Horror Films Cost Very Little to Make and They Make a LOT of Money

Horror Films Cost Very Little to Make and They Make a LOT of Money Horror Films Cost Very Little to Make and They Make a LOT of Money Horror Films Cost Very Little to Make and They Make a LOT of MoneyPeople love horror movies, and rubber masks are cheap. Producer Jason Blum has turned that formula into a money-printing movie empire.With a new sequel to  Halloween opening this Friday, courtesy of director David Gordon Green and, um, Danny McBride, it’s hard to ignore that horror has made a huge comeback over the past decade. And a great deal of that comeback has come courtesy of man: Halloween  producer Jason Blum, the  wildly successful force behind Blumhouse Productions.Here on the OppLoans Financial Sense blog, we write a lot about how to make your money go farther. That’s why we’re taking some time out of our busy schedule to review Mr. Blums money-making achievements. With Halloween poised for some major box office returns, its becoming impossible to ignore:  Jason Blum has cracked the Hollywood code. The horror formula: popularity + frugality = profit.Compared to the hundreds of millions of dollars it c osts to produce an action blockbuster (like, say a Marvel movie or a Star War), horror movies are relatively inexpensive to make. In fact, the horror genre has never been one that racked up massive production costs. Rubber masks and shadows are both quite cheap.For instance, the original Halloween from legendary director John Carpenter only cost a paltry $325,000 to produce. And when you add in the fact that it made $47 million at the box officeâ€"almost 150 times what it cost to makeâ€"that’s quite the return on investment!Jason Blum has taken this approach and filed it down to an exceptionally sharp, stabby point. In an age where Hollywood is increasingly relying on a few massive tentpole films to turn a profitâ€"films that can lose boatloads of money if they aren’t mega-hitsâ€"Blum does the opposite: Blumhouse produces a lot of movies at a very low-cost, oftentimes giving young up-and-coming directors a degree of artistic freedom to do their thing.The results have been stupen dous, so much so that many of their films have turned into successful franchises. Did you go and see The Nun? That was a Blumhouse film. Big fan of The First Purge? Blumhouse. Do you remember how scared you were walking out of Paranormal Activity? Guess what? That was Blumhouse.Blumhouse films are oftentimes very well-made, going to show that budget doesn’t always translate to results. And with horror films being an increasingly popular genre, they have made money hand-over-fist at the box office. It’s a formula that’s starting to catch on, as seen by the success A Quiet Place earlier this year.Want to see some evidence? Were happy you asked! Let’s take a walk down movie memory lane and marvel at Jason Blum’s success.With blockbusters, it takes money to make money.  Before we get to Blum, let’s talk a little bit about Hollywood in general. Right now, studios don’t really aim for mid-budget successes: movies that cost  $40 million and make just under $100 million at the box office. Instead, it’s all about action blockbuster franchisesâ€"many of which are based on pre-existing intellectual properties like comic book characters (Marvel), Y.A. novels, (Harry Potter), or older movie franchises (Jurassic World/Star Wars).When they’re successful, these movies make a lot of money, with more films crossing the billion-dollar worldwide box office mark than ever before. But when they fail, even a box office haul in the mid-hundred millions can be a failure. For one example, see last year’s Justice League, which made over $650 million worldwide, but on a $300 million budget plus the hefty cost of a giant global marketing campaign. Well over half-a-billion dollars, and not a smiling Warner Bros. exec in sight.Blockbusters have the potential to make hundreds of millions, possibly even billions of dollarsâ€"far more than any Blumhouse film has a made (yet). But the cost of making these films is so high