Blumhouse is known for its production of horror films. Anyone who has seen the “Paranormal Activity” or “The Purge” series or “Get Out” watched a Blumhouse film.

Yet the Oct. 18, 2023, Walker Webcast opened with a discussion of “Moneyball,” which is not a Blumhouse movie. Why? “The Moneyball model is very applicable to the way we operate our business,” Jason Blum, Founder and CEO of Blumhouse, told Walker & Dunlop Chairman and CEO Willy Walker.

In “Moneyball,” Oakland A’s manager Billy Beane didn’t focus on splashy athletes to build the baseball team. Instead, he focused on statistics. Blumhouse doesn’t focus on splashy, high-budget movies. Instead, it focuses on one genre – low-budget horror.

The Blumhouse model means that scripts should have small casts, not many speaking parts, and limited shooting locations. It also means that directors, actors, and other talent aren’t paid up-front but on the back end. “If the thing you make works, everyone gets paid, and if it works, everyone gets rich,” Blum said during the webcast. “If it doesn’t work, you don’t make very much money. That’s unusual in mainstream Hollywood, but it’s also a concept Billy Beane would have loved.”

It’s also been highly successful for Jason Blum.

How it Began

Blum acknowledged that his original goal in starting on his own company wasn’t to become successful in the low-budget horror genre. He was on a mission to make a hit movie when he leaped from an executive position at Miramax to head his production firm. And the best way to make a hit movie was by making a studio movie. As much as he liked producing independent films, the distribution path was narrower than that of studio movies.

Following the production of a few independent films (“none of them really worked in any serious ways,” Blum said), he got his chance to produce the large-budget “Tooth Fairy” for 20th Century Fox. At the same time, Blumhouse produced the first “Paranormal Activity,” an independent film. That’s when Blum had his epiphany.

“I realized there was a way to make independent movies, which I love doing, and to have studios release those movies, which is what Paramount did with “Paranormal Activity,” he said.

Because those independent movies are low budget, he went on to say, more can be made. “The minute “Paranormal Activity” happened, I was into volume,” Blum said. “The way to get volume is to bring your costs way down.”

The independent film process means directors have more flexibility and can take chances. It also allows Blumhouse to work with underrepresented and highly-talented directors like Jordan Peele (“Get Out”) and John Chu (“Jem and the Holograms”) before they became well-known.

Overall, when it comes to producing independent films, “there are less people involved with the decision, so it’s just more fun,” Blum explained.

The Non-Transferrable Model

Is the model transferable to other studios or genres? Walker asked. Absolutely not, according to Blum.

“We make horror movies. Larger studios can’t operate doing just that, so that alone is a big reason a studio can’t replicate our model,” Blum said. The model could work with television production, which is more focused on profit and loss. But the streaming model, in which everyone is paid upfront, would struggle with back-end payments.

In discussing genre, Blum said that the model would struggle with action films. “When an audience goes to see a Marvel movie, they expect the world to blow up in different ways every time,” he pointed out. “You can’t do a Marvel movie for cheap.”

And while it’s possible to make a romantic comedy on a low budget, “they’re much more movie-star dependent,” Blum said. “When you get to a certain category of actor or star, they’re not going to work for no money upfront.”

On-demand replays of the Oct. 18 Walker Webcast are available through the Walker Webcast channels on YouTube, Spotify and Apple.