Arudel

Why do the principals of Arundel Partners think they can make money buying movie sequel rights? Why do they want to buy a portfolio of rights in advance rather than negotiating film by film to buy the rights?

Making money in the movie industry is an unpredictable task. Weather a film will be accepted by the general public depends on many factors which are difficult to quantify. Is the story appealing? Will you find good actors in the casting? Will they understand each other well with director? Will marketing catch the public’s attention? These are just some of the questions which are uncertain up till advance stages of the film production. So basically, the earnings of a studio or a company in the movie industry will largely depend on its ability to choose good scripts and find the right crew to harmonize the project. The returns in one year can vary widely from films giving a 1224% profit to -91% losses.

Obviously, the movie business is a very unstable one and what the Arundel partners were looking for was to stabilize or at least look for stable characteristics of this industry, which could be measured with more accuracy, and use it to obtain some profits. If they couldn’t have any hint of a film would be a hit or not, at least they could find some predictions on how the sequels of movies would do. The fact that almost all the sequels follow a successful film gave the Arundel partners a good point to start with. They could use information from the first films to make results estimates and calculate if the project was worthy or not. They proposed an innovative idea in which they would buy the rights of making these sequels long time before and even before the first films were started. They though this idea would be greatly accepted as it would pour cash in the project when it was needed the most at early stages of the movie. However, in order to eliminate the very subjective facts explained earlier, and since the studios would eventually know more about the...