that the return on investment is actually much lower. The ROI for horror movies is much,  much  higher.Let’s say you had $1,000 to invest in a movie and you are given two choices: You can buy a tiny piece of a future Marvel film versus a tiny piece of the next Conjuring movie. Contrary to what you might think, you should choose the Conjuring film over the Marvel one. The return on investment will be much, much greater.To give you an idea, here is some data regarding the year’s top five movies (box office numbers current as of 10/12/18), as well as the top five movies from each of the past five years. Using data from Box Office Mojo and The Numbers, weve laid out each film’s domestic, international, and worldwide grosses; plus their production costs (not including marketing).We also include the films’ return on investment (ROI), or their worldwide grosses divided by their production costs minus one and then expressed as a percentage. The “minus one” part, by the way, accounts for the movie making back its original budget. A film that grossed exactly the amount it cost would have a zero percent ROI, a film that made twice its budget would have a 100 percent ROI, and so on.For each year, we also tallied the total worldwide grosses and production costs for all five films combined plus their overall ROI. EnjoyTop 5 highest-grossing movies of 20181. Avengers: Infinity WarDomestic Gross$678,815,482Foreign Gross$1,367,810,676Worldwide Gross$2,046,626,158Budget$300,000,000Return on Investment582.21%2. Black PantherDomestic Gross$700,059,566Foreign Gross$646,848,980Worldwide Gross$1,346,908,546Budget$200,000,000Return on Investment573.45%3. Jurassic World: Fallen KingdomDomestic Gross$416,769,345Foreign Gross$888,038,727Worldwide Gross$1,304,808,072Budget$170,000,000Return on Investment767.53%4. Incredibles 2Domestic Gross$607,210,045Foreign Gross$614,182,618Worldwide Gross$1,221,392,663Budget$200,000,000Return on Investment510.70%5. Mission Impossible: FalloutDomestic Gross$219,866,851Foreign Gross$570,473,501 Worldwide Gross$790,340,352Budget$178,000,000Return on Investment344.01%Total 2018 Box Office NumbersOverall Worldwide Gross$6,710,075,791Overall Budgets$1,048,000,000Overall Return on Investment540.27%Top 5 highest-grossing movies of 20171. Star Wars: The Last JediDomestic Gross$620,181,382Foreign Gross$712,358,507Worldwide$1,332,539,889Budget$317,000,000Return on Investment320.36%2. Beauty and the BeastDomestic Gross$504,014,165Foreign Gross$759,506,961Worldwide Gross$1,263,521,126Budget$160,000,000Return on Investment689.70%3. The Fate of the FuriousDomestic Gross$226,008,385Foreign Gross$1,009,996,733Worldwide Gross$1,236,005,118Budget$250,000,000Return on Investment394.40%4. Despicable Me 3Domestic Gross$264,624,300Foreign Gross$770,175,109Worldwide Gross$1,034,799,409Budget$80,000,000Return on Investment1,193.50%5. Jumanji: Welcome to the JungleDomestic Gross$404,515,480Foreign Gross$557,562,066Worldwide Gross$962,077,546Budget$90,000,000Return on Investment968.98%Total 2017 B ox Office NumbersOverall Worldwide Gross$5,828,943,088Overall Budgets$897,000,000Overall Return on Investment549.83%Top 5 highest-grossing movies of 20161. Captain America: Civil WarDomestic Gross$408,084,349Foreign Gross$745,220,146Worldwide Gross$1,153,304,495Budget $250 million$250,000,000Return on Investment361.32%2. Rogue One: A Star Wars StoryDomestic Gross$532,177,324Foreign Gross$523,879,949Worldwide Gross$1,056,057,273Budget$200,000,000Return on Investment428.03%3. Finding DoryDomestic Gross$486,295,561Foreign Gross$542,275,328Worldwide Gross$1,028,570,889Budget$200,000,000Return on Investment414.29%4. ZootopiaDomestic Gross$341,268,248Foreign Gross$682,515,947Worldwide Gross$1,023,784,195Budget$150,000,000Return on Investment582.52%5. The Jungle BookDomestic Gross$364,001,123Foreign Gross$602,549,477Worldwide Gross$966,550,600Budget$175,000,000Return on Investment452.31%Total 2016 Box Office NumbersOverall Worldwide Gross$5,228,267,452Overall Budgets$975,000,000Overall Ret urn on Investment436.23%Top 5 highest-grossing movies of 20151. Star Wars: The