As someone who has loved the “midnight movie” genre for as long as I can remember, I was extremely heartened by to see the Wall Street Journal finally delve into the economics of chainsaw wielding psychos, radioactive mutant killing machines and deranged grindhouse horror fests. Their findings? Apparently I’m not alone.

The truth is that an entire segment of the film industry has frequently been overlooked when measuring box office results in large part because it has traditionally followed an under-the-radar path to long term success. Unlike large budget productions, the starting point for most midnight movies has either been an extremely limited release, a festival showing or straight to DVD distribution. Consequently, those that do succeed tend to thrive almost entirely on word of mouth from loyal fans. The results, however, are highly impressive with many such films vastly outperforming their mainstream counterparts on a cost vs. revenue basis. Most interestingly this pattern holds true both for movies like Saw which achieved widespread theater distribution (Cost: $1.3 million – Revenue $103 billion) and the more recent ultra low budget straight-to-DVD flick “Absentia” (Cost: $70,000) which despite having not released its revenue, has generated enough buzz among Netflix fans to earn its director nationwide platform for his next blood-fest entitled “Oculus.” Moreover, in an industry that loves nothing more than sequels, midnight movies are perfectly situated to become decade-long cash machines (after all, if you’re undead of course you’re coming back for rounds two through ten…

Whether you personally enjoy these movies or not, this is an undeniably fascinating business story and one that will hopefully propel Hollywood to reconsider some of its preconceptions that far too often lead to over-hyped big budget monstrosities that frequently barely break even. Consumers crave great entertainment and genuine creativity. And as long as the big stars and studios fail to deliver, audiences won’t hesitate to spend their dollars accordingly.

[“Cheap Horror Movies Make A Killing,” The Wall Street Journal, 9/15/2013]