If you’re going to invest in films, you must understand that one genre stands far above the rest: Horror 🔪

Today we’ve got a comprehensive analysis of the state of the horror industry, with a special guest issue by ​Andrew Adamides​.

You’ll learn what’s really happening in the lucrative horror industry through facts, anecdotes, and box office numbers.

This issue will be scary good (though not as scary as the amount of money Universal & Comcast will lose on the new Exorcist trilogy!)

Let’s go 👇

How to invest in horror films 🎬

Film investing is hot, and Horror is the most profitable film genre by far.

There’s a new way you can invest in horror films, and it’s through one of our newest partners, Greenlit.

​Greenlit​ is a platform that connects investors to filmmakers. It allows investors to easily analyze, track and manage their investments.

Alts is partnering with Greenlit to bring you exclusive access to a bundle of horror films currently in development, from producer ​Jenna Payne​.

Current offering: Horror film slate (bundle)

Genre: Horror/Comedy/Psychological

Production: ​Disaster Capital Productions​

Funding: $1m total

Current status: Development

Film summaries:

• ​Children of the Sun​
• ​Pioneers​
• ​Hysteria​
• ​Malacostraca​
• ​Black Shabbas​

Why invest?

• We love slates as they de-risk your investment
• All preliminary budgets are $5m.
• Producer is in talks with international production partners to bring production costs under $1m while retaining the equivalent production value of a $5m film.
• Production is international and can get 25% tax rebates, which can be leveraged to secure debt and gap financing.

Want to invest?

Express interest here →

Horror’s fake near-death scare

Six months into 2024, there were rumblings among film critics and analysts that maybe (whisper it), horror was over.

Like all genres, horror was suffering from a lack of product due to the ​2023 strikes​ that had crippled Hollywood.

And the films that come out were just…lackluster compared to previous years.

Night Swim and Imaginary weren’t making the same cultural splashes as breakout hits like M3gan or Smile — or grossing quite as much. And some high-profile releases like Abigail and The First Omen actually (shock) lost money!

But as it turned out, horror was just following the same playbook as its most famous creations. Just like Freddy, Jason, Ghostface and countless others, just when everyone thought horror was finished, it came back with a vengeance.

Today, a few new twists point to a very bright future for the genre.

Horror is still scary lucrative

Firstly, when you can complain that Night Swim, which grossed $55m worldwide on a $15m budget and Imaginary, which cost $13m and returned $44m didn’t make that much profit, those are still some decent numbers to complain about.

And then there was the second half of the year.

Summer brought a double-whammy of hit horror studio pictures with Alien: Romulus grossing just under $343m worldwide on an $80m budget, while A Quiet Place: Day One cost $67m to produce and brought in $261m.

Then Longlegs became by far the most successful indie film of 2024 — and the success story of the year — pulling in $109m globally.

This is even more phenomenal when you consider that it was made for under $10m.

And then there was Terrifier 3, the third outing for Damien Leone’s campy, mute and extremely murderous evil clown, Art, Terrifier 3 made history — and a lot of money.

Distributors Cineverse opted not to submit Terrifier 3 to the MPAA for a rating, knowing that they’d be slapped with an NC-17, preventing anyone under 18 from seeing the movie. Instead, they released it unrated.

Normally, this would be the kiss of box office death as theaters will not show an unrated film.

But Terrifier 3 was so highly anticipated — and cinemas are so desperate for revenue — that this long-standing rule went out the window.

Terrifier 3 is now the first unrated movie to open in the number one box office spot and will also be the highest-grossing, having taken almost $40m worldwide at the time of writing (just after its second weekend in release).

All of this should bang a stake through the heart of any concerns that 2024’s horror movies aren’t zeitgeisty or profitable enough.

This is easily the best genre of films to invest in.

Two special horror films you can invest in right now 🎬

I actually have two special horror films you can invest in right now: Incarceration and The Centre.

INCARCERATION

Longlegs meets The Blair Witch Project

​Incarceration​ is a horror thriller blending The Blair Witch Project and Longlegs.

A popular paranormal YouTube crew, Midnight, enters an abandoned prison for the criminally insane, alongside a witness to past massacres, only to discover a demonic killer still lurks within.

