a book, article, life story, etc.) into a film or series for a specified period. The option payment is typically a fraction of the full purchase price, paid upfront.
If the project moves forward, the purchase price (minus option payment) is paid. If the option expires without production, rights revert to the original owner, who keeps the option payment. Options are typically 12-18 months with extension provisions.
Why It Matters
Options enable development without full commitment, managing risk for producers while compensating creators during uncertainty. Understanding option structures helps rights holders evaluate offers and negotiate appropriate terms.
For producers, options create exclusive development periods to package projects and find financing without immediate full investment.
Examples in Practice
A novelist options their book for $50,000 against a $500,000 purchase price, receiving payment while the producer develops the adaptation.
A producer's option expires without production; the author re-options to a different studio with more development traction.
A life rights option secures exclusive access to a story subject, enabling documentary or narrative development.