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How to: Sell different rights

There are several rights you can sell when marketing your show (sell as few as you can for as much money as you can).  Here are the basics:

  1. Domestic US HD (hi-def) Rights
  2. Domestic US SD (standard-def) Rights
  3. International HD Rights (these are sold on a country by country basis)
  4. International SD Rights (these are sold on a country by country basis)
  5. Format Rights (i.e. the concept of the show)
  6. DVD Rights
  7. Merchadise Rights (i.e. stuff you can sell associated with the show)

Our plan was to sell the pilot to a US HD only network in an attempt to breakeven on production costs – i.e. if could sell the show for what it cost us to produce we would be happy.  Then we would try to sell the SD rights in the United States.  Next we would use the American sale to lure international networks to the table to negotiate sales – revenue from these sales would represent the profit from the program.  Also, rights are sold for a period of time.  Sometimes you sell your rights forever and other times you can sell them for one, two, three or five years.  Finally, we would sell DVD’s at the MotorSport Ranch location and potentially through Amazon and other venues.

GorillaThe best example of how this works is Fear Factor and Big Brother.  These two shows generate a huge of amount of revenue in the United States – approximately $100MM.  Most people think that is the bulk of the revenue/profit – but they are wrong.  In fact these shows generate more than $900MM in various international markets.  So the market for television content outside of the United States is 10X inside the country.  Endemol is the 800lbs gorrilla in this space – owning both shows including several other hot shows including Extreme Makeover Home Edition.

Our gameplan was simple, breakeven here and focus on selling the program to a South Korean channel for $3,000.00 and a Japanese channel for $4,500 and so on. We were not going to get rich but we would get a nice return on our investment.  If the pilot took off on the US HD network we would produce the series (perhaps 6 episodes) and soon you might have a nice little business – not huge – somewhat like a real estate investment – or a gas well.  Moral: 99% of shows fail to make anyone rich.