Option Agreement vs Shopping Agreement

Seeing their story on television or big screen is a dream of every author, but the process can be rather complicated. There are numerous financial and business aspects that need to be taken into consideration in order to produce and develop a product for the big screen. Most writers/authors/owners are usually offered with one of the two types of agreements, an option agreement or a shopping agreement.

The initial step to developing a project for the big screen is to lock down the story rights. This is usually done via an option agreement. They are the more traditional and historic methods to buy the rights to the script of your movie and to secure funding to buy it.


Photo credit: Carbon Arc on VisualHunt / CC BY-NC-SA

An option agreement is (History and Definition):

  • When production companies and producers who must secure rights of the project for their development, get into an option agreement with the author, writer, owner of the desired project.
  • It is basically when a seller decides to sell the material in question, in return for a price to be paid in a specific period of time (option period), when the buyer decides that the purchase is in his/her best interest.
  • In simple terms, the seller is granting the buyer the right to purchase that project during the specified time limit.
  • Option agreements generally last longer (12-18 months).

A more modern method used by producers and production companies is to get into a shopping agreement with the owner, author of the material in question. 

A shopping agreement is (History and Definition):

  • When the writer/author/owner gives the seller a specific period of time to ‘shop’ the material to prospective television networks, distributers and financers to ‘set-up’ the project.
  • In a shopping agreement, there is little, or no money exchanged. It is an attractive method for the producer.
  • The writer and producer agree that if, during the shopping period, there is interest in the project, each of them will do negotiations with the interested party.
  • The time-frame is usually shorter than that of an option agreement.

Differences between option agreement & shopping agreement:

  • An option agreement is a historic/ tradition approach whereas a shopping agreement uses a more modern approach.

(Image source - https://bit.ly/30jIxr7)

  • Option agreement involves pre-negotiation of price, whereas, in a shopping agreement, price can be negotiated later on with the third party that is interested in the project.
  • In a shopping agreement, the writer has more say in in to whom the production company pitches the project to, unlike in an option agreement.
  • The time duration involved in a shopping agreement is shorter (6 to 9 months) than that of an option agreement (12-18 months).
  • In a shopping agreement, there is little or not money involved. Whereas, in an option agreement, the seller has to pay a little amount at the start.

Similarities between option agreement & shopping agreement:

  • Both, a shopping agreement and an option agreement is made between an owner/writer/author and a producer/production company for the purpose of locking rights to a material and bringing it to the big screen.
  • Both agreements involve a specific time duration.

To submit your book to TaleFlick and get offered an option agreement or shopping agreement, please click here.