Movie News & Reviews

‘Ouija’ is part of new horror film economy: Fast, cheap and scarily profitable

When the low-budget horror flick “Ouija” opens this week, right in time for Halloween, moviegoers will be witnessing a very different product than what was designed by Universal Pictures when it optioned the film in 2008.

The story, licensed from Hasbro to feature its infamous “spirit board” and filmed for $5 million, follows a group of teenagers doing battle with an evil and ancient spirit. Three years ago, however, the movie’s producers were talking publicly about their plans for “Ouija” as a “Pirates of the Caribbean”-styled adventure romp.

The budget sat around $150 million, according to the Los Angeles Times. Michael Bay was set to produce, and McG (of “Charlie’s Angels” movie fame) was set to direct.

But when Universal balked at the cost, a hero lay in wait. Execs shipped it over to micro-budget horror movie extraordinaire Jason Blum, hired by the studio in 2011 on a three-year production deal (which was recently extended to 2024) shortly after his “Paranormal Activity” grossed $193 million on a $15,000 budget.

Because while “Ouija” had an uncertain future as a big-budget mega-franchise, it could be quickly made to suit the new horror economy that Blum has helped shape: cheap, scary, sequel-friendly.

Blum, who is credited as producing “Ouija,” is widely considered to be the founder of the current micro-budget horror movement after the five movies in the “Paranormal Activity” franchise, which he produced, grossed over $800 million worldwide while collectively costing less than half as much as the 2002 American remake of “The Ring.”

In reality, it is more accurate to say that Blum has refined the long-standing economics of the horror genre into an art form. For decades, horror franchises have been synonymous with cheap budgets and sequels that seemed to get fired out regardless of demand. “Friday the 13th Part VII — The New Blood” or “A Nightmare on Elm Street: The Dream Child” aren’t remembered fondly, or remembered at all, but according to Box Office Mojo, both made back their meager budgets several times over.

In the later part of the 1990s and early 2000s, horror budgets bloated. Adjusted for inflation, the budget of “I Know What You Did Last Summer” in 1997 could have funded five “Paranormal Activity” movies. The budget of “Scream 3” in 2000 could have funded 11. “Saw” in 2004 represented a course correction. Produced for $1.2 million, many more dollars were spent on marketing it than making it, and to good effect.

It grossed over $100 million worldwide. Six movies followed in the next six years, all made inexpensively, and only one grossing less than $100 million. Blum’s “Paranormal Activity” franchise picked up the mantle from “Saw” in 2009, with Blum taking the penny-pinching even further by capping the budget of all future franchise additions at $5 million, as he told Businessweek.

For Blum, working off this formula, the cheap, profit-heavy hits have piled up: 2011’s “Insidious” cost $1.5 million and grossed $97 million, 2012’s “Sinister” cost $3 million and grossed $77.7 million, 2013’s “The Purge” cost $3 million and grossed $89.3 million. All of these movies have either spawned successful sequels, or a sequel is coming.

The Hollywood Reporter wrote earlier this year that the cost of marketing and distributing Blum’s movies falls somewhere between $20 million and $30 million. In his arrangement with Universal, he is said to have free rein to greenlight any horror movie with a budget of less than $4 million, the studio investment so minimal that films are happily shelved if test audiences don’t respond.

According to Businessweek’s profile, Blum’s films are shot in less than 25 days, with small casts, few shooting locations, cheap visual effects and actors paid almost nothing upfront in exchange for a percentage of the profits.

The movies tend to open big, make a profit quickly and fade fast from both theaters and memories. The last “Paranormal Activity” entry made two-thirds of its American box office in its first week. Opening for Halloween, there’s a good bet we might get acquainted with “Ouija” 2, 3 and 4 in future years, even if critics, as is commonly the case with horror, don’t respond favorably.

But who cares? With economics this good, the movies don’t have to be liked.