Used to faking hauntings, the team faces real terror as they’re hunted by supernatural evil.

The film marks Peter Field’s directorial debut, leveraging his experience from iconic horror films like Hellraiser. Writers/producers Andrew Adamides and Daniel De Haan, co-founders of Roadmap Pictures, bring experience from The Lord of the Rings, Damsel, No Time To Die, and the Spider-Man series, aiming to deliver a 21st-century horror experience.

Currently in development, INCARCERATION seeks funding via presales, equity, and tax credits, with a 2025/6 UK or Eastern Europe shoot.

Interested investors can connect with Andrew for early involvement.

​Learn more about Incarceration.​

THE CENTRE

Inspired by the surreal horror styles of Cronenberg and Lynch, ​The Centre is based on the award-winning short film Waving starring Ralph Ineson.

It combines intense psychological themes with horror aesthetics reminiscent of Jacob’s Ladder and The Babadook. Director Rolfin Nyhus and writer Steven Brumwell, creators of Waving, helm the project, bringing their experience in exploring mental health and surreal horror to the feature.

Jack faces a terrifying battle with an entity that feeds on suffering, raising haunting questions about inherited trauma and mental health.

Inspired by the surreal horror styles of Cronenberg and Lynch, The Centre combines intense psychological themes with horror aesthetics reminiscent of Jacob’s Ladder and The Babadook.

Director ​Rolfin Nyhus​ and writer Steven Brumwell, creators of the award-winning short film Waving, helm the project, bringing their experience in exploring mental health and surreal horror to this feature.

The Centre is set to film in the UK in 2025, with financing through equity and tax credits, aiming for a festival debut and distributor interest.

​Learn more about The Centre.​

Want in on either of these horror films? Just smash the reply button.

Let’s look at the numbers..

Over the last decade, horror movies have enjoyed a meteoric rise in popularity.

​The Numbers​, everyone’s favorite industry-standard site for box office data, shows that between 2014 and 2024, horror’s share of the US theatrical release market has more than tripled, growing from 2.69% to 9.95%. (During the pandemic it even rose to 20%).

That makes it the fastest-rising film genre, period.

In fact, it’s also one of just three genres to see their market share grow – and it has far outstripped the other two. Action saw an increase of 3.9% while Thrillers increased by 1.6%. Everything else dropped share.

And it’s important to note that this is against a backdrop where ticket sales plunged from 1.3 billion in 2014 to a projected 762,000 in 2024.

Horror’s market share is up over the decade, fluctuating between 8-12% in recent years.

As with all good horror movies, though, the most interesting things are going on under the surface.

Let’s look at what 2024’s highest-grossing and/or most notable horrors tell us about the sort of horror people do and don’t want right now – and what that tells us about the future.

Newer franchises are winning

The first trend you need to understand is that, unlike in the rest of the industry, newer franchises are winning. Older ones aren’t.

The third film in the Quiet Place franchise that started in 2018, A Quiet Place: Day One is 2024’s highest-grossing horror movie in the US market. While it’s the lowest-grossing entry in the series so far, it’s unlikely Paramount will be too worried, given its worldwide haul stands at $261m.

Alien: Romulus, meanwhile, brought back everyone’s favorite acid-drooling, face-hugging cephalopod for the 7th time. That grossed $350m on an $80m budget.

Terrifier 3, the third outing for cult psychopath Art the Clown, and the first to have a seven-figure budget at ($2m), is also tracking well. Unsurprising since Terrifier 2 (2022) grossed $16m on a $250k budget! Art first appeared in 2016’s Terrifier.

Meanwhile, sequels Beetlejuice Beetlejuice, Godzilla x Kong: The New Empire, Kingdom of the Planet of the Apes and Ghostbusters: Frozen Empire, all of which feature horror elements, also did huge business. More on those later.

Very much not doing huge business, however, was The First Omen, a prequel to 1976’s classic The Omen, one of the most successful horror movies of all time.

The First Omen grossed just $54m on a $30m budget — which in the end resulted in a sizable loss.

