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

Alex Huntsberger
Alex Huntsberger has covered loans, credit scores, and personal finance for OppLoans since 2015. He is a graduate of Oberlin College and a regular contributor to the Chicago Sun-Times.
Updated on March 18, 2021
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People 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. Blum’s money-making achievements. With Halloween poised for some major box office returns, it’s 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 costs 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 office—almost 150 times what it cost to make—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 profit—films that can lose boatloads of money if they aren’t mega-hits—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 stupendous, 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? We’re 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 franchises—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 dollars—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, we’ve 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. Enjoy…

Top 5 highest-grossing movies of 2018

1. Avengers: Infinity War
Domestic Gross$678,815,482
Foreign Gross$1,367,810,676
Worldwide Gross$2,046,626,158
Return on Investment582.21%
2. Black Panther
Domestic Gross$700,059,566
Foreign Gross$646,848,980
Worldwide Gross$1,346,908,546
Return on Investment573.45%
3. Jurassic World: Fallen Kingdom
Domestic Gross$416,769,345
Foreign Gross$888,038,727
Worldwide Gross$1,304,808,072
Return on Investment767.53%
4. Incredibles 2
Domestic Gross$607,210,045
Foreign Gross$614,182,618
Worldwide Gross$1,221,392,663
Return on Investment510.70%
5. Mission Impossible: Fallout
Domestic Gross$219,866,851
Foreign Gross$570,473,501
Worldwide Gross$790,340,352
Return on Investment344.01%


Total 2018 Box Office Numbers
Overall Worldwide Gross$6,710,075,791
Overall Budgets$1,048,000,000
Overall Return on Investment540.27%

Top 5 highest-grossing movies of 2017

1. Star Wars: The Last Jedi
Domestic Gross$620,181,382
Foreign Gross$712,358,507
Return on Investment320.36%
2. Beauty and the Beast
Domestic Gross$504,014,165
Foreign Gross$759,506,961
Worldwide Gross$1,263,521,126
Return on Investment689.70%
3. The Fate of the Furious
Domestic Gross$226,008,385
Foreign Gross$1,009,996,733
Worldwide Gross$1,236,005,118
Return on Investment394.40%
4. Despicable Me 3
Domestic Gross$264,624,300
Foreign Gross$770,175,109
Worldwide Gross$1,034,799,409
Return on Investment1,193.50%
5. Jumanji: Welcome to the Jungle
Domestic Gross$404,515,480
Foreign Gross$557,562,066
Worldwide Gross$962,077,546
Return on Investment968.98%


Total 2017 Box Office Numbers
Overall Worldwide Gross$5,828,943,088
Overall Budgets$897,000,000
Overall Return on Investment549.83%

Top 5 highest-grossing movies of 2016

1. Captain America: Civil War
Domestic Gross$408,084,349
Foreign Gross$745,220,146
Worldwide Gross$1,153,304,495
Budget $250 million$250,000,000
Return on Investment361.32%
2. Rogue One: A Star Wars Story
Domestic Gross$532,177,324
Foreign Gross$523,879,949
Worldwide Gross$1,056,057,273
Return on Investment428.03%
3. Finding Dory
Domestic Gross$486,295,561
Foreign Gross$542,275,328
Worldwide Gross$1,028,570,889
Return on Investment414.29%
4. Zootopia
Domestic Gross$341,268,248
Foreign Gross$682,515,947
Worldwide Gross$1,023,784,195
Return on Investment582.52%
5. The Jungle Book
Domestic Gross$364,001,123
Foreign Gross$602,549,477
Worldwide Gross$966,550,600
Return on Investment452.31%


Total 2016 Box Office Numbers
Overall Worldwide Gross$5,228,267,452
Overall Budgets$975,000,000
Overall Return on Investment436.23%

