This is the fourth article in my series looking at the financial side of the film business. In previous articles, I’ve looked at $100m+ Hollywood blockbusters, $30m-$100m movies and profitability across all movies released between 1990 and 2015.
This week I have teamed up with Bruce Nash from The Numbers for a research project originally commissioned by the American Film Market. They asked us to look into what types of low-budget films “break out” (i.e. make far more profit than is typical for films of their scale) and if there were any lessons for independent low-budget film producers.
What types of low-budget films make the most money?
To discover the commonalities amongst low-budget breakout hits, we began with a list of over 3,000 films from The Numbers’ financial database, investigating full financial details, including North American (i.e. “domestic”) and international box office, video sales and rentals, TV and ancillary revenue. We narrowed our focus to study feature films released between 2000 and 2015, budgeted between $500k and $3 million, which generated at least $10 million in Producer’s Net Profit, using a standard distribution model where the distributor charges a 30% fee.
This produced a list of 63 films in total: roughly four films a year over the 15 years under consideration. Almost all of the movies will be familiar to followers of independent film, from small films that became Oscar hopefuls, like Beasts of the Southern Wild and Winter’s Bone to horror movies like Insidious and The Purge that got picked up by the major studios and became box office sensations. With the list in hand, we looked for common themes and found (with a small number of exceptions) that the breakout hits broke down naturally into four types.
Model one: Extreme, clear-concept horror films
It will come as no surprise to most producers that horror films feature prominently on the list of top low-budget breakout successes.
- Most profitable films: Insidious, Monsters, The Devil Inside, Paranormal Activity 2, Dead Snow
- MPAA Rating: 82% are rated ‘R’, 12% PG-13 and 6% not rated.
- Running time: Relatively short, with an average of 94 minutes and no film ran over two hours.
- Critical reviews: Average to poor. Highest rated film in this category is “Buried”, which has a Metascore of just 65 out of 100. The average Metascore across the dataset was just 49 out of 100.
- Audience reviews: More supportive than the critics but still not above most films, at an average of 6.2 out of 10 on IMDb.
- Release patterns: Two very distinct release patterns: half played in fewer than 100 theatres while the other half played in over 1,500 theatres.
- Income streams: 28% from theatrical, 60% from home video and 11% from TV and other ancillary income.
- Income location: 46% of income was from the US & Canada and 54% international.
Model two: Documentaries with built-in audiences and/or powerful stories
The second group of films that stood out were documentaries.
- Most profitable films: Exit Through the Gift Shop, An Inconvenient Truth, Marley, Tyson, Bowling for Columbine
- MPAA Rating: A healthy spread across all ratings, with the most common being PG-13
- Running time: Average of 102, although a wide range from 80 minutes up to 144 minutes
- Critical reviews: Very high, with a Metascore average of 79 out of 100.
- Audience reviews: Very high, an average IMDb rating of 7.8 out of 10.
- Release pattern: Small number of theatres, with most playing in under 250 theatres and the widest release being An Inconvenient Truth in 587 theatres.
- Income streams: 70% of income comes from home video, 17% theatrical and 12% via other sources.
- Income location: 58% international and 42% domestic.
Critical reviews seem vital for this type of film to break out and it’s interesting to note that the documentaries with the lowest scoring critical ratings (The September Issue at 69 and Religulous at 56) each had strong inbuilt audiences (‘Vogue / fashion’ and ‘Bill Maher / religious scepticism’).
In fact, only a handful of the documentaries on the list don’t have an obvious audience: Man on Wire, Anvil: The Story of Anvil, and Searching for Sugar Man are the only ones that needed to find a crowd. The others were either about someone already very famous (Marley, Tyson, Senna, Amy… note the one-name titles!) or played very directly to a receptive audience (Inside Job, Blackfish, An Inconvenient Truth etc).
Model three: Validating, feel-good religious films
Speaking of receptive audiences, the third group of films we found were faith-based films.