This continues a pattern that started in 2023, when The Exorcist: Believer also underperformed. Yes, it brought $137m on a $30m budget. However, that’s far less than Universal had hoped for, given the branding and the fact that they paid horror maestros Blumhouse $400m to make the film + two sequels.

A Quiet Place: Day One demonstrates that the laws of diminishing returns can still apply.

But the pattern here is that more recently-launched franchises — and those with characters that have huge cult followings — are still doing great by appealing to younger audiences.

Original ideas and great marketing are winning

While other high-return genres like Action and Adventure are still dominated by remakes, reboots and sequels, one of horror’s trump cards is that it still offers original, imaginative stories.

This year’s hits prove that audiences crave both of these in their horrors — and also in how they’re marketed.

Along with innovative storytelling, stylish photography and freaky central character, Longlegs benefited enormously from a massively successful viral, entertaining marketing campaign.

Its attention-grabbing stunts included taking out a ​half-page ad​ in the Seattle Times filled with Zodiac Killer-like code and signed “Printed at the request of Longlegs”.

The Substance, meanwhile, brought back 70s-style body-horror with a very unique take on aging, vanity and beauty standards.

This saw Demi Moore’s actress/fitness influencer character turning to drugs, namely the titular “Substance”, which allowed her to “birth” a younger version of herself. The two then shared her consciousness on a one-week on/one-week off basis.

Even Night Swim, which critics complained was lackluster but still managed to scare up $54m on a $15m budget, featured a strikingly original antagonist in the form of a demonic swimming pool.

PG-13 horror is cleaning up

In 2022, M3gan underwent reshoots when the initial cut was deemed too scary for a PG-13 rating. The MPAA landed it with an R. Whatever the cost of the reshoots, they were more than covered by its $181m box office haul (on a $12m budget).

It may seem counterintuitive to make less scary horror, but there’s an undeniable logic to aiming for a lower age rating. After all, the lower the rating, the more people who’ll be able to buy a ticket for your movie. And as we’ll see, horror fans getting younger is a significant theme of the landscape right now.

This year A Quiet Place: Day One, Night Swim, Tarot and Imaginary all benefitted from their PG-13 ratings. And while Longlegs scored an R-rating in the US, it was rated 15 in the UK and elsewhere. The UK, where it raked in over $10m, was Longlegs’s best overseas territory.

This is especially cool because many horror fans got into the genre via their “gateway horror” — i.e., the first horror film they saw when they were young.

Having more PG-13 horrors in the marketplace means that tradition can continue for a long time yet! (Filmmaker Jenna Payne’s was The Haunting (1963) when she was 7. Mine was The Amityville Horror (1979) when I was 6…)

Horror-adjacent films are cleaning up

Remember, when we mentioned Beetlejuice Beetlejuice, Kingdom of the Planet of the Apes and Ghostbusters: Frozen Empire and how we’d get back to them later?

All of these are horror-adjacent, a new phrase you may hearing a lot more of.

Horror-adjacent describes a movie, TV series or other piece of media that uses horror tropes and techniques, but isn’t considered to be a horror movie.

The term’s popularity kicked up 2023 due to the soaring influence of horror on other genres, both on the big screen and elsewhere.

It’s not just studio movies that can be horror-adjacent. Some critics have argued that Longlegs could also be considered horror-adjacent, rather than pure horror, given that it relies on thriller conventions as much it does on horror ones.

This year’s A24 hit Civil War is another great example of a recent indie that’s officially categorized as an Action movie – but with its depictions of violent societal collapse and dystopia, uses horror tropes also.

Whatever the case, horror-adjacent films are doing very well indeed. Last year one of them, Poor Things was nominated for Best Picture and won Best Actress at the Academy Awards.

This success is understandable, given that people who would avoid a full-on horror movie like Terrifier 3 – essentially another two hours of Art the Clown killing people in graphically gory and inventive ways – may well be more interested in seeing something that’s got scary elements but is less of a full-on experience. It’s also a very important phenomenon in assessing how well horror is doing as a genre.

In a sense, horror’s market share is not only expanding upwards, it could be said to be expanding sideways — its influence is responsible for a share of other genres’ profits.

