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

By Frank Pallotta, CNN Business

It’s a scary time in Hollywood.

The streaming revolution has transformed the entertainment industry and studios are trying to keep up. But one company that doesn’t seem too frightened of the future is best known for scaring others: Blumhouse Productions.

You may not have heard of Blumhouse, but you’ve likely heard of its scary movies. The studio has produced over 70 films that have racked up more than $5 billion at the worldwide box office. That includes hits like “Get Out,” “The Black Phone,” “The Purge,” “Paranormal Activity,” and the rebooted “Halloween” trilogy. “Halloween Ends,” the trilogy’s final film, hits theaters and streaming this weekend.

But what makes Blumhouse notable is not how many hits it’s had, but how it’s made those hits.

The company’s model is best known for keeping budgets low and paying its creators on “the back end.” That means cutting them in for a share of the film’s profits in exchange for lower paydays upfront.

The model cuts down risk at the box office since the films don’t have such a high budgetary bar to clear. So at a time when streaming is taking over and theater audiences are hard to come by, Blumhouse has found a way to keep making a killing.

Scary low budgets, scary good results

Take for example, “The Black Phone,” the company’s big horror hit from this summer. The film, which stars Ethan Hawke, made $160 million worldwide, according to Comscore. That may not seem like a lot, but it’s sizable 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 back $144 million. 2013’s “The Purge” cost $3 million and made $91 million. And most notable of all, 2017’s “Get Out” made $255 million on just a $4.5 million budget.

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

“We’re really known for low budgets because low budgets are profitable,” he told CNN Business. “That to me is second to the fact that low budgets allow us to be playful, allow us to take risks, allow us to do things outside of the box because we’re not betting a bunch of capital on every movie.”

Blum explained that Blumhouse distributes its films in “a very traditional way” via Universal Pictures, but the productions are run “entirely independently.” This allows the studio to work inside the system but stay true to its brand.

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

Mixing worlds together is also at play for Blumhouse when it comes to releasing films. Many studios are struggling with the question of movies to put in theaters and which to put on streaming.

But Abhijay Prakash, the company’s president, rejects “the notion that it’s theatrical versus streaming.”

“There’s some movies that do better… launched in theatrical than go to streaming, and there’s others that should just go straight to streaming,” he told CNN Business.

And in the case of “Halloween Ends,” it’s both.

“It’s Halloween. I guess everyone’s entitled to one good scare”

The new film, which stars Jamie Lee Curtis as she — once again — takes on serial killer Michael Myers, are available on NBCUniversal’s streaming platform Peacock and in theaters on Thursday. Despite being available at home, “Halloween Ends” is set for a big opening of $50 million or more in North America. The film is already off to a solid start bringing in $5.4 million on Thursday night.

If history is any indication, the in theaters and at home strategy should be successful since “Halloween Kills,” its 2021 predecessor, followed the same playbook, and made roughly $50 million during for opening weekend. “Halloween,” the 2018 film that launched the new trilogy, debuted exclusively in theaters and opened to $76 million, but that was a completely different pre-pandemic marketplace.

“You can see it works in both,” Prakash said of last year’s “Halloween Kills.” “Of course, the unique moment that 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 viewers engage with stories “has changed over time,” but “narrative storytelling, and horror’s place in it — scary stories — that’s not going away.”

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

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

“Horror is a collective activity. You want to see horror with a bunch of people,” he said. “You get much more frightened in a movie theater when there are a bunch of people around, you want to grab the person next to you, you want to hear people screaming.”

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