- Most profitable films: Fireproof, God’s Not Dead, To Save a Life, War Room, Courageous
- MPAA Rating: Two-thirds were rated PG and the remaining third were PG-13
- Running time: Fairly long, all were over 110 minutes and the average was two hours.
- Critical reviews: Incredibly poor, with an average Metascore of just 26 out of 100.
- Audience reviews: Similar to the horror pool, with an average IMDb rating of 6.3 out of 10.
- Type of release: An average of 1,273 theatres with the widest being War Room at 1,945 theatres.
- Income streams: 55% from home video, 29% from theatrical and 16% from television and other ancillary streams.
- Income location: 90% of income came from North American sources with just 10% coming from outside the US and Canada
Two things stand out with these films. First, they make virtually all of their money in the United States. Second, they get very bad reviews from mainstream movie reviewers. The strength of these movies isn’t necessarily their quality so much as the message; they deliver to an audience that is interested in what they have to say.
Model four: Very high quality dramas
At the other end of the spectrum, at least in the eyes of professional film reviewers, come very high quality dramas. Almost half of these films were American productions, with the rest coming from a wide variety of countries including Germany, Argentina, Mexico, the UK, France and Poland.
- Most profitable US dramas: Half Nelson, Waitress, Blue Valentine, Fruitvale Station
- Most profitable foreign dramas: The Lives of Others, The Motorcycle Diaries, Amores Perros, Sin Nombre
- MPAA Rating: The vast majority are R-rated, with just a third being rated PG-13
- Runtime: A wide range, from 81 minutes up to 154 minutes long.
- Critical reviews: Extremely high, with an average Metascore of 81 out of 100.
- Audience reviews: Similarly high, with an average IMDb rating of 7.5 out of 10.
- Type of release: Small release, with all but four playing to fewer than 300 theatres.
- Income streams: 63% from home video, 25% from theatrical and 12% from other sources.
- Income location: 66% of income for US dramas came from the US and Canada, whereas the reverse was true with non-US dramas, with 64% of income coming from international sources.
The lowest rated film in this category received a Metascore of 68 out of 100, which was higher than all of the films within the Horror breakout success category.
A common thread among these films is awards attention. While they might not be big enough to win a lot of main-category Oscars, these are the films that have picked up a bunch of Independent Spirit Awards, Best Foreign Language Film at the Academy Awards, and got some screenwriting and/or acting Oscar nominations.
Do the films have to be any good?
An interesting finding from this research is that the quality of the film is only relevant for certain types of films.
- Religious films received extremely low ratings from critics but had mixed ratings from audiences.
- Horror films showed a range: some were disliked by both audiences and critics (such as The Devil Inside), while others had middling support from both camps (such as Monsters) and then there were films which audiences enjoyed but critics were lukewarm towards (such as Dead Man’s Shoes).
- Documentaries and Dramas were all popular with audiences and the vast majority also received extremely high ratings from critics.
If we plot this on a graph, we can see just how distinct these three sub-categories are.
Many of the films in the list come as no surprise, but what’s interesting is what’s missing from the list. We found…
- Virtually no comedies (Waiting… is the only out-and-out comedy on the list, and it was made at the peak of the DVD sales boom)
- No action movies
- No thrillers
- No musicals
- Virtually nothing directed at kids — Dr. Dolittle 3 was the only family movie that made our list — although we believe some animated franchises, such as Barbie and Tinker Bell are very profitable but their budgets aren’t quite in our range.
Aside from the missing genres, the other notable absence is any major star involvement. Of course, this is largely a function of the budget—it’s hard to get Tom Cruise for a $3 million film—but it’s remarkable that none of these films attracted anybody who would even be called a B-list star at the time the film was made.
Lessons for filmmakers and producers from this research
So we think there are a few lessons for independent film-makers who are hoping to make breakout hits:
- Some “niche” audiences are large enough to make for a very profitable market, if you can reach them. The “faith-based” film audience stands out, but there are also receptive audiences for certain types of documentaries. Having a very clear idea of your audience is the first step to making a financially successful film.