Elevated horror is out, “fun horror” is in

The late 20-teens saw a rise in the popularity of Elevated Horror, peaking in 2018 with the release of A24’s Hereditary, which took over $80m on a $10m budget.

Elevated Horror is horror which features:

• High concepts
• Atmosphere building
• Psychological character development
• Strong emphasis on theme (rather than jumpscares)
• Scary monsters.

Hereditary, for example, focused as much – or more – of its runtime on the effects of grief on a family as it did on their late matriarch’s demon-worshiping coven. A focus on psychological trauma was a big part of the boom, especially towards the end of it. Other notable (and profitable) examples of Elevated Horror include Get Out (2017) and Midsommar (2019), the latter from Hereditary director Ari Aster.

As the subgenre’s popularity grew, however, so did its perception as being rather dour and depressing.

Even The Substance – claimed by some to be an Elevated Horror – features campiness, body-horror and a lightning-fast pace, unlike its forebears.

Fun Horror, on the other hand, was everywhere in 2024, at the top of the box office in particular. Fun Horror encompasses everything from:

• Larger-than-life villains
• Irony
• High concepts
• Jumpscares
• Demons and monsters.
• Satirical (like M3gan)

Demonic serial killer Longlegs has been described by his creator Oz Perkins as a former glam rocker with too much bad plastic surgery. He’s a perfect example of a Fun Horror bad guy.

Ditto Art the Clown, star of the Terrifier series, who spends almost as much time winking at the camera as he does chopping up his victims.

We also had killer imaginary friends in Imaginary, that demonic swimming pool in Night Swim we mentioned earlier and an exorcism that goes wildly out of control on a 1970s TV talk show in Late Night With The Devil, a highly original take on Found Footage horror.

And continuing the pattern we’re seeing with regard to audience age, while Elevated Horror was hailed as horror for grown-ups, Fun Horror obviously skews younger.

“Kids Horror” is really hot

Over this section on 2024 trends, you’ll have picked up by now that horror is skewing younger. In fact, it’s skewing younger than ever before — and that’s working out very nicely for producers.

It’s why we’ve the rise of the latest — and hottest — subgenre; Childhood Fears.

These are films which prominently feature creepy antagonists based on the sorts of characters typically encountered by children and young people — and which are frequently based on IP that’s popular with them.

After giving us a classic example with killer doll M3gan in 2022, last year Blumhouse followed her up with its highest-grossing film ever, Five Nights At Freddy’s.

Fun and PG-13 rated, of course. This year’s entry in the cycle is Imaginary, featuring a murderous teddy bear and a vengeful imaginary friend. In spite of very poor reviews, it grossed just under $44m worldwide on a $13m budget.

A FNAF sequel is due in 2025, alongside the first film adaptation of a similar – and equally popular – game, Poppy Playtime. Poppy Playtime centers on Huggy Wuggy, a needle-toothed monster based on a cuddly toy that was accidentally created by scientists working for the fictional Playtime Toy Company.

Like FNAF, Poppy Playtime comes with a built-in fanbase that is both very young and very online, offering huge merchandising potential and making viral marketing easy.

Incredibly easy, in fact, given that its fans already create enormous amounts of UGC around the characters and that this undoubtedly reaches audiences who are too young to play the games or see the movies— but will want to do both as soon as they’re able.

We’re obviously focusing on theatrical-release horror movies here, but while talking about these trends, it’s important to note that some of them are very much in evidence outside of theatrical too.

Firstly, horror and horror-adjacent shows are still doing incredibly well on TV and streaming. Second, original horror streamed on YouTube, TikTok and similar social sites is reaching (and enormously appealing to) audiences that are increasingly younger. (Far younger than those who’d be able to get into a theatrical horror movie.)

A prime example that reflects both these trends is Netflix’s hugely successful Wednesday which debuted in 2022. This now holds the record for the most hours viewed in a week for an English-language Netflix series.

Wednesday is Fun Horror, horror-adjacent, given that it offers teen soap drama in addition to scares, and is aimed at a Gen Z audience.

Over on YouTube and Roblox, meanwhile, an even younger audience has been avidly consuming a whole new type of horror.

