What is the Value of Film Copyrights? – An Analysis of Basic Methods of Valuation

Abstract

The functioning of the film production sector strongly depends on the use of copyrights and related rights. Problems regarding their clearing could badly harm the functioning of companies and in some cases lead to serious financial problems. The development of a proper method for calculating the value of copyrights and related rights is an important task in the current climate of the new economy. This type of valuation is not a typical task for film producers or copyright owners. There is a problem with using common methods. The largest set of operating costs for companies like television companies and VoD platforms are usually content costs related to copyrights and neighborhood rights. Broadcasters, TV stations, cable operators and Pay TV providers pay producers content fees. Additionally, Copyright Management Organizations (CMOs) collect fees for copyright-protected content that is broadcast and rebroadcast. There are many court disputes related to copyright fees. The main reason for disputes is the lack of a common methodology for calculating compensation for copyright owners and the potential for misunderstanding the real value of copyrights. The objective of this analysis is to show basic methods for financial valuation of copyrights related to film. The author has carefully analyzed and described common methods applicable for the financial valuation of copyrights and described their advantages and disadvantages.