The films generating the greatest return on investments in 2014 were from the categories of Horror, Faith-Based and Young Adult. The Young Adult category was of no surprise, as it always generates large audiences in the most sought after demographics. The real news was the dramatic increase in Horror and Faith-Based market profitability.

Both categories thrive on ultra low budget films and have enough higher budget films to skew the profit margins for the industry as a whole. For years, Hollywood banked on the common laws of averages that drove one film out of every eight to make enough money to cover all eight films and then some. But today, with the number of other entertainment venues reducing the audience, Hollywood looked to the big blockbusters to cover the costs of all other portfolio films.

Independents typically don’t have the luxury of producing a hit rate of 8:1 to cover the expenses of all its films. To compensate most production companies reduced the budget on each production to force profitability. However, packaging films for distribution is still wise when films such as “God’s Not Dead” becomes a domestic breakout hit with $61MM at the box office and $26MM in video sales to date – Not bad for a $2MM budget.

The Horror genre also has skewed elements in its numbers. With 900 Horror films made in 2014, only 30 received proper distribution. Of those 30, three films (Annabelle, Ouija, Deliver Us From Evil) generated two thirds of the $255MM box office revenue for the Horror category (A hit rate of 10:1). However, far more Horror films will contribute to the bottom line in video and television sales, which is on the rise.

The Faith-Based market had more breakout hits (Heaven is for Real, God’s Not Dead, Son of God, When the Game Stands Tall) in 2014 than the Horror market. The genre saw 470 films made, 23 get proper distribution and had four hits (a 6:1 hit rate). The four films generated $212MM of the $277MM box office receipts, which equates to 76% of the genre’s revenue.

From an investor’s standpoint, Faith-Based films are the best opportunity for investment when the films are packaged. It’s been proven year after year that Horror and Faith-Based films are still risky investments when they are not packaged. Yet, that’s exactly how most are produced, driving up the risk factor for the investors.

Both the Faith-Based market and Horror market took a dive in 2015 with only a couple hopefuls to be released in the fall. Most analysts are suggesting the drop is due to shifts in the marketplace. The Horror genre is getting more studio financing for direct to television releases and the Faith-Based market released more poorly constructed films thinking their audience would watch anything with the “right” content.

It’s still my passion to package 6-8 great stories using high production values for the general market with great moral and wholesome themes. I firmly believe that is still the best way to drive the greatest revenue and the largest audience for any genre. But, we’ll see what the future holds.

Copyright © 2015 by CJ Powers