Blumhouse: Minimizing Costs in the Film Industry

The thriller-horror film, “Get Out” was released in theaters on February 24th and has made more than $150 million gross domestic, according to Box Office Mojo. The movie has received a positive response from movie critics with an 8.2/10 on IMDb and 99% on Rotten Tomatoes. But the real magic behind this film is the low budget at only $4.5 million. NPR’s Planet Money recently dove into the “science” behind producing this film and others created by the production company Blumhouse.

Jason Blum is the founder this low-budget film production company. He created this company with the idea that he could apply a formula to movie production where he could minimize the costs and maximize revenue. Blum got this vision from the movie, “Paranormal Activity.” He viewed the movie once and decided to buy it. This purchase was a lucrative deal for him as the film only costed him $15,000 initially and it ended up gathering $200,000 million in revenue. Ever since then, Blum has been using this same formula for movies being produced by Blumhouse.

According to Stacey Vanek Smith and Steve Henn of Planet Money, there are only three steps to Blum’s cinema production formula. Each step utilizes the different rules of the market and minimizes the production costs. The first one takes into account the considerable increase in pay that extras (actors) receive for having talking lines in the film. The second follows the first rule and minimizes the locations where shooting for the film takes place. The last rule in Blum’s production method turns the star actors more into investors rather than these highly paid employees. Blum conveys to everyone of his star actors that they are “more like an investor or partner. And if the movie profits,” they profit.

This method has been working wonders for Blumhouse. In the last few years they have produced big name movies from “The Purge” to the “Insidious” series. Blum has been showing the film industry how to economically produce films and still maximize profits. For all those reading this and are currently looking for a way to make profit in the film industry… your answer could be here.

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