By Paula Bernstein | Indiewire March 9, 2014 at 4:49PM
Everybody wants to know the secret to Jason Blum's success. If there was a turning point for the indie producer, it was, of all things, "The Tooth Fairy," the big-budget studio film starring Dwayne "The Rock" Johnson. Having worked in acquisition for Miramax in the '90s, Blum eventually left to forge his own path as an indie producer. "I produced eight movies, 7 1/2 of which nobody has ever heard of," Blum told the audience at his SXSW keynote address earlier today. "I got frustrated making movies nobody had heard of," he explained. So he went on to produce "The Tooth Fairy."
"I couldn't stand it. It was what I thought I always wanted. I was there every day in the trenches and I hated everything about that job. But what I loved -- and what I got from 'The Tooth Fairy' -- was to see how studio movies were released," he explained.
The experience inspired him to create Blumhouse Productions and a business model that relies on low-budget films ($3-5 million) using experienced directors looking for creative control. After "Paranormal Activity" made Hollywood take notice, Blum stuck with the successful model and repeated the success with low-cost franchises like "Insidious" and "The Purge."
"Everyone thought I was nuts because everyone thought 'Paranormal Activity" was a magic trick... Then we had the sequel to 'Paranormal' and 'Insidious' and 'Sinister.' Recently, we had 'The Purge' which was the moment when the establishment finally was like 'this guy is on to something.'" According to Blum, "Purge" cost $3 million and grossed $80 million worldwide.
Blum outlined the key elements of his low-budget model:
1. Everybody above the line works either free or for scale. If an actor asks for a trailer or other frills, he'll tell them, "You can have all those things, but you have to pay for it yourself. But more often than not, those things go away."
2. Never work with first time directors. "We work with experienced directors. We make a deal -- we're not going to pay you a lot, but you get to do what you want to do. Most directors get final cut. It's 'auteur' filmmaking, but for commercial movies... I tell directors: 'I can't promise you a hit, but I can promise you the movies is going to be yours.' When you work for a studio, they pay you a lot of money, but in exchange for that, they tell you what to do.
3. Cut down on time spent negotiating. The way we structure our backend, we key the payments to the box office -- so that cuts the negotiating way down and it's very transparent. One of the things I'm most proud of is that we're really transparent with our process."
4. Don't release every movie wide. "One of the benefits of doing low-budget movies is you don't have to release them wide to recoup. You can release it in a smaller way, make your money back and keep going."
5. Don't go with the hot directors. "The directors that everyone's chasing, we're not chasing. If someone says 'we're meeting every studio in town,' I always say they should enjoy those meetings and shouldn't come here. My perfect director would be James Wan, who had done "Saw" and had two difficult experiences with a studio. He couldn't get a movie made and had a ton to prove and there was no way 'Insidious' was not going to be a great scary movie... Experienced directors can do a lot more with less."
6. Story and character matter -- even in horror movies. "The scares don't work if the story and characters work... if you take away the toys, the director has nothing to focus on but those things. I think it makes the movie stronger."
7. Don't think about a sequel until the original is shot. "Whenever anyone is doing an original movie and they say 'we want to end it this way for the sequel,' I always say 'don't do that.' You can always figure out a sequel, but it's really bad to plan for a sequel. We don't think about the sequel. We think about making a really good movie and if it's good, we think about a sequel."
8. Shoot in Los Angeles. Blum said he shoots 80% of his films in Los Angeles because "you get the best actors" and talent is willing to accept a smaller paycheck if it means they can "kiss their kids goodnight."
Now that Blum has a number of financially successful movies to his credit, he is using that power to shepherd non-genre indies such as "Whiplash," which recently received raves at Sundance. "I could never have made 'Whiplash' five years ago," said Blum, who also produced "Creep," which is having its world premiere at SXSW.
Talking about the future of film distribution, Blum emphasized that "a wide release shouldn't always be the golden ring" and anticipated that theatrical windows will eventually collapse. "The fact that we haven't collapsed windows is pushing the best artists into TV," he said, "'True Detective' wouldn't have happened eight years ago." Along those lines, he's trying to emulate his low-budget film model in TV. "We're interested in having the same conversation with showrunners that we're having with directors... Let's make 10 episodes for $300,000 each."