Skibidi Toilet is a computer-animated web series featuring an apocalyptic war between giant, evil, human-headed singing toilets and humanoid characters with an assortment of electronic devices for heads.

While YouTube revenue is notoriously hard to calculate without access to a channel’s backend, sites like ​SocialBlade​ estimate that its revenue is hundreds of thousands of dollars per month.

Horror budgets vs profits

It’s often said that horror is the perfect genre for theatrical releases:

• It can be produced cheaply
• It doesn’t rely on expensive big-name stars
• It has a loyal fanbase
• And the nature of its stories make the movies more enjoyable to watch in a communal setting.

This is what makes horror do so well financially.

The icing on the cake is that, aside from outlier smash-hits like M3gan, horror movies perform very well for their budget.

This begs the question; if you want to maximize profits, how much should you spend on making a horror movie?

As I discussed in ​Part 1​, horror is diversifying into subgenres, so that question may be too simplistic now.

A better question might be: How much should you spend, considering the type of horror film?

What if you were making Terrifier 3? As we’ve previously noted, this is as pure slasher-horror as you can get. It’s a couple of hours of violent killings and graphic gore. There’s no adjacency here.

Given these audience limits, surpassing Terrifier 2 ($16m box office haul, $2m budget) would make it very profitable. But if it cost $20 million to make? That’s another story.

Now, let’s say you’ve found a well-written script that’s high-concept and creative. Scary, but not too scary. It’ll score a PG-13 rating, appeals to the kids and is “Fun Horror.”

How much should you spend to make that? $10 million?

Out of the top ten highest-grossing horror films of 2024 the comparable ones would be Night Swim, Tarot and Imaginary. Their average gross comes out at about $49 million.

On top of your production budget, you’ll need to factor in marketing and rolling costs, i.e. costs incurred once the film is completed and which are accounted for outside of the production budget.

A good rule of thumb is to assume post-production costs will equal the production budget. So in this case, expect to spend a total of $20m.

At a gross of $49 million, you’d be looking at a decent profit. If you hit Longlegs numbers (i.e. over $100 million gross), you’d be looking at a very decent profit.

Abigail was another story.

This film was somewhat horror-adjacent, given that it was marketed as a horror-comedy, and definitely Fun (it features a vampire ballerina…), all of which was in its favor.

But, it was R-rated, so it couldn’t access the wider audience that a PG-13 rating would have given it.

This was an especially bad thing, given the young age of its protagonist would appeal to kids and its star Melissa Barrera has a similarly youthful fanbase.

To be clear, lower-budget horror does still break through. But this happens increasingly rarely in theatrical releases, and often only with some form of significant viral presence.

• In 2023, Skinamarink grossed $2m on a budget of just $15,000 (!) after the director built a following for it online.
• In 2022, Terrifier 2 grossed almost $16m on a $250k budget raised via a ​crowdfunding campaign​. Creator ​Damien Leone​ spent a decade building a cult following for the brand through shorts. It took a decade to build up the franchise.

This year, two lower budget features did well:

• I Saw The TV Glow grossed a little over $5m for A24 (cost under $1m, 5x return)
• Late Night With The Devil grossed over $15m (cost around $1.5m, for a 10x return)

Lesson: Know what you’re making, know who’s going to watch it, maximize its appeal to them and budget accordingly.

Who watches horror?

Young people.

A 2017 survey by ​Movio​ found that paranormal horror audiences were 27% younger than the overall movie-going audience.

Zooming in, we see that between 2000 and 2021, 35% of cinema horror audiences were aged between 19-24, a higher proportion than any other genre.

According to a Statista survey in late 2022:

• 54% of responders aged 18-29 and 64% of those aged 30-44 either “loved” or “liked” horror.
• That’s in contrast to 49% of those aged 45-64 and just 26% of those in the 65+ age group.
• About 33% of Gen Z responders had seen a horror movie in the theater within the past month, vs 7% of Gen-Xers and 2% of Baby Boomers.
• Just 21% of the Gen Z responders had not seen a horror film on the big screen in the last 3 years compared to 44% of Millennials, 66% of the Gen-Xers and 88% of the Boomers.

