Investing in Book and Film Rights with a Self-Directed IRA

Published on January 21, 2026

As we related in a prior article about music royalties and this one about investing in film or theatrical productions, there are various ways in which intellectual property as an alternative asset can become an investment in a self-directed IRA. Within this asset class are book rights and film rights, which provide account owners with portfolio diversity and the potential for royalty income (and more).

If you’ve ever read a book and thought, “This would make a great movie,” you are in the realm of book and film rights.

What are book rights?
In general, book rights are exclusive legal permissions to control the work’s (book’s) reproduction, distribution, or adaptation into another medium. These rights may be conferred to the author or publisher.

A SDIRA that invests in book rights may generate income from an advance, royalties, or by acquiring subsidiary rights like film/TV. When talking about this in the context of book-to-film, investing in book rights through one’s self-directed IRA means that the account owner uses the retirement plan to buy the license to then profit from the book’s adaptation into a movie.

The SDIRA can make a direct investment with the author. However, since book rights often lie with the book’s publisher, complex contract negotiations may be necessary to make this investment. Another way to do this is to invest via platforms on which a SDIRA can purchase shares in a book’s future royalty streams.

Investing in book rights involves acquiring different licenses for a book’s usage—and understanding the primary and subsidiary rights involved in book rights and licensing.

• Primary rights: these are for the book’s core publishing as a hard cover or paperback book, an e-book, or audio book.
• Subsidiary (expansion) rights: these can also be lucrative and include foreign translation and large print versions, audio books, serial versions (excerpts that appear in magazines, for example), educational use, merchandising, and film/TV/stage adaptation. Some subsidiary rights may be negotiated as exclusive licenses for specific territories, formats, or durations.

How to invest in book rights

As a self-directed investor, the account owner sends instructions to the SDIRA custodian to purchase specific rights from the author or original rights holder(s) for a set fee or royalty structure. The IRA can earn revenue by licensing these rights to specialized companies such as an audiobook producer, film studio, merchandise vendor, or a foreign publisher. It is up to the account owner to negotiate all terms of the investment, including publishing or distribution territory and advances and royalty percentages.

What are film rights?

As with book rights, film rights are legal permissions that give the holder the right to adapt intellectual property (like books) into a movie. Part of the investor’s due diligence regarding film rights investments are to understand option agreements, creator and producer compensation, how merchandising rights are governed by copyright law and marketing entities, types of film distribution deals, and determining who profits from the film’s screening across platforms (live cinema, streaming services, etc.).

Types and aspects of film rights are:

• Ownership: the creator (author, scriptwriter) owns the initial copyright and producers acquire rights (to develop it into a movie). After production, the production company usually owns the finished film, which is then licensed to distributors.
• Option agreement: this is when a producer pays for the exclusive right to develop a property for a set time; if the film is made, the full purchase price is paid.
• Purchase agreement: all the details about the fees, profit shares, and rights to sequels, spin-offs, and other markets (ancillary rights).
• Primary vs. secondary/ancillary rights: primary rights are for the film’s initial cinema release; secondary rights are for other media (TV, DVD, streaming, video games, and more)
• Public performance rights: needed to show films publicly outside the home (e.g., libraries, schools, theaters).

How to invest in film rights

To invest in film rights, the account owner sets up and funds the self-directed IRA, then uses the capital in the account to invest in film distribution or film production companies, which in turn acquire or produce the content.

The SDIRA may be a direct equity investor and have an ownership stake in the film; or it may participate in profit sharing and earn income as principal plus interest or through a share of profits from streaming royalties, box office revenue, or licensing deals. There are crowdfunding platforms that enable smaller investors (as opposed to large institutional investors or very high-net-worth individuals) to contribute.

As with any alternative asset, the account owner is responsible for understanding how intellectual property investments work in general, and how investing in book or film rights works specifically. In addition, as with any self-directed investment, the investor must make sure the transaction is structured in compliance with IRS investing rules regarding how to include these alternative assets in a SDIRA.

Do you have questions about self-direction as a retirement wealth-building strategy? Are you wondering about other types of alternative assets you are considering—and what these plans allow? Our helpful team of SDIRA professionals is here to give you answers. Contact us at NewAccounts@NextGenerationTrust.com or 888-857-8058 during regular business hours, or read our foundational white paper titled “Everything You Need to Know About Investing in Alternative Assets using a Self-Directed IRA.”