Peak TV Is Driving Library Values Sky High

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'Shakespeare in Love' is part of Miramax’s 700-film library.

The proliferation of outlets is propelling double-digit growth in licensing deals for catalog titles on streaming, premium and cable — and it may just be getting started.

Even at AFM, with its unrelenting torrent of fresh film projects seeking financing and distribution, all that is old is new again.

The market for old movies, that is, library assets, is rising as new deep-pocketed conglomerates — studios including Disney, WarnerMedia and NBCUniversal and tech giants such as Apple — roll out streaming services to challenge Netflix and Amazon Prime with thousands of hours of film and TV content. At the same time, the output of high-end films has dropped as studios produce fewer titles, focusing on a handful of tentpoles.

Add to that the new market of ad-supported streaming, or AVOD, a market expected to double to nearly $50 billion by 2023, according to a recent report by international ad authority WARC and one that relies almost entirely on library content, and it’s clear why the new business of old films is booming.

"Our library has never been older and it has never generated as much revenue as it does today," says Chris Ottinger, president of worldwide television distribution and acquisitions at MGM, who adds that he’s seen double-digit growth in licensing sales for his company’s back catalog across SVOD, premium and cable over the past 12 months. "I think libraries are really really undervalued at the moment — shockingly undervalued, to be honest."

Don’t tell that to Qatar’s beIN Media Group, which is reportedly close to selling a stake in Miramax — the company with a 700- film library including such evergreens as The English Patient, Good Will Hunting and Shakespeare in Love that it purchased in 2016 — with ViacomCBS the likely buyer.

Just last month, Vine Alternative Investments paid about $200 million for the Lakeshore library and its catalog of some 300 films and TV titles, including Oscar winner Million Dollar Baby and the Underworld franchise. Last year, investment group Raven Capital Management paid $87.5 million for the assets to Donald Tang’s Open Road, including rights to titles like Spotlight and Nightcrawler.

"Those libraries run forever," says Scott Kennedy, president of worldwide marketing and distribution at Forrest Films. "As the studios launch their own streaming services and pull their films off Netflix and Amazon, those guys are going to be even more hungry for content."

The explosion of new outlets for features means sellers can slice and dice licensing deals, creating more and shorter windows for their titles. "In the U.S. now, we are selling our titles by the month," says MGM’s Ottinger. "It’s not uncommon to do 10 to 15 different licensing deals for a single title in a single territory."

Sellers agree that library value comes from recognition — "you can sell When Harry Met Sally or Road House over and over again," notes Ottinger — but recognition comes at a price. "You need to have a theatrical release, you need to have the marketing push that comes with a proper theatrical rollout," says Kennedy. With fewer and fewer films getting theatrical bows, that could be a problem.

And while libraries are a hot commodity now, entertainment industry analyst Hal Vogel warns that, despite their appeal in the streaming world, they are usually depreciating assets.

"Public styles and interests change over time, and young people are your main consumers," he notes. With a flood of new films — and new TV series — to catch up on, the young audience "has no time to watch the old stuff with funny-looking fashions and cars and no computers and cell phones."

This story first appeared in The Hollywood Reporter's Nov. 8 daily issue at the American Film Market.