Force AwakensDomestic Gross$936,662,225Foreign Gross$1,131,561,399Worldwide Gross$2,068,223,624Budget$245,000,000Return on Investment744.17%2. Jurassic WorldDomestic Gross$652,270,625Foreign Gross$1,019,442,583Worldwide Gross$1,671,713,208Budget$150,000,000Return on Investment1,014.48%3. Furious 7Domestic Gross$353,007,020Foreign Gross$1,163,038,891Worldwide Gross$1,516,045,911Budget $190 million$190,000,000Return on Investment697.92%4. Avengers: Age of UltronDomestic Gross$459,005,868Foreign Gross$946,397,826Worldwide Gross$1,405,403,694Budget$250,000,000Return on Investment462.16%5. MinionsDomestic Gross$336,045,770Foreign Gross$823,352,627Worldwide Gross$1,159,398,397Budget$74,000,000Return on Investment1,466.75%Total Box 2015 Office NumbersOverall Worldwide Gross$7,820,784,834Overall Budgets$909,000,000Overall Return on Investment760.37%Top 5 highest-grossing movies of 20141. Transformers: Age of Exti nctionDomestic Gross$245,439,076Foreign Gross$858,614,996Worldwide Gross$1,104,054,072Budget$210,000,000Return on Investment425.74%2. The Hobbit: The Battle of the Five ArmiesDomestic Gross$255,119,788Foreign Gross$700,900,000Worldwide Gross$956,019,788Budget$250,000,000Return on Investment282.41%3. Guardians of the GalaxyDomestic Gross$333,176,600Foreign Gross$440,152,029Worldwide Gross$773,328,629Budget$170,000,000Return on Investment354.90%4. MaleficentDomestic Gross$241,410,378Foreign Gross$517,129,407Worldwide Gross$758,539,785Budget$180,000,000Return on Investment321.41%5. The Hunger Games: Mockingjay (Part 1)Domestic Gross$337,135,885Foreign Gross$318,220,826Worldwide Gross$755,356,711Budget$125,000,000Return on Investment504.29%Total 2014 Box Office NumbersOverall Worldwide Gross$4,347,298,985Overall Budgets$935,000,000Overall Return on Investment364.95%Top 5 highest-grossing movies of 20131. FrozenDomestic Gross$400,738,009Foreign Gross$875,742,326Worldwide Gross$1,276,480, 335Budget$150,000,000Return on Investment750.99%2. Iron Man 3Domestic Gross$409,013,994Foreign Gross$805,797,258Worldwide Gross$1,214,811,252Budget$200,000,000Return on Investment507.41%3. Despicable Me 2Domestic Gross$368,061,265Foreign Gross$602,700,620Worldwide Gross$970,761,885Budget$76,000,000Return on Investment1,177.32%4. The Hobbit: The Desolation of SmaugDomestic Gross$258,366,855Foreign Gross$700,000,000Worldwide Gross$958,366,855Budget$250,000,000Return on Investment283.35%5. The Hunger Games: Catching FireDomestic Gross$424,668,047Foreign Gross$440,343,699Worldwide Gross$865,011,746Budget$130,000,000Return on Investment565.39%Total 2013 Box Office NumbersOverall Worldwide Gross$5,285,432,073Overall Budgets$806,000,000Overall Return on Investment555.76%Whats the average ROI for a Hollywood blockbuster?Remember, these are the numbers for the top-five grossing movies of the past six years. Basically, these films were the best of the best (or at least the most profitable of the profitable).Once again, here are the overall ROI’s for all six years that we surveyed:2018: 540.27 percent2017: 549.83 percent2016: 436.23 percent2015: 760.37  percent2014: 364.95  percent2013: 555.76  percentSo in general, the top five films in every given year make a little over five times their budget at the box office. 2014 was a bit of a down year, with only the number five movie, The Hunger Games: Mockingjay (Part I) grossing more than five times its budget. Likewise, 2015 was a great year, with two movies crossing the 10x mark, and Minions (which only cost $74 million to produce) grossing over 14 times its relatively modest budget.As a quick sidebar: the performance of the Despicable Me franchise is truly legendary. From this list, we have:Despicable Me 2: 1,177.32%Minions: 1,466.75%Despicable Me 3: 1,193.50%Neither of these three films failed to gross less than 11 times their budget. Amazing. And that’s not even counting the money made on merchandising. As you may ha ve noticed, people love those dang Minions.But back to the task at hand: Overall, a box office gross that’s over five times your budget is the standard being set by these top-performing films.Now let’s