Producer Jason Blum explains how to make blockbuster movies on a budget | Code Media 2017

The movie studio Blumhouse Productions has become known for doing less with more. Namely, turning low-budget flicks — think “Paranormal Activity,” “The Purge” franchise and indie sensation “Whiplash” -- into blockbuster hits.

So what’s the formula? Blumhouse CEO Jason Blum outlined it in a conversation with Peter Kafka at Recode’s Code Media conference at The Ritz-Carlton in Dana Point, Calif.

The studio typically spends no more than $4 million to $5 million on a film — and that number isn’t pulled out of thin air. Blum said digital distribution through channels like iTunes can guarantee about $2 million in sales in the U.S. and another $2 million overseas.

Blumhouse also doesn’t decide on whether a movie is going to the big screen or straight through digital until it’s finished. So even if a film bombs and isn’t even put into theaters, the worst-case scenario is typically a $1 million loss.

“I say to the directors ‘I guarantee your movie will be seen, but I’m not guaranteeing how it will be seen,’” Blum said.

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