I understand that someone might be a valuable firsthand source to get interesting details and core pieces of a real story right. But how can someone secure the movie rights or book rights from them? Stuff happening to you doesn’t exactly mean you’ve created something and should have copyright, or does it?
You’re basically asking about the difference between an authorized vs unauthorized biography.
If you sell the rights, that’s just getting some nominal fee in exchange for your participation in the process. You may have insights and knowledge of certain events that aren’t easy to find without your help, so some media production company may pay for you to fill in those gaps.
None of that is strictly necessary, though. Anyone can write about anyone else, so long as they aren’t making false claims about the source, or making other negligently false claims of fact. (Don’t do false advertising or libel.)
Usually what makes it worth it is if the person in question has any works under copyright. It is usually fair game to make an unauthorized biography of a politician since very little of their public work is protected. In contrast, various artists, especially singer-songwriters, generally need to have their works be official since the copyright holders want control over how the artist is portrayed.
Libel is pretty hard to prove. Historically, you can probably get away with a little libel to sell books, fyi. But you didn’t hear it from me.