Horror films are a popular category in American audiences. Despite the fact that making the horror movie is not expensive, the amount it grosses in terms of profits is high. In the US, for example, horror films made more than $413 million in 2012, while comedy, which is the highest, earned $1.64 billion. However, what you should note is that making horror movies cost less than many lottery jackpots. Because the cost of creating them is minimal compared to the other rival genres, horror movies are the best ventures for individuals who don’t want to take high risks in the film industry. This blog explores various business aspects of horror movies and examines why they’re the best for entrepreneurs who wish to invest in the film industry.
The horror approach: Popularity + Frugality=Profit
Compared to the expense of creating an action blockbuster, horror films cost less to produce. Various examples come into mind to illustrate this point. For instance, Halloween took only $325,000 as production cost. However, the same film made $47 million, which is nearly 150 times the amount of its cost of production. This was a higher amount of Return of Investment (ROI).
Many entrepreneurs who venture into the film industry apply this formula in horror movie production. For instance, Blumhouse makes many films at low-cost, which enables the up-coming film directors to exercise their talent. The outcomes of this approach are fantastic as the company’s films are now successful stories in the market. Think about The Nun, The First Purge, and Paranormal Activity? All the above horror titles were inexpensive at the production stage, but now they’ve racked massive amounts for Blumhouse.
The ROI for Horror exceptionally high
What crops in your mind when you think of movies that make huge profits in the film industry are the blockbusters like Titanic and Avatar from Hollywood.
However, that may not be the cause when you’re analyzing the ROI. While the blockbuster category may generate a lot of money, the cost of creating them is equally high. Additionally, blockbusters may not be reliable in making ROI faster for the studios and entrepreneurs.
The category that offers the entrepreneur high ROI are those films with minimal production amounts. This is where the horror flicks come in. As an illustration, the cost of production for ‘Paranormal Activity’ was $15,000. However, its box office gross was $161,830,890 representing an ROI of 539,336.30%. Another horror movie, ‘The Night of the Living Dead,’ had an ROI of 13, 057%.
Compare the above stats with action movies. For instance, from the time it was produced up to date, ‘Avatar’ has racked in over $2.7 billion, and its ROI is only 500%. From this illustration, what you can learn is that despite blockbusters touted as the best, their ROI is low, and you may not bank on them if you want quick ROI.
In case you’ve got a small film production budget, it’s advisable to go for horror films as their production costs are low. Furthermore, this category has a higher ROI, as illustrated in the blog.