- If you’re aiming for a more general audience, quality matters. A lot. Honing your screenplay to what you think is perfection and then having it ripped apart at a workshop may be hard work, but it’s almost certainly what it takes to get a dramatic film to ultimately work with audiences, and to make back its investment.
- Look for good actors, not big stars, and do the same with all of the technical crew on a film. Fun fact: Affonso Goncalves, who edited list member Beasts of the Southern Wild also edited fellow list member Winter’s Bone and 2016 Oscar nominee Carol. Finding a good editor, cinematographer, production designer and other key members of the crew is more important for a low-budget film than blowing a big chunk of your budget on a famous (or, just as likely, previously-famous) actor or actress.
The full list of films
This analysis looked at feature films released between 2000 and 2015 budgeted between $500k and $3 million and which we estimate generated at least $10 million in Producer’s Net Profit. The films which fit our criteria are listed below.
|Rank||Film Title||Year||Metascore||IMDb rating||Estimated Budget|
|1||Bowling for Columbine||2002||72||8.0||$3,000,000|
|2||The Lives of Others||2006||89||8.5||$2,000,000|
|4||God's Not Dead||2014||16||4.9||$1,150,000|
|5||An Inconvenient Truth||2006||75||7.5||$1,000,000|
|9||Paranormal Activity 2||2010||53||5.7||$3,000,000|
|10||Hustle & Flow||2005||68||7.4||$2,800,000|
|14||The Motorcycle Diaries||2004||75||7.8||$3,000,000|
|15||Exit Through the Gift Shop||2010||85||8.0||$500,000|
|16||Man on Wire||2008||89||7.9||$1,900,000|
|17||Dr. Dolittle 3||2006||3.9||$3,000,000|
|21||This Is England||2006||86||7.7||$2,380,000|
|24||The Last Exorcism||2010||63||5.6||$1,800,000|
|25||Shine a Light||2008||76||7.2||$1,000,000|
|27||The Squid and the Whale||2005||82||7.4||$1,500,000|
|30||The September Issue||2009||69||7.0||$1,000,000|
|31||The Devil Inside||2012||18||4.2||$1,000,000|
|37||The Hidden Face||2011||7.4||$2,600,000|
|42||To Save a Life||2009||19||7.1||$500,000|
|45||Real Women Have Curves||2002||71||7.0||$3,000,000|
|50||Dead Man's Shoes||2004||52||7.7||$1,125,000|
|52||I've Loved You So Long||2008||79||7.6||$2,500,000|
|53||The Human Centipede (First Sequence)||2009||33||4.5||$1,850,000|
|54||Beasts of the Southern Wild||2012||86||7.3||$1,800,000|
|55||Anvil: The Story of Anvil||2008||82||8.0||$500,000|
|56||Enron: The Smartest Guys in the Room||2005||7.7||$750,000|
|59||A Haunted House||2013||20||5.1||$2,500,000|
|61||Is Anybody There?||2008||54||6.8||$2,500,000|
|62||Searching for Sugar Man||2012||79||8.2||$500,000|
Notes on which low-budget films make the most money
- The financial figures come from a variety of sources, including people directly connected to the films, verified third-party data and computation models based on partial data and industry norms. It is possible that one or two of the individual figures are different to our predictions, though en mass we are confident of the larger picture.
- The number of theatres relates to the widest point of the film’s North American release.
You can’t ‘sell’ a drama but they make money – aarrgghhhh!
Well, they *can* make money. But so many are made and so few sell. If you make the Lives of Others then you’re ok. Most others are not
How do you define “at least $10 million in Producer’s Net Profit”?
I’m afraid this might not be true for at least some of the given examples?
