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Valuing A Single Film or Film Library

4/14/2014

8 Comments

 
Picture
If you want to buy or sell all the rights to a film, you do not have to call an appraisal company to arrive at a fairly accurate value of the property.

My firm has been valuing film and television (intellectual) properties for more than 25 years and we have also studied the valuation techniques of many other firms as well, and for the most part, it comes down to “apples to apples”.

Step One
Break down the film, or films, by director, star(s), genre, original box office (or DVD) revenue and foreign/domestic exposure. 

Step Two
Contact other producers or distributors with similar genre films (with the same director/stars if possible) in their library.  These are called “comps”.  Find out how those films have performed over their lifetime.   You might be surprised how forthcoming most rights holders are with this information, they have nothing to hide and often gain valuable information about their own films in the bargain.

Step Three
Our firm gives each film in a library a rating (1 Worst – 4 Best) depending on the film’s past financial performance, the presence of known “movie stars”, the age of the film, and the film’s director, producer and debut reviews.   We total the points for each of these factors and create an average (Example: 2.3).  

Researching the past sale price of similar films is a bit tricky, but there is a lot of published and unpublished information about past film sales available on the internet.  Again, it is wise to turn to your friendly competitors and other rights holders.  You will probably find, as we do, that you can develop a consensus of thought about any particular film based on its genre, star and director.  So, if the consensus, general market value of films of a similar nature is $10,000, then you apply your multiple (for example purposes only: 2.3). 
Gross Value $23,000.

Step Four
Applying a discount.  You may need to discount the film’s value based on many possible factors; among them are the number of territories sold/unsold (and currently still under contract), the availability of clear chain-of-title information, and the quality of the original print.  If the print has not been digitized and is not in high definition (standard def), then that becomes a factor too.  We add up the discounts and apply them.  It usually comes in at .50 to .80.  This is your discount rate.  For example purposes only, let’s assume that we have created a discount of .67.  We multiply our film’s gross value of $23,000 times .67 to arrive at a Fair Market Value of $15,410.

That is a very accurate assessment of the value of this property.    

You may be wondering why we first create a rating point system and apply it to an average industry consensus of similar films, and then discount that gross value to arrive at a Fair Market Value.  We do this to make sure that we are treating each film fairly and accurately.  Just because a similar Kevin Sorbo or Mark Harmon picture sold for $22,500 in 2006, that does not mean that's what your film is worth;  you will need to rate all of the elements of the film and apply any discounts to be accurate.  

The days when DVD was king are over, and films today are very much valued on their digital distribution rights value.  If those rights, or elements, are not available, then the value can fall to the floor. 

We understand that this is not a cookie cutter valuation method, but it forces you to look at all the positive and negative aspects of a film and apply a numerical value to them.   I promise you that if you use this process you will feel that you have a handle on the true market value of the property. 

If you need any help with this process, or would like us to do it for your company, please do not hesitate to contact us. 


8 Comments
Chris link
3/24/2017 02:54:54 am

Hello,

I am looking for an appraisal of a Graphic Novel IP library for film development purposes. Does your firm have the ability to help us with this?


All the best,

Chris

Reply
Stephen Kerr link
4/2/2019 02:30:10 pm

Hello Chris,
Sorry, we were just notified of your inquiry.
Yes, we are eminently qualified to do this work for you. Please call me at 310 666-6474 to discuss. Stephen Kerr, Bel Age Medias

Reply
Stephen Kerr link
3/28/2017 10:40:46 am

Hello Chris, just saw your note this morning. My website does not forward comments to my email, so sometimes it takes a few days for me to respond. Let me know when you want to get started. Stephen

Reply
Linda Richter
6/14/2018 08:53:54 am

We bought a 16mm film reproduced in january of 1917 in memorial of the death of Buffalo Bill Cody. It is two reels in the shipping case. According to the museum in Cody, WY it may be the last known film that is in tact. How would we value it for insurance purposes?

Reply
OSATO OSAWAYE link
12/29/2018 12:23:45 pm

Hi ,
Want to know more about valution of films and movies in the African movie industry generally and the Nigerian movie Industry.
Am a valuer will specialisation in business and Intangibles .

Reply
Micheal Harpster
4/2/2019 02:19:29 pm

Steve-I'm looking for a price range on valuation of this company::
http://vivafilmco.com/ have revenue figures

Reply
KENT SALVESON link
7/6/2021 09:32:13 pm

I am interested in obtaining a valuation of a recently completely feature film that has not yet been released. Is this within the scope work that you provide ?

Reply
Stephen James Kerr link
7/7/2021 08:31:50 am

Kent, please send me details to stephen@belagemedias.com. Yes, we do value single films, whether they have been released or not. SK

Reply



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    Stephen Kerr is president of BMC (Business Marketing Consultants), a subsidiary of Bel Age Medias. 

    He has 30 years experience in the media and entertainment industry. 

    ​See more on his LinkedIn profile.

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