The most recent Paranormal Activity movie will be the lowest-grossing in franchise history.  Eh.  That’s a shame.  They had a good run. When does the next Conjuring come out?

And that’s exactly how turnover happens in the horror genre. Something captures the zeitgeist and bankrolls some Hollywood producers’ quickly developing coke habit before all of the inevitable sequels and knock-offs kill the fad and open the door for something new.  Right now, found footage movies are out and old fashioned haunted house movies and psychological thrillers are in. Before that, torture porn gave way to 80s remakes.

These movies don’t win awards nor do they earn much respect.  Since the slasher movie boom of the 80s, there’s a sense that if you just roll out any ole cheaply-made, crappy horror movie teenagers will flock to see it and guarantee a nice return on investment.  Of course, that viewpoint does the genre a disservice, but it’s not entirely wrong.  Regardless of whatever the prevailing trend of the day might be, the horror genre is consistently the most economical model for film-making because the costs are so insanely low.  It is a genre which sells itself rather than requiring any kind of known actor to boost the appeal.  Not surprisingly, MoviePilot recently concluded that the 10 most profitable movies of the past five years are all horror, led by The Devil Inside ($101 million on a $1 million budget), and six of the 10 were made by uber-producer Jason Blum.

Of course, movie profitability is a notoriously complicated subject, and the horror genre generally doesn’t have as many revenue sources as some others, unless there are wildly popular Paranormal Activity toys and board games I don’t know about. But the math nerds (I mean that as compliment) at FiveThirtyEight took the data we have, namely production budgets and box office totals, and extended things back even further, looking at “data for 202 horror movies that were released between 1999 and 2014” and compared it to “180 films in the romantic comedy genre and 338 action films.”

Wow. I didn’t even know there had been 180 romantic comedies released since 1999. That genre seems fairly dead by now. Plus, I don’t know how they defined “action” and why they didn’t also look at sci-fi movies or dramas. But I digress:

One in 5 horror movies in our set made its budget back at the box office 6 times over or more. One in 10 made its budget back 17 times over or more. And it keeps going! While 1 in 20 action movies made 6 times its budget or more, 1 in 20 horror movies made back 38 times its budget or more.  In short: There were 28 horror movies out of the 202 we analyzed from the past 15 years that made back more than 10 times their budget. There were only six romantic comedies out of 180 and only four action movies that pulled off the same return on investment.

Jason Blum has built his career off of that kind of return on investment.  He has a 10-year first-look deal with Universal which obligates the studio to green-light any movie budgeted at less than $5 million as long as it’s horror, thriller or sci-fi. If the finished film is deemed worthy of the inevitable marketing costs, it’s automatically released on 3,000 screens. If not, it might sit on the shelf or be shuffled off to VOD, where it might at least recoup its money.

Blum is but the latest in a long line of exploitation filmmakers.  There’s always some maverick mass-producing B-movies on the cheap and seeing insane returns on investment, as LA Weekly explained:

In the 1930s, when studios relied on block-booking double bills, half the pictures were quickie B-movies. Back then, the safest financial bet was low-cost Westerns. Over the decade, as the Depression slowly receded, the average cost of a studio movie rose from $300,000 to just under $1 million. In 1942, RKO producer Val Lewton took aim at that overinflated spending by capping costs at $15,000. His first flick — the nasty, fun, $134,000 Cat People — raked in $4 million. Lewton repeated his success with I Walked With a Zombie and The Leopard Man, and then his studio protector died and Lewton was hustled off the lot.

In the 1950s, a Detroit kid named Roger Corman made dirt-poor genre movies directed by whoever would say yes. Luckily, Corman got yeses from newcomers such as Francis Ford Coppola, Peter Fonda, Ron Howard, Martin Scorsese, James Cameron and Jack Nicholson.

In the ’80s, Corman was usurped by Cannon Films, run by Israeli cousins Menahem Golan and Yoram Globus. By then, action — not Westerns or horror — was the can’t-miss genre, and Cannon cranked out cheap flicks starring Chuck Norris and Charles Bronson, plus occasional oddballs like Breakin’ 2: Electric Boogaloo.

Plus, New Line Cinema was built off of horror movies in the 80s, and in the 90s the steady horror movie profits from Bob Weinstein’s Dimension Films provided Harvey Weinstein the necessary capital to keep producing all those prestige Oscar movies through Miramax.

In Blum’s current business model, his directors, writers and actors get union minimums, and the shoots never last longer than four weeks.  They often film the whole thing in a single setting, normally a house, and if the actors want a trailer they have to pay at least $750 out of their own pocket to rent one.  The director is guaranteed final cut and can ignore any of Blum’s notes, although there will be plenty of those, and the profits are ultimately shared with the cast and crew, which is how Rose Byrne and Patrick Wilson were each paid around $11,000 in salary for Insidious Chapter 2 but ended up making $7 million on the back end after it grossed $83 million domestic.

It’s a risky model for cast and crew because if they work on one of those movies that ends up sitting on the shelf or goes straight-to-video then they’re pretty screwed.  However, Blum thinks it helps to inspire everyone involved, “When the director is making scale and the actors are making scale, the conversations around the object we’re contracting are 180 degrees different than if the director’s making a million dollars and this actor’s making $100,000 and this producer’s making $200,000 and this other producer’s making $800,000.” Such pay disparity “just fucks up the balance, as opposed to, we’re all on the same team.”

He has stepped outside of the horror genre on occasion, even surprisingly ending up attached to the Oscar-contending Whiplash, but horror is at the heart of his business model.  Without him, it’s unclear how many horror movies would be out there right now.  There are plenty which still go straight to video, but it’s not a priority for the major studios.  “In Hollywood, the herd mentality is massive,” says Blum. “The reason people don’t make low-budget movies is that it’s completely not sexy — we’re not the cool guys on the block.”

Now the least cool kid on the block is regularly making the most profitable movies in town, and even when he misses, as he did with The Gallows and The Lazarus Effect earlier this year, the losses are nothing compared to the type of money studios like WB lose on the likes of Jupiter Ascending and Pan.

Source: FiveThirtyEight, LA Weekly

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Posted by Kelly Konda

Grew up obsessing over movies and TV shows. Worked in a video store. Minored in film at college because my college didn't offer a film major. Worked in academia for a while. Have been freelance writing and running this blog since 2013.

4 Comments

  1. I always wonder who is even watching this nonsense.

    Reply

    1. Like I said in the article, the assumption is usually that these movies mostly play to teenagers. Of course, there are deeply passionate lifelong horror fans as well as adults who just love a good scare, but the bread and butter has usually been teens.

      Reply

  2. One thing to keep in mind when considering the Box Office for the latest P.A. is that Regal boycotted it since it was being released day-and-date on On Demand.

    Reply

    1. I know. What ultimately means is that it will go to VOD much sooner and they probably won’t release those sales figures. So we won’t be able to judge it properly. However, the numbers for Paranormal Activity have been going down for the past couple of sequels giving the impression that it’s probably run its course as a franchise.

      Reply

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