The folks behind Planet Money were confused as to why one of the worst films of 2012 was one of the most profitable: The Devil Inside. Looking a little deeper, they found that horror movies in general are a solid investment from studios, and that’s why they keep appearing.
Looking at data from Studio System, they went and looked at films from the last five years, and found that in general, horror films tend to be the most profitable. The reason? Horror films tend to cost less, and make quite a bit at the box office.
Look at this year’s big summer flick, Jurassic World. It has made $1.6 billion in profit worldwide, but it cost an estimated $300 million to produce and market. That’s an ROI of roughly 533 percent. By contrast, the horror hit Paranormal Activity 2 made $236 million but only cost $9.4 million to produce and market. That’s an ROI of 2,510 percent.
Another reason for some of the success here? According to Planet Money, marketing. The Devil Inside cost one million dollars to make, but was marketed with almost five times that. Not only that, the film opened across the country because of the efforts of the marketing team. It worked, too: the film grossed $101,758,490 worldwide, which is a fantastic return on investment for.
The podcast makes a really good point when it comes to approaching box office returns: it’s not the total box office amount that you have to look at, but how much the film makes in relation to its production costs. If a film makes three hundred million dollars, that sounds impressive, but it’s less appealing to studios when they have to dump one hundred and fifty million in to make it in the first place.