see the kind of ROI that Blumhouse is producing. Here are the same sets of numbers for the The  Conjuring, The Purge, Insidious, and Paranormal Activity franchises, plus three other noteworthy Blumhouse films from the past few years:The ConjuringThe Conjuring (2013)Domestic Gross$137,400,141Foreign Gross$182,094,497Worldwide Gross$319,494,638Budget$20,000,000Return on Investment1,497.47%Annabelle (2014)  Domestic Gross  $84,273,813  Foreign Gross  $172,773,848  Worldwide Gross  $257,047,661  Budget  $15,000,000  Return on Investment  1,613.65%  The Conjuring 2 (2016)  Domestic Gross  $102,470,008  Foreign Gross  $217,922,810  Worldwide Gross  $320,392,818  Budget  $40,000,000  Return on Investment  700.98%Annabelle: Creation (2017)Domestic Gross$102,092,201Foreign Gross$204,423,68 3Worldwide Gross$306,515,884Budget$15,000,000Return on Investment1,943.44%The Nun (2018)Domestic Gross$114,149,556Foreign Gross$233,700,000Worldwide Gross$347,849,556Budget$22,000,000Return on Investment1,481.13%Total Box Office NumbersOverall Worldwide Gross$1,551,300,557Overall Budgets$112,000,000Overall Return on Investment1,285.09%The PurgeThe Purge (2013)Domestic Gross$64,473,115Foreign Gross$24,855,512Worldwide Gross$89,328,627Budget$3,000,000Return on Investment2,877.62%The Purge: Anarchy (2014)Domestic Gross$71,962,800Foreign Gross$39,965,565Worldwide Gross$111,928,365Budget$9,000,000Return on Investment1,143.65%The Purge: Election Year (2016)Domestic Gross$79,213,375Foreign Gross$39,374,505Worldwide Gross$118,587,880Budget$10,000,000Return on Investment1,085.88%The First Purge (2018)Domestic Gross$69,086,325Foreign Gross$66,800,000Worldwide Gross$135,886,325Budget $13 million$13,000,000Return on Investment945.28%Total Box Office NumbersOverall Worldwide Gross$477,731,197Ove rall Budgets$35,000,016Overall Return on Investment1,264.95%InsidiousInsidious (2010)Domestic Gross$54,009,150Foreign Gross$43,000,000Worldwide Gross$97,009,150Budget$1,500,000Return on Investment6,367.28%Insidious: Chapter 2 (2013)Domestic Gross$83,586,447Foreign Gross$78,332,871Worldwide Gross$161,919,318Budget$5,000,000Return on Investment3,138.39%Insidious: Chapter 3 (2015)Domestic Gross$52,218,558Foreign Gross$60,765,331Worldwide Gross$112,983,889Budget$10,000,000Return on Investment1,029.84%Insidious: The Last Key (2018)Domestic Gross$67,560,690Foreign Gross$100,140,258Worldwide Gross$167,700,948Budget$10,000,000Return on Investment1,577.01%Total Box Office NumbersOverall Worldwide Gross$552,613,305Overall Budgets$26,500,010Overall Return on Investment1,985.33%Split, Get Out, and Happy Death DayIf you had a bunch of M. Night Shyamalan stock that you purchased in 2002 and had been holding onto ever since, waiting for its value to recover, then you were a huge fan of Shyamalan†™s intimate, James McAvoy-starring Split,  the best movie he had made since  Unbreakable, which is ironic for reasons we wont spoil here.Oh, and judging by Split’s superb box office performance, Shyamalan diehards were not the only ones who dug the film:Split (2016)Domestic Gross$138,291,365Foreign Gross$140,162,993Worldwide Gross$278,454,358Budget$9,000,000Return on Investment2,893.94%Churning out low-budget horror movies is not a viable path to Oscar gold, right? Wrong. Blum has been nominated for two Best Picture Oscars, the first for Damien Chazelle’s Whiplashâ€"which doesn’t quite count as a horror movieâ€"and Jordan Peele’s Get Outâ€"which definitely does.In addition to being a critical and zeitgeist-conquering success, Get Out also did gangbusters at the box office:Get Out (2017)Domestic Gross$176,040,665Foreign Gross$79,416,699Worldwide Gross$255,457,364Budget$4,500,000Return on Investment5,576.83%If you don’t remember Happy Death Day, that’s okay. The 2017 Groun dhog Day-style slasher film was pretty fun, but not exactly groundbreaking. We decided to include it because, frankly, it was a film that did pretty well. Not great, just pretty well.Then again, “pretty well” is all that Blumhouse needs to make a lot of money:Happy Death Day (2017)Domestic Gross$55,683,845Foreign Gross$66,954,033Worldwide