Top 5 highest-grossing movies of 2015

1. Star Wars: The Force Awakens
Domestic Gross$936,662,225
Foreign Gross$1,131,561,399
Worldwide Gross$2,068,223,624
Return on Investment744.17%
2. Jurassic World
Domestic Gross$652,270,625
Foreign Gross$1,019,442,583
Worldwide Gross$1,671,713,208
Return on Investment1,014.48%
3. Furious 7
Domestic Gross$353,007,020
Foreign Gross$1,163,038,891
Worldwide Gross$1,516,045,911
Budget $190 million$190,000,000
Return on Investment697.92%
4. Avengers: Age of Ultron
Domestic Gross$459,005,868
Foreign Gross$946,397,826
Worldwide Gross$1,405,403,694
Return on Investment462.16%
5. Minions
Domestic Gross$336,045,770
Foreign Gross$823,352,627
Worldwide Gross$1,159,398,397
Return on Investment1,466.75%


Total Box 2015 Office Numbers
Overall Worldwide Gross$7,820,784,834
Overall Budgets$909,000,000
Overall Return on Investment760.37%

Top 5 highest-grossing movies of 2014

1. Transformers: Age of Extinction
Domestic Gross$245,439,076
Foreign Gross$858,614,996
Worldwide Gross$1,104,054,072
Return on Investment425.74%
2. The Hobbit: The Battle of the Five Armies
Domestic Gross$255,119,788
Foreign Gross$700,900,000
Worldwide Gross$956,019,788
Return on Investment282.41%
3. Guardians of the Galaxy
Domestic Gross$333,176,600
Foreign Gross$440,152,029
Worldwide Gross$773,328,629
Return on Investment354.90%
4. Maleficent
Domestic Gross$241,410,378
Foreign Gross$517,129,407
Worldwide Gross$758,539,785
Return on Investment321.41%
5. The Hunger Games: Mockingjay (Part 1)
Domestic Gross$337,135,885
Foreign Gross$318,220,826
Worldwide Gross$755,356,711
Return on Investment504.29%


Total 2014 Box Office Numbers
Overall Worldwide Gross$4,347,298,985
Overall Budgets$935,000,000
Overall Return on Investment364.95%

Top 5 highest-grossing movies of 2013

1. Frozen
Domestic Gross$400,738,009
Foreign Gross$875,742,326
Worldwide Gross$1,276,480,335
Return on Investment750.99%
2. Iron Man 3
Domestic Gross$409,013,994
Foreign Gross$805,797,258
Worldwide Gross$1,214,811,252
Return on Investment507.41%
3. Despicable Me 2
Domestic Gross$368,061,265
Foreign Gross$602,700,620
Worldwide Gross$970,761,885
Return on Investment1,177.32%
4. The Hobbit: The Desolation of Smaug
Domestic Gross$258,366,855
Foreign Gross$700,000,000
Worldwide Gross$958,366,855
Return on Investment283.35%
5. The Hunger Games: Catching Fire
Domestic Gross$424,668,047
Foreign Gross$440,343,699
Worldwide Gross$865,011,746
Return on Investment565.39%


Total 2013 Box Office Numbers
Overall Worldwide Gross$5,285,432,073
Overall Budgets$806,000,000
Overall Return on Investment555.76%

What’s 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%
  • 2017: 549.83%
  • 2016: 436.23%
  • 2015: 760.37%
  • 2014: 364.95%
  • 2013: 555.76%

So 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 have 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 Conjuring

The Conjuring (2013)
Domestic Gross$137,400,141
Foreign Gross$182,094,497
Worldwide Gross$319,494,638
Return 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$102,092,201
Foreign Gross$204,423,683
Worldwide Gross$306,515,884
Return on Investment1,943.44%
The Nun (2018)
Domestic Gross$114,149,556
Foreign Gross$233,700,000
Worldwide Gross$347,849,556
Return on Investment1,481.13%


Total Box Office Numbers
Overall Worldwide Gross$1,551,300,557
Overall Budgets$112,000,000
Overall Return on Investment1,285.09%

