Recently NPR’s Planet Money examined the business model of Jason Blum who is one of the most successful low-budget movie producers of all time. He accomplished this status by thumbing his nose at the Hollywood trend of creating ever bigger and flashier movies, where the budgets expand as quickly and as broadly as the monetary risks they entail, and scaling movies back to basics. Instead of putting all of his resources into one big film, Blum finances smaller films, most of which are horror. Up to 40% of these films flop, but others hit and when they do he makes an absolute fortune. The risk is smaller but the profit is just as considerable as those of the bigger budget productions.

Blum’s three rules for creating a cheap horror movie are as follows:

1. Not too many speaking parts (you need to pay extras extra if they speak).
2. Not too many locations. This is why so many of his films take place in a house.
3. Pay stars as little as legally possible. He approaches actors more as investors than as employees – if the film does well, they will profit. The talent is as invested in the film as he is.
4. Never, ever break your budget. This is the rule the rest of Hollywood is afraid to stick to.

While these limitations restrict filmmakers in many ways, they force them to be creative and inventive in others. These films include the Paranormal Activity series and certainly many duds, but it has also resulted in some notable genre entries including Insidious (2011), Oculus (2013), and 13 Sins (2013), the last of which can be counted among Blum’s flops, as well as many others. It also resulted in the Academy Award winning Whiplash (2014). His most recent release, M. Night Shyamalan’s The Visit (2015), cost only five-million dollars to make and has already grossed over thirty-million as of this writing. For more evidence, here is a list of some of Blum’s horror offerings (source):

2009 Paranormal Activity Budget: $15,000 Gross: $193,355,800
2010 Paranormal Activity 2 Budget: $3,000,000 Gross: $177,512,032
2011 Insidious Budget: $1,500,000 Gross: $99,549,294
2011 Paranormal Activity 3 Budget: $5,000,000 Gross: $207,039,844
2012 Sinister Budget: $3,000,000 Gross: $82,015,113
2012 Paranormal Activity 4 Budget: $5,000,000 Gross: $142,817,992
2012 The Bay Budget: $2,000,000 Gross: $1,581,242
2013 Dark Skies Budget: $3,500,000 Gross: $27,858,103
2013 The Lords of Salem Budget: $1,500,000 Gross: $1,544,989
2013 The Purge Budget: $3,000,000 Gross: $89,328,627
2013 Insidious: Chapter 2 Budget: $5,000,000 Gross: $161,919,318
2014 Paranormal Activity: The Marked Ones Budget: $5,000,000 Gross: $90,904,854
2014 Oculus Budget: $5,000,000 Gross: $44,105,496
2014 13 Sins Budget: $4,000,000 Gross: $794,767
2014 The Purge: Anarchy Budget: $9,000,000 Gross: $110,602,999
2014 Ouija Budget: $5,000,000 Gross: $102,529,779
2015 The Lazarus Effect Budget: $3,300,000 Gross: $36,143,981
2015 Unfriended Budget: $1,000,000 Gross: $62,882,090
2015 Area 51 Budget: $5,000,000 Gross: $7,556
2015 Insidious: Chapter 3 Budget: $10,000,000 Gross: $109,518,558
2015 The Gallows Budget: $100,000 Gross: $38,164,410
2015 Sinister 2 Budget: $10,000,000 Gross: $31,775,300
2015 The Visit Budget: $5,000,000 Gross: $34,943,156

Blumhouse has become a staple in the genre over the past five years. While at least half of these films flop we’ve thus far been given a few diamonds in the rough each year, and I for one am excited for what is yet to come.

To listen to the full Planet Money episode, click here.

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