It’s based on data from The Numbers and Nash Comp Reports. They have a mix of real-world data and financial modelling to estimate the profitability of movies. Yes, it may well be the case that some of the films ended up returning less than $10m to the producers, as all films have different deals with their particular mix of third parties. However, the core of the research is not about the exact final figure of profit down to the nearest dollar, but rather it was a way for us to pick a defined group to study.
Even if a movie here turned out to have made $9.5m rather than $10m, it would still be a breakout hit worth studying. It’s extremely unlikely that more than a handful are out, and even then not by very much. The profitability of a movie is private but not impossible to estimate when you take into account box office, video sales, industry norms and comparable movies for which you have inside data.
Cheers Stephen as always for your fascinating & important research!
Arguably though the films studied here are so rare they don’t offer much of a template to aspiring filmmakers. For instance, getting an A- or even B-list actor onboard may prevent your film from becoming among the most profitable, but it may also make it overwhelmingly more likely to break even, or not lose terrific quantities of cash.
Unless the real take-away is that we should make bad North American religious films?
This is a very good research. Thank you for sharing with us.
I had some experience in film acquisition for Asia and I do found documentaries and dramas are actually difficult to make a lot of money in international market, at least for Asia, since the culture is totally different so it is not quite easy to grab the audience in East.
Only “common language” documentaries can make some money in Asia, such as fashion, nature, food and science.
How are the Indie action/drama scripts rating this years both domestically as well as internationally? Thank you.
Lydia Damiano – Manager
I’m afraid I don’t understand your question. Can you rephrase it?
You missed the Iranian super hit A Separation.. I’m almost certain it more than made it’s 500k budget back. It was the highest rated of the films you mentioned, and I do believe it would fit into your drama category. Worldwide box office was considerably more than 20 mil. Am I wrong?
Good suggestion. Yes, Jodaeiye Nader az Simin (A Separation) cost around $800k and grossed $24m ($7m domestically and $17m internationally). Very impressive for a movie of its scale, type and origin.
However, this research is based on the movies which made more than $10m in producers net profit, and while this movie will have made it’s money back, it’s a way off the $10m mark.
Hi Stephen, Thanks for responding. I’m not sure I fully understand.
Let me explain why:
Fruitvale Station budget: $900,000
Separation budget: $800,000
Fruitvale Station box office worldwide:$17,385,830
Separation box office worldwide: $24,000,000
Both are dramas. I just don’t understand why, if the basis of measuring producers profits is subtracting the budget from the gross, and applying a standard 30% distributors fee.. how one film is in, and one film is “way off the 10m mark”
What’s the hidden variable that I’m missing here? Like, I’m sure you’re probably right. I just don’t understand why.
P.s thanks for the bit you did on TIFF. Brilliant article.
No worries, happy to expand.
I don’t have the full breakdown in front of me but just from the topline data that there are differences. Firstly, not all income is equal. Jodaeiye Nader az Simin earned just 30% of its global gross domestically (i.e. $7,098,492 of $24,426,169) whereas for Fruitvale Station domestic accounted for 91% of tracked income. That difference will play a big role in how much of the final gross makes it through to net profit. The first money to be earned in each territory will be lost to fix costs they need to repay, such as prints and advertising (P&A).
Let’s take a fictional example of two films which both earned exactly $10m worldwide. ‘Film A’ grossed its money entirely from a single country whereas ‘Film B’ split it across 20 different territories. If each territory has fixed costs of $500k, the ‘Film A’ makes $9.5m profit and ‘Film B’ makes exactly zero. These numbers are made up and over-simplified but you get the point – the final worldwide gross for two films are not necessarily going to result in the same profit.
Variety Insight lists almost 50% more territories for Jodaeiye Nader az Simin than Fruitvale Station.
Secondly, the kinds of deals on offer to the two films will vary wildly. Fruitvale had the home advantage in the US and the power of the Weinsteins behind it. I don’t know the private info of their deals, but I would suspect that even if they grossed the same amount in the same territories as each other, the Weinstein-backed film would end up with a higher net profit. It’s also a matter of fewer middle-men for Fruitvale and each layer of middlemen represents extra costs to repay and an extra hand taking from the recoupment waterfall.
