Spinning Horror Into Gold

At first glance, there is nothing particularly special about Jason Blum. He makes low-cost horror films that sell a lot of tickets. Producers have been getting rich from that formula for decades: rinse (the fake blood) and repeat.Adelaide Kaine in “The Purge,” a Blumhouse Productions film that cost $3 million to make and took in $87 million.

But start adding the numbers, and Mr. Blum, 44, becomes interesting in a hurry. Over the last five years, for production costs totaling a mere $27 million, his company, Blumhouse Productions, has churned out eight hit horror films — including “Paranormal Activity,” “Sinister” and “The Purge” — that have taken in $1.1 billion at the worldwide box office. “Insidious: Chapter 2,” for instance, cost $5 million to make and last month sold $116.5 million in tickets.

To achieve low budgets while attracting high-caliber actors and directors, Mr. Blum uses an unusual business model. Established directors and stars work for union scale. In success, profits are shared. “So basically people work for free,” he said. “And we don’t do frills. Everyone’s trailer on the set is the same: nonexistent.”

Not all his movies have been successful. Disappointments have included Catherine Hardwicke’s “Plush,” which made a total of $3,080 and cost about $2 million. But because of the growth in global video-on-demand and streaming services, even the movies that do not succeed at the box office have a good chance of earning back their low costs. Some of the duds even end up turning a profit for distributors.

Blumhouse movies, some of which rely on bouncy camera work and surveillance-style video, seem tailor-made for an audience raised on flip-phone cameras, reality TV and YouTube. And horror movies, which tend to do especially well among Hispanics and blacks, have been a bright spot lately for an otherwise troubled North American box office.

“It is always amazing when a producer can capture a niche so completely,” said Peter Schlessel, the departing chief executive of FilmDistrict, which has distributed Mr. Blum’s “Insidious” series.

Mr. Blum’s success has led to no small amount of envy among rival producers, while prompting some studio executives to wince at the degree to which he is exposing their inefficiencies. The big studios have been in hot pursuit of the opposite strategy recently — spending more to make more — leading to a cycle of bloat and steep losses on films like “R.I.P.D.”

Mr. Blum, a son of the art dealer Irving Blum, is hyper, witty, serially punctual and charming. He can be a bit of a gossip. One of his best friends is Ethan Hawke, who has starred in two of his films. People often describe Mr. Blum as “quirky,” which is not entirely accurate, although he did spend $25,000 to turn an old Chevy Astro van into a mobile office. An assistant chauffeurs him between studio meetings while he answers e-mail, talks on his cellphone and screens film on a 36-inch flat-screen TV.

“I’m visiting studios; I’m visiting agencies — television. I’m out pitching a lot of TV at the moment, a ton, actually,” he said in his mile-a-minute way on a recent trip down Venice Boulevard, his feet propped up on a cushion.

Mr. Blum is trying to expand his low-cost, share-in-the-rewards business model to the small screen. He has two series on the air and seven scripted and unscripted shows in the works at various networks.

People close to him say his motivation seems to go beyond money. Mr. Blum’s father helped change the art world by giving Andy Warhol one of his first shows; he wants to prove that he can change Hollywood, or at least a corner of it.

Still, the sustainability of the Blumhouse empire remains a question. Mr. Blum came along just as horror fans were tiring of “Saw”-style torture films. Eventually, audiences may also tire of his brand. Moreover, every successful producer has at one time or another seen a hot hand turn cold — look no further than Jerry Bruckheimer, fresh off the disastrous “Lone Ranger.”

“Historically speaking, the audience eventually moves on,” said Harold L. Vogel, an analyst and author of the textbook “Entertainment Industry Economics.” “I don’t think there is any exception.”

And nobody becomes successful in Hollywood without rubbing some people the wrong way. Mr. Blum’s relationship with Paramount Pictures, which controls the horror franchise that propelled him, “Paranormal Activity,” has been frosty at times, with executives chafing over what they see as attention-grabbing. (“Paramount has been a great partner,” Mr. Blum responded.)

“It’s the price of success,” said Mr. Schlessel, who is taking over the top job at Focus Features, the specialty division of Universal Pictures. “This is a competitive business and, to some degree, a zero-sum game.” Mr. Schlessel’s advice for surviving it: “He has to stay humble and he has to stay hungry.”

Mr. Blum, who is sometimes compared to Roger Corman, the low-budget B-movie kingpin, understands the challenges. But he does not have time to ruminate on them. Blumhouse is on fire.