The Purge

The Purge (2013)
Domestic Gross$64,473,115
Foreign Gross$24,855,512
Worldwide Gross$89,328,627
Return on Investment2,877.62%
The Purge: Anarchy (2014)
Domestic Gross$71,962,800
Foreign Gross$39,965,565
Worldwide Gross$111,928,365
Return on Investment1,143.65%
The Purge: Election Year (2016)
Domestic Gross$79,213,375
Foreign Gross$39,374,505
Worldwide Gross$118,587,880
Return on Investment1,085.88%
The First Purge (2018)
Domestic Gross$69,086,325
Foreign Gross$66,800,000
Worldwide Gross$135,886,325
Budget $13 million$13,000,000
Return on Investment945.28%


Total Box Office Numbers
Overall Worldwide Gross$477,731,197
Overall Budgets$35,000,016
Overall Return on Investment1,264.95%


Insidious (2010)
Domestic Gross$54,009,150
Foreign Gross$43,000,000
Worldwide Gross$97,009,150
Return on Investment6,367.28%
Insidious: Chapter 2 (2013)
Domestic Gross$83,586,447
Foreign Gross$78,332,871
Worldwide Gross$161,919,318
Return on Investment3,138.39%
Insidious: Chapter 3 (2015)
Domestic Gross$52,218,558
Foreign Gross$60,765,331
Worldwide Gross$112,983,889
Return on Investment1,029.84%
Insidious: The Last Key (2018)
Domestic Gross$67,560,690
Foreign Gross$100,140,258
Worldwide Gross$167,700,948
Return on Investment1,577.01%


Total Box Office Numbers
Overall Worldwide Gross$552,613,305
Overall Budgets$26,500,010
Overall Return on Investment1,985.33%

Split, Get Out, and Happy Death Day

If 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 won’t 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$138,291,365
Foreign Gross$140,162,993
Worldwide Gross$278,454,358
Return 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 Whiplash—which doesn’t quite count as a horror movie—and Jordan Peele’s Get Out—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$176,040,665
Foreign Gross$79,416,699
Worldwide Gross$255,457,364
Return on Investment5,576.83%

If you don’t remember Happy Death Day, that’s okay. The 2017 Groundhog 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$55,683,845
Foreign Gross$66,954,033
Worldwide Gross$122,637,878
Return on Investment2,454.96%

Paranormal Activity

Finally, 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$107,918,810
Foreign Gross$85,436,990
Worldwide Gross$193,355,800
Return on Investment1,288,938.67%
Paranormal Activity 2 (2010)
Domestic Gross$84,752,907
Foreign Gross$92,759,125
Worldwide Gross$177,512,032
Return on Investment5,817.07%
Paranormal Activity 3 (2011)
Domestic Gross$104,028,807
Foreign Gross$103,011,037
Worldwide Gross$207,039,844
Return on Investment4,040.80%
Paranormal Activity 4 (2012)
Domestic Gross$53,900,335
Foreign Gross$88,917,657
Worldwide Gross$142,817,992
Return on Investment2756.36%
Paranormal Activity: The Marked Ones (2014)
Domestic Gross$32,462,372
Foreign Gross$58,442,482
Worldwide Gross$90,904,854
Return on Investment1,718.10%
Paranormal Activity: The Ghost Dimension (2015)
Domestic Gross$18,300,124
Foreign Gross$60,603,000
Worldwide Gross$78,903,124
Budget $10 million$10,000,000
Return on Investment689.03%


Total Box Office Numbers
Overall Worldwide Gross$811,630,522
Overall Budgets$18,015,000
Overall Return on Investment4405.30%

The worst film in this franchise still had an ROI of almost 700 percent. Meanwhile, the franchise’s best film (the first one), had an ROI of 1.29 million percent.

We’re 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%
  • The Purge: 1,264.95%
  • Insidious: 1,985.33%
  • Paranormal Activity: 4,405.30%

As time has gone on, the ROIs for these films have decreased. This isn’t due to them being any less popular—the Conjuring films have brought in over a billion dollars—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 extra million upfront can translate to tens of millions in box office on the other end.

And even with an ROI of “only” 1,285%, The Conjuring and its ilk dwarf their blockbuster brethren in terms of profitability. They have a return of almost 1,300% versus an average Top-5 blockbuster return around 500%. 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.

What’s the one thing that could possibly unseat him? That’s right. Minions. People love Minions.

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