Gross$122,637,878Budget$4,800,000Return on Investment2,454.96%Paranormal ActivityFinally, we’re taking it back to where it all started: Paranormal Activity. Did you know that this movie was shot by filmmaker Oren Peli in only seven days on a budget of wait for it $15,000?!Blum saw the film at a festival, loved it, and joined up with Peli to get it released. $193 million in box office receipts later, a business model was born.Paranormal Activity (2007)Domestic Gross$107,918,810Foreign Gross$85,436,990Worldwide Gross$193,355,800Budget$15,000Return on Investment1,288,938.67%Paranormal Activity 2 (2010)Domestic Gross$84,752,907Foreign Gross$92, 759,125Worldwide Gross$177,512,032Budget$3,000,000Return on Investment5,817.07%Paranormal Activity 3 (2011)Domestic Gross$104,028,807Foreign Gross$103,011,037Worldwide Gross$207,039,844Budget$5,000,000Return on Investment4,040.80%Paranormal Activity 4 (2012)Domestic Gross$53,900,335Foreign Gross$88,917,657Worldwide Gross$142,817,992Budget$5,000,000Return on Investment2756.36%Paranormal Activity: The Marked Ones (2014)Domestic Gross$32,462,372Foreign Gross$58,442,482Worldwide Gross$90,904,854Budget$5,000,000Return on Investment1,718.10%Paranormal Activity: The Ghost Dimension (2015)Domestic Gross$18,300,124Foreign Gross$60,603,000Worldwide Gross$78,903,124Budget $10 million$10,000,000Return on Investment689.03%Total Box Office NumbersOverall Worldwide Gross$811,630,522Overall Budgets$18,015,000Overall Return on Investment4405.30%The worst film in this franchise still had an ROI of almost 700 percent. Meanwhile, the franchises best film (the first one), had an ROI of 1.29 million perc ent.Were going to repeat that:  1.29 million percent!!!Now, it’s not as though Blumhouse went around trying to produce every movie for only $15,000. But the success of Paranormal Activity paved the way for a decade-plus of great scares and scary big profits, with more of both likely to come.Horror movies: the best investment in Hollywood.Real quick, let’s recap the total ROIs for the Blumhouse’s major franchises:The Conjuring: 1,285.09 percentThe Purge: 1,264.95 percentInsidious: 1,985.33 percentParanormal Activity: 4,405.30 percentAs time has gone on, the ROIs for these films have decreased. This isn’t due to them being any less popularâ€"the Conjuring films have brought in over a billion dollarsâ€"but to rising budgets. Paranormal Activity required a bedroom and stationary camera, whereas The Nun needed an entire monastery. One was shot for $15,000, the other for $22 million.But still, The Nun only cost $22 million and it’s made almost $350 million worldwide! A couple ex tra million upfront can translate to tens of millions in box office on the other end.And even with an  ROI of “only” 1,285 percent, The Conjuring and its ilk dwarf their blockbuster brethren in terms of profitability. They have a return of almost 1,300 percent versus an average Top-5 blockbuster return around 500 percent. If any broker were to tell you he could get you 13 times your money versus five times your money, it wouldn’t be any choice at all!And while any fund manager promising you those kinds of returns is almost certainly running a Ponzi scheme, Blum makes his money the legitimate way: with good old-fashioned spooks and scares. The key to building any business is to make something that people want to buy. And until people stop wanting horror movies, Blumhouse is going to remain the best in the biz.Whats the one thing that could possibly unseat him? Thats right. Minions. People love Minions.If you want to read more about the financial side of pop culture, check out t hese related posts and articles from OppLoans:10 Money Lessons From the Worst Contracts in NBA History5 Financial Facts About the Olympics That Might Surprise YouWhich Avenger Gives Marvel the Most Bang for Its Buck?How Student-Athlete Insurance Protects Financial FuturesHow to Get Rich Quick in These 6 Fantasy WorldsHave a weird money question? We want to answer it! You can find us  on  Facebook  and  Twitter.Visit OppLoans on  YouTube  |  Facebook  |  Twitter  |  LinkedIN