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Why Optioning Your Characters May Be a Horrible Idea
If anyone asks to take an option on your characters as opposed to on your next project of whatever type, you might be tempted to say yes. Think hard before you do

The general rule of entertainment contracts is that buyers want to buy as much as possible and sellers want to sell as little as possible. So a character license may seem like the best of both worlds: if you work with the same characters then the publisher/studio/whatever gets a first pass (I'll use publisher to keep things simple), but if you don't work with those characters then the publisher has no claim on whatever you do and you can take it wherever you'd like.

Or so you may think.

In an ordinary option clause, the company taking the option is reserving for itself the right to be the first one to consider the next thing you do that meets the criteria of the option. So the important thing in any option clause is defining what is and isn't covered. And character options risk giving you a false sense of certainty here.

If you've written a thriller where your lead character is a detective in his early 40s and then you move to a young adult romance about a girl in high school, or a from video game about World War III to one about jousting cartoon animals, you shouldn't see many issues here. But most of us specialize in our content creation pretty quickly. You probably won't see me talk about criminal or divorce law on Legal Minimum, for example. And if you've been successful writing one police procedural or creating a tower defense game, the odds are you'll return to that genre.

That's where the problems can hit.

Complete article here.