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Friday
Oct302009

'Paranormal Activity' The Most Profitable Movie Ever

I received a few contrary comments in September when I claimed that the real top five movies of the summer may not have included Transformers and Harry Potter, the movies that made the most money. Instead, among big time summer movies, I argued that The Hangover, The Proposal, Ice Age, Up, and Star Trek were greater successes because most of their money came after the first two weeks of release, the point at which the majority of movies scale back on their advertising efforts and make money based solely on word of mouth.

Extending that argument, I pointed in particular to the success of The Hangover and The Proposal, modestly budgeted comedies that wound up making about thirteen and seven times their production costs in global revenue. If you don't think the profit margins matter, ask DreamWorks why there's not going to be a sequel to Monsters vs. Aliens, which made $379 million worldwide but cost $175 million before marketing and distribution expenses. Ice Age, on the other hand, cost less than half as much as Transformers and made significantly more internationally, so how can the alien robot cars movie be considered a bigger hit?

Now we're looking at entirely absurd profit margin: Big Picture reader Emo sent me a story from The Wrap indicating that Paranormal Activity is now the most profitable film of all time, a destination we thought was coming sooner than later. If you use the same math that gives The Blair Witch Project a 414,233% return on investment, Paranormal has now hit an unthinkable 433,900% ROI.

When you think of movie financing in those terms, what Transformers and other blockbusters do seems less impressive. For every dollar spent, you might give Michael Bay five in return. That's without marketing costs figured in, and of course, that would significantly hamper Paranormal's ROI as well, because almost any advertising at all would cost more than the movie itself.

Still, that's why the central argument of the summer movie post-mortem was that the opening weekends, while gawdy, don't tell the whole story, and in some cases are even terribly misleading numbers.

Below is the list of the top five goldmines, based on this formula: Gross minus Budget divided by Budget times 100. Please note that Paranormal will expand its lead considerably now that it's slated to open in foreign markets. If it hits $150 million in total ticket sales, then the ROI will be one million percent. I have very little doubt it will break that number.

The Top Five Most Profitable Movies:
1 - Paranormal Activity (2009) - (433,900% ROI)
2 - The Blair Witch Project (1999) - (414,233% ROI)
3 - Road to Ruin (1928) - (99,900% ROI)
4 - Birth of a Nation (1915) - (8,354% ROI)
5 - E.T. (1982) - (7,451% ROI)

References (1)

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Reader Comments (9)

Wow this is just insane... I still havent seen the film and Im getting a big group of friends to go see it who have not either...

So our money will contribute, I just hope it lives up to the unbelievable expectations that I have, but I dont doubt it.....

Friday, October 30, 2009 | Unregistered CommenterSEAN

Horror movies don't need to be expensive or bloody, just scary. People will see them if they are.

Friday, October 30, 2009 | Unregistered CommenterChris

In calculating the ROI for ultra-low budget films, wouldn't it be more accurate to also include the $ the big studio pays for the movie rights since it would be impossible for an independent filmmaker like Oren Peli to market Paranormal Activity himself & make the multi-millions that Paramount is making?

Friday, October 30, 2009 | Unregistered CommenterKrystal

THE MOVIE SUCKED - IT WASN'T REALLY SCARY AT ALL !!!! AND I SCARE VERY EASY......

Wednesday, November 4, 2009 | Unregistered CommentersHANNON

Another movie that is coming out that offers a clean alternative is ‘’Paranormal.’’ Below is some additional information about this new thriller!!

Paranormal, the latest supernatural thriller from Cross Shadow Productions, (the
creators of the Dove.org approved, best-selling BMG releases: Pray and Pray 2:
The Woods) will be available in stores nationwide January 26th 2010. The 2009 Mrs. America is starring in it.

See more information and trailers at:
www.ParanormalTheMovie.com

Following the success of family-friendly suspense/thriller The Exorcism of Emily
Rose (Sony Pictures), comes a riveting supernatural thriller in the vein of the hit
SyFy television series, Ghost Hunters and Frank Peretti's House (Roadside
Attractions / Lionsgate).

Paranormal follows best-selling, self-made novelist Greg Evans struggling through the worst case of writer's block in his award-winning career. In a desperate search for
inspiration, Greg quickly finds himself immersed in a world he is not prepared to face.
Turning to a group of paranormal investigators, Greg and the ghost hunting team search for proof and answers, yet are unaware they are about to have an experience of a
lifetime! None will leave the way they came. Paranormal will peel back the supernatural curtain to reveal how The TRUTH will EXPOSE the darkness!

Thursday, November 5, 2009 | Unregistered CommenterJen

Krystal -

The acquisition price would be considered kind of an aftermarket expense, like marketing and distribution costs. If you were to factor it in, obviously, the ROI would go down tremendously, but then you'd have to do it for all the other movies, too. Even Blair Witch would be impacted by that, and so would E.T. because it rented theater space for over a year. Even with that, though, Paranormal really only has prints to buy and theaters to reserve; Paramount didn't exactly fork over a lot of dough for the rights.

Friday, November 6, 2009 | Registered CommenterGet The Big Picture

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Wednesday, November 16, 2011 | Unregistered Commenterlniocg lniocg

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