Finally, the kinds of post-theatrical deals on offer to the two films will differ. American TV/VOD deals for an American movie will be a lot better than and American TV/VOD deals for an Iranian film. The biggest film markets in the world all skew in favour of Fruitvale.
There may be other factors too, but I don’t have the breakdown to hand.
I hope that helps?
Many thanks for the question and the answer! Clearly explained and essential information to those of us who work primarily in the development area. It opens up some magical ideas about what kind of film you are making, the how-to of financing it (developers work with producers on that) and what you can asses is you audience base.
Thank you so much Stephen for you excellent research and to Rob who asked such an good question
Thanks for asking about this one.
The first thing to note is that our analysis is based on all sources of income and expense, not just theatrical distribution.
I looked at our full set of numbers for A Separation vs. Fruitvale Station. The main difference between them is in video rentals, which includes rental of physical disks through RedBox, transactional VOD from platforms like iTunes, and subscription VOD (Netflix). Fruitvale Station did much better on RedBox than A Separation, according to our tracking, which was enough to put it in the $10m-profit group. A Separation was very profitable, but didn’t have quite enough video revenue to reach that profit level, according to our tracking.
Thanks again for asking,
Bruce Nash (The Numbers)
Took a “make a feature” class with Dov Simmons years back, was amazing. He was a line producer for Korman. Seems like he nailed most of the genres to break into industry. Great course!
As a guerilla filmmaker, this list makes me happy. Unfortunately, as a sci-fi filmmaker I’m stuck with either a “high concept” non-action drama or a horror film, but my preference is action. Guess action will have to wait for the big $$$ — OR I find me an angel investor!
Happy 2017 all!
I think if you’re setting out to write a faith based movie and you really don’t want to and are just doing it cause of the great returns from the niche audience, you’ve lost already.
Weird there were no numbers for comedies though – Napoleon Dynamite, Juno, Lost in Translation, My Big Fat Greek Wedding, those made a ton of money and are indies.
I agree. Of all genres, faith-based movies trade on sincerity and truely understanding the audience.
Some of the films you list were too low budget for our study (i.e. Napoleon Dynamite) while others were too expensive (i.e. Lost In Translation).
Blair Witch Project? Cost $60,000. Grossed $248m.
Yes, but that film was outside of the budget range we were looking at as we were trying to find repeatable patterns that professional filmmakers can build plans upon. Films of micro-budgets are a lot more of a crap shoot, with extremely low odds of success for each film.
I’m a little confused. Box Office Mojo lists Dead Snow’s worldwide gross at just under $2 million. Also, you have the poster from Dead Snow 2 showing, but no info on it.
That’s the box office gross, not the Producers’ Net Profit (which was the test for this particular project). The film was very successful on other platforms.
The poster image is the one for the sequel by mistake. I’ll correct it. Thanks for pointing it out
Good article except Monsters is not a horror film. If anything it is a sci-fi drama or thriller. So it is possible to make a profitable film outside of the 4 categories you mentioned, just not as likely.
I realize comedy wasn’t there because of low scores all around, but what about Napoleon Dynamite?
It sat just below the cut-off for the budget range we looked at
Absolutely fantastic piece of research – nice and clear – I love the cluster plot at the end
Really great stuff Stephen, I found it on the American Film Market site, and now I am looking at your other research
This is great. Will you also share the complete list of films such as you did in the AFM report last year through 2015? I’d embrace the opportunity to compare the more recent releases.
The lack of comedies baffles me. They can be done low budget and they work best with a live audience. Do you have a list of comedies that were in your range and what they grossed? Or just a list? And were there many successful comedies below your budget range?
Wonderful research, thank you for sharing. It makes sense for documentary filmmakers to pick a subject that has a built-in audience, rather than dedicating months/years on something that has limited appeal, no matter how interesting that person or topic seems to the filmmaker.