Lesson: Now we know why bringing back The Omen and The Exorcist was such a bad idea. Reboots aren’t a sure thing in the horror industry!

And the industry’s strategy of starting them young is paying off — not least because this age group is most likely to be active on social media. If they like your movie, you get more free advertising.

All of which is especially important given the all-important question…

Is horror saturated?

The growth days were 2014-2017.

Those years saw steep growth, from 2.7% to 9.7% market share. Since then, horror’s theatrical market share has leveled off.

The kicker is, however, that this percentage represents the theatrical market share for movies defined primarily as horror. And as we’ve learned, horror is increasingly making its presence felt in other genres and other media.

To me, this indicates that the appetite is certainly not diminishing. And horror tropes may well be responsible for a good chunk of the box office share of those other genres.

Also, the numbers clearly show that no other genre has had anything like the increase in box office share that horror enjoyed over the last decade.

In fact, Adventure, Drama, Comedy and Romantic Comedy are all down over the same period. Nothing is threatening to cannibalize horror’s current market share.

Within horror’s own domain, the emergence of newly popular subgenres (Fun Horror) while others fade (Elevated Horror), indicates that the genre’s ability to reinvent itself is still strong.

Lesson: horror may have maxed out its traditional box office share for now. But it’s not dropping off.

And with its increasing ability to move into other genres and media, it remains a great bet when looking to the future.

Horror is the single most profitable genre

It’s official. Horror is more likely to make a profit.

Research by ​StephenFollows.com​ indicates that between 2000 and 2023, 48.9% of horror movies were likely to have made a profit (and a further 3.1% possibly made a profit). This is higher than any other genre.

Horror was also the third-least-likely to have made a loss with 40% of horror films falling into this category. (The least likely genre to have made a loss was Family (38.1%), followed by Adventure (39.3%).

The team at Alts has been ​saying it for years​: If you want to invest in film, horror is your best bet.

How well does horror translate internationally?

Looking at the international grosses of 2024’s top ten horror movies (as defined by their total worldwide box office take) gives us a surprising reversal of one particular trend; the original, imaginative movies all made less internationally than they did in the US.

Longlegs, Night Swim, The Strangers: Chapter 1, Imaginary and Abigail all took the bulk of their box office takes in the US.

Speak No Evil earned more on the international market but is a remake of a European movie and was filmed in England, so likely had more appeal.

The odd outlier is Tarot, a teen horror criticized for being generic and which made over $10 million more outside the US than it did in its home market — perhaps proving that international audiences prefer more familiar narratives.

Of the two big studio hits, Alien: Romulus made over $100m more internationally than in the US.

A Quiet Place: Day One, on the other hand, made about $15m more in the US than it did overseas, demonstrating the difference at studio picture level between having an iconic monster and not having an iconic monster.

Lastly, The Omen showed that older brands may still have a little more international resonance as its international take exceeded its US box office by $10m. (Still nowhere near enough to save it, however.)

Lesson: If it’s an original piece, not a studio picture, make sure your horror film resonates with US audiences.

Where is horror going next?

At the time of writing it looks like 2025 and 2026 are set to feature a higher-than-usual number of sequels, reboots and remakes.

All of these are now scheduled for release:

• Megan 2.0
• Terrifier 4
• Thanksgiving 2
• Five Nights at Freddys 2
• Scary Stories to Tell in the Dark 2
• The Black Phone 2
• Another Exorcist
• And another Final Destination

Again, juicing reboots is fairly rare for the horror industry — especially compared to Action/Adventure.

But based on what we’ve established as the current trends, most of these actually do seem like good bets.

They’re not based on aging or played-out IP, and they tick many of the other boxes we know are popular, most being youth-oriented in particular. Fun too.

One upcoming release that stands out from this is Blumhouse’s Wolf Man, which reboots the 1941 werewolf film of the same title.

Bringing back IP that’s this old is an interesting move; if classic monsters can appeal to a new generation, that gives a lot of IP to mine although it’s tough to see where the relatability lies.

