Why Horror Movies Are an Amazing Deal for Studios

Courtesy of Universal Pictures

What do The Conjuring 2, Don’t Breathe and The Purge: Election Year have in common? Yes, all three are aptly-named, gore-packed horror flicks. More surprisingly, all three made a killing at this summer’s box office.

In what was an otherwise mostly humdrum season, scary movies had a strong showing—four of them cracked the $100 million mark in global ticket sales. That’s nowhere near what typical blockbusters bring in, but horror delivered solid returns for the studios that distributed them. The genre often relies on unknown actors, so budgets can easily be kept to an average of about $5 or $6 million a pop.

Consider New Line Cinema’s Lights Out, a blood-curdling tale about murderous supernatural being that preys on a family. Made on a shoestring budget of just $4.9 million, the summer flick has made nearly $142 million in the global box office to date. The Conjuring 2, a sequel to the original 2013 film about a husband-and-wife team of paranormal investigators, was a bit of an outlier. It cost $40 million to make, mostly due to some expensive special effects (think lots of moving furniture). But it still managed to rake in nearly eight times its budget—upwards of $320 million globally—and even slayed the competition in its opening weekend, coming in at No. 1.

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Profit aside, there’s another appealing aspect to horror movies: they attract a coveted demographic—teenage girls. With movie theater attendance down in recent years, the industry is hungry for anything that will attract younger audiences.

And at such a low price point, a movie can break even quickly and—often—result in fat profit margins. That’s especially attractive in today’s Hollywood, where the performance of big-budget movies—almost always a gamble—has been particularly hard to predict lately. A horror movie, meanwhile, is an easy bet. Chances are, even if it flops at the box office, you’ll still make your money back. And lately, studios have been making it back in spades.

A version of this article appears in the October 1, 2016 issue of Fortune with the headline “I Know What You Watched Last Summer.”

September 26, 2016: This article was updated to include New Line Cinema, which produced Lights Out. (Warner Bros. marketed and distributed the film.)

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