How I can screen Iranian movies theatrically in USA?
Or in home video.
Do you know anyone or any company that help us?
Is there any value in members of the public even looking at sites like BoxOfficeMojo for stats if so much is hidden?
I joined a debate on the relative success of Jennifer Garner as an actor on social media recently and cited her last two films: Live Simon and Peppermint as successes – from a movie-goer and profitability, if not industry critic, standpoint.
I cited IMDb and Rotten Tomatoes for the viewer ratings and BoxOfficeMojo for the financials.
Love Simon had a $17mil budget and a box office return of $41mil. Peppermint had a $25mil budget with a current box office of $49mil.
I was shot to pieces for the financial stuff because, and this was the frustration, everyone had a whole different idea of what determines financially profitable.
There are plenty of review sites, both critical industry and viewer, so as long as we cite our source we can debate and discuss. How on earth can the public form an opinion on commercial success though when there is no single financial model, no common point of reference? !
Yes, it can be a very frustrating experience. Online data is incomplete in so many ways, making it tricky to develop a clear idea of the true picture.
I would say that using the rough rule of thumb, both of those movies were likely to have made money. But of course it’s only a rule of thumb and so may not apply to those specific films. They certainly performed better than most other movies of a similar scale.
Here are a few links to help with understanding the topic:
Do Hollywood movies make a profit?
How movies make money: $100m+ Hollywood blockbusters
How films make money pt2: $30m-$100m movies
How is a cinema’s box office income distributed?
I hope that helps
I am an award-winning film director.
I am confident I have the very recipe for a global cinema phenomenon or success, the like of which the world hasn’t seen before.
I know the audience are all there waiting for it! 70% of regular moviegoers are young people 30 or below. Married people are too busy with work and family to go to the cinema often. I know what everyone of these 70% of moviegoers love: what I am going to give to them. And I also know what the 30% of the older regular moviegoers love: the same. There’s a common thread that goes through all the 100% of moviegoers. So, everyone in the audience will love my movie! Just like Sound Of Music. Great story, music, cast and acting.
I don’t want to give away my trade secrets too much. But I will just say this: Why is Gangnam Style such a phenomenal success with ALL ages when it was uploaded on YouTube? The answer is self-explanatory in the video. I got inspiration from that.
Add this with Elvis and Sound Of Music and you will have an idea of what my recipe for success is. By the way, it’s not a movie about Elvis. Anyway, I am a big fan of Elvis. All his 30-plus movies made money for the studios concerned. He was a phenomenon himself! And his 30-plus movies too — they all made money for the studios concerned!
My budget is $500K to $1 million. If I can raise more it will be great. My lead actors are not movie stars. Cos I don’t want familiar faces. But they must be gorgeous-looking. The man must be a fantastic singer, tall, sexy, confident and charismatic, like Elvis. Acting must be excellent. He doesn’t have to look like Elvis. All songs are original, beautiful and catchy, just like an Elvis song.
I am creating the story now.
I have to make a trailer that blows people away with incredible music, good-looks, singing, dancing, romance, etc.
As you can see, I don’t care about the so-called trends that some indie films seem to set, like those Stephen highlighted. I based my assessment on what audience really love 💓 in movies from 60 years of watching Hollywood movies. There’s great wisdom there.
Have I given away too much of my secrets? 😀
Hi, I’m writing a research analysis on romantic dramas and I wanted to look into the financial budgets of films under this genre in comparison to the 1900s to modern-day. Do you know how the budgets have evolved? Thank you
Hi Valentia, I don’t know off-hand but please do share what you find. You may struggle to find enough budget figures for the dataset as they’re often kept private and the further back you go, the less data there is. But give it a go and share what you find. Good luck!
Is there a comparison chart of profitability of Indie Films with Theatrical Releases vs. Indie Films with no Theatrical Release.