Elsewhere, Soulm8e will become the first movie in a planned M3gan universe that won’t feature M3gan herself. Focused on a doll you date rather than one who looks after your kids, it’s pitched at an older audience and will be a similarly interesting experiment in seeing if the M3gan brand can stretch.

The ​Skibidi Toilets I mentioned in Part 1​ might not be on the big screen just yet (pencil them in for 2026 maybe), but we’ll be seeing other films based on similar viral web content.

Further abandoning the trademark Elevated Horror films that put them on the genre map, indie producers A24 will release The Backrooms. This adaptation of a YouTube series is based on an internet urban legend popularized in a creepypasta (short, scary stories shared via web forums).

Lesson: Horror is still focused on the future, testing out new possibilities while continuing to exploit the things it knows are working.

Investing in horror movies

Horror isn’t going anywhere, it’s share of box office is stable and its appeal will only expand as younger cohorts who’ve grown up with it craves more.

So, how can you make money out of it?

Here are a couple of options:

Equity investing

Firstly, there’s the traditional option of taking an equity position on a feature. On the right project, taking a position on an indie film can be very viable. It’s important, however, to assess the project carefully (or have someone do it for you).

You’ll need to make sure it lines up creatively with what the market’s buying, has a good team with a track record behind it and that the budget is realistic. There is no shortage of horror projects around, so you’ll also want to make sure there’s a solid plan in place for how it gets financed, produced and marketed – as well as some profit projections.

Also, whatever that plan is, it needs to be appropriate for the type of horror movie the project is – you wouldn’t, for example, be able to take Night Swim to Cannes, screen it and sell it there like The Substance, because it’s not a festival-type film.

Invest in IP or POC (film rights)

Alternately, you could look for an earlier-stage project and invest in IP and/or Proof of Concept.

Traditionally film IP investing means buying rights to a novel or similar piece of source material, then selling it to a production company or studio (hopefully with several bidding against each other). But that’s less the case here.

Many horror features are now sold based on proof of concept – a successful short film, web series or other similar material. Producers often need to raise money to make these, so taking a portion of ownership of the underlying IP in return for financing one or more of these promotional tools can potentially provide high returns on small outlay.

In this case, the IP you would be taking part ownership of would be the brand the creator has come up with. So, if it went forward and was developed into a feature – better yet a franchise – you would get a cut of the profits.

Also, given the relatively low cost of shorts and similar material, this could allow for multiple smaller investments across a raft of projects, spreading your risk and maximizing chances of a potential return.

Many of the same criteria still apply here when assessing features of course, in particular market fit, team track record and financials that make sense.

Smile would be a great example of how this could have netted a very nice return for an investor. Director ​Parker Finn​ produced a short called Laura Hasn’t Slept which was used to sell the idea as a feature.

Smile grossed $217m on a $17m budget, and Smile 2 is doing very nicely with that $23 million opening we mentioned in Part 1.

Laura may not have slept – and her budget details haven’t been released either – but given that the short likely cost around $50-$75k, if you’d kicked in some of that in return for a stake in future profits, you’d be able to sleep pretty soundly.

Closing thoughts

Horror is a rare industry that actually avoids reboots, rewards creativity, and is generally profitable.

Older brands’ value may be dropping off, but horror is hard at work successfully expanding its audience outside traditional genre fans and age demographics, as well as cultivating a next generation – on screens of all sizes.

All of which is enormously important for its future growth and profitability.

So as we head towards 2025, one thing’s clear – horror remains the genre to invest in if you want to get into feature films.

The audience is young and has new members joining it all the time.

Budgets are low, returns are still great – far better than any other genre at the indie budget level.

And with the genre expanding into new media, there are more ways than ever to get into projects that could end up on the big screen – and at relatively low risk given the sums involved.

You’d have to be crazier than Art the Clown not to consider it 🎬

Disclosures

• This issue was written and researched by ​Andrew Adamides​, with help from ​Jenna Payne​ from ​Disaster Capital Productions​.
• Editing was done by Stefan von Imhof, using data from ​The Horror Report​ by Stephen Follows
• This issue was sponsored by ​Greenlit​.
• Neither Alts nor ​Altea​ has any current holdings in any companies mentioned in this issue.