It’s a scary time in Hollywood. But the horror studio behind hits like ‘Halloween Ends’ is making a killing

New York
CNN business

It’s a scary time in Hollywood.

The streaming revolution has transformed the entertainment industry and studios are scrambling to keep up. But one company that isn’t too afraid of the future is known to scare others: Blumhouse Productions.

You may not have heard of Blumhouse, but you’ve probably heard of their horror films. The studio has produced more than 70 films that have grossed over $5 trillion at the worldwide box office. It includes hits like “Get Out,” “The Black Phone,” “The Purge,” “Paranormal Activity” and the rebooted “Halloween” trilogy. “Halloween Ends”, the final film of the trilogy, will arrive in theaters and via streaming this weekend.

But what makes Blumhouse stand out isn’t how many hits it’s had, but how it’s made those hits.

The company’s model is known for keeping budgets low and paying creators “on the back end.” This means taking a cut of the film’s profits in exchange for lower salaries up front.

The model reduces the risk at the box office as films don’t have as much of a budget bar to clear. So in an age where streaming is taking over and theater audiences are hard to come by, Blumhouse has found a way to keep making a killing.

Take, for example, “The Black Phone,” the company’s big horror hit this summer. The film, starring Ethan Hawke, earned $160 million worldwide, according to Comscore (SCOR). That might not seem like much, but it’s remarkable considering the film’s budget was just $16 million.

This has been the template throughout Blumhouse’s history: 2020’s “The Invisible Man” was made for $7 million and brought in $144 million. The 2013 film “The Purge” cost $3 million and grossed $91 million. And most notably, 2017’s “Get Out” earned $255 million on a $4.5 million budget.

For Jason Blum, the company’s CEO and founder, making movies on low budgets is about more than saving money.

“We’re known for low budgets because low budgets are profitable,” he told CNN Business. “For me that’s secondary to what low budgets allow us to play, because it allows us to take risks, because it allows us to do things out there, because we’re not betting a ton of capital on every movie.”

Blum explained that Blumhouse distributes its films “in a very traditional way” through Universal Pictures, but the productions are done “completely independently”. This allows the studio to work within the system, but remain true to its brand.

“We have all the creative controls, we have all the financial controls,” he said. “So these films are produced in a cocoon, far away from the forces of Hollywood. Then they are finished and I join the forces of Hollywood to take them out into the world.’

Blending worlds together is also at play for Blumhouse when it comes to releasing movies. Many studios are struggling with the issue of releasing movies in theaters and streaming.

But Abhijay Prakash, the company’s president, dismisses it as “theatrical versus streaming.”

“There are some movies that are better done … theatrically rather than going to streaming, and others that should go straight to streaming,” he told CNN Business.

And in the case of “Halloween Ends”, they are both.

As the new film starring Jamie Lee Curtis takes on serial killer Michael Myers, it once again airs on NBCUniversal’s Peacock platform and airs Thursday. Despite its domestic availability, “Halloween Ends” has a strong opening of $50 million or more in North America. The film is already off to a strong start bringing in $5.4 million on Thursday night.

If history is any indication, the theatrical and domestic strategy should be a success since “Halloween Kills,” its 2021 predecessor, followed the same playbook and earned around $50 million in its opening weekend. “Halloween,” the 2018 film that launched the new trilogy, opened exclusively in theaters and opened to $76 million, but it was a completely different market before the pandemic.

“You can see it works in both,” Prakash said of last year’s “Halloween Kills.” “Of course, the unique moment the world was in at the time contributed to that, but it proved to us that we can do both.”

Prakash added that the formats in which audiences engage with stories have “changed over time,” but “narrative storytelling and the place of horror — horror stories — that’s not going away.”

Scary stories don’t seem to be going away anytime soon, as horror is immune to Hollywood’s rapid changes. Universal’s “Nope,” Paramount’s “Smile” and 20th Century Studios’ “Barbarian” have all found audiences this year, even as streaming has taken off.

That’s because watching fear is more fun with other people around, according to Blum.

“Terror is a collective activity. You want to see fear with a bunch of people,” he said. “You get a lot more scared when there’s a bunch of people in a movie theater, when you want to grab the person next to you, when you want to hear people screaming.”