Documentary Film Valuation

Documentary film, as an asset, is appraised for its fair market value, in some measure, by considering the directorship, the actors, the classic nature of the filming, but………….. in most cases, the value is hidden in the film’s content (The Zapruder film).

The Getty and others who market and license an individual pastiche from a documentary or home style film will charge in excess of $1,500 per second for that “piece of film” to be used in a feature film (Nazi film fragments used in Shindler’s List) or another documentary (Michael Moore’s films) or in training films (U.S. Government, Universities). What is the average annual usage of the particular content of a specific documentary that is an hour in length? How does the income derived have an effect on the fair market value of the film when it is considered an investment vehicle? In an example: An image of a Picasso painting is used to create a set of signed and numbered prints and other commercial products such as scarves, posters, ash trays, etc. In this case, the vehicle bearing the image (e.g. plate, screen, photo), the “master,” is the object which is being valued and the income approach would be applied.

UNDERSTANDING THE INCOME APPROACH: This is the valuation method used to value a work of art or object which will be used to generate future income, most commonly through leasing, rental or reproduction, but not through a onetime sale with transfer of title and/or copyright. This valuation approach is generally applicable when appraising a film for gift, estate or charitable contribution purposes when the subject property has particular content that is either being or could be leased or rented as a business practice by a firm, an institution or an individual who is in the business of leasing or renting images.

I have valued a number of documentary films for a California University, The Holocaust Museum and The National Archives. The proper use through understanding of this obscure category of tangible assets had a major effect on a client’s estate planning, liability insurance coverage and charitable giving.

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