Movie executives seeing red

LOS ANGELES -- This year's crop of gore-filled horror films may send a shiver down the spines of Hollywood executives. And not because of the on-screen terror.

The studios are taking in less on each film as they release a record 39 horror and thriller movies in the United States this year, according to industry tracker Media By Numbers LLC. Sequels such as "Hostel: Part II" aren't matching the appeal of the originals.

Hollywood has saturated the market since the success of Lions Gate Entertainment Corp.'s original "Saw" in 2004, putting at risk one of its best moneymakers. With the glut of torture films, executives say, they need to find new ways to appeal to teens and young adults who crave thrills.

"We may have to kind of go to a different type of horror movie," Peter Block, head of acquisitions at Lions Gate, said from his office in Santa Monica . "Maybe you don't call them horror. Maybe you go to more thrillers."

Horror films and thrillers are averaging $24.6 million in ticket sales this year, down 25 percent from 2006, according to Media By Numbers, based in Encino. Sales peaked in 2004, when 19 films took in $1.01 billion, or an average of $53 million. In 2000, just seven were made.

For all films, US box-office sales have increased 3.1 percent to $4.96 billion so far this year, while attendance has fallen less than 1 percent, according to Media By Numbers.

Lions Gate, based in North Vancouver, British Columbia, has profited as much as any studio from the public's appetite for carnage and has much to lose amid the glut. The first "Saw," in which a twisted killer forces his victims to kill themselves or others, cost $1.2 million and took in $103 million, according to Box Office Mojo LLC.

In all, three "Saw" movies have brought in $415.7 million worldwide in ticket sales and cost $15.2 million to make, Box Office Mojo said. "Saw IV" splashes into theaters in October.

The success of "Saw" has triggered sequels and imitators, including Lions Gate's "Hostel" movies, as well as "Turistas" and remakes of Wes Craven's "The Hills Have Eyes," all from News Corp.'s Fox studios.

The bodies will keep piling up. "Captivity," from Lions Gate and After Dark Films, opens this weekend. "Halloween," a remake of the 1978 slasher classic, will be released by Metro-Goldwyn-Mayer Inc. and Weinstein Co. on Aug. 31.

This summer's best bets in horror so far include two that run against the trend, relying more on suspense than dismemberment. "Disturbia," from Viacom Inc.'s DreamWorks SKG, features a teen voyeur who becomes convinced his neighbor is a killer, similar to Alfred Hitchcock's 1954 thriller "Rear Window" starring Jimmy Stewart and Grace Kelly.

The film cost $20 million and has had worldwide sales of $88.4 million.

MGM and Weinstein Co.'s "1408," based on a Stephen King short story, is another that relies on tension and surprise for scares. The film, made for about $25 million, has taken in $54.8 million worldwide.

"It's suspense, along the lines of 'Poltergeist' and 'The Shining,' " studio co founder Bob Weinstein said in an interview. "That has an audience as well, a bigger audience."

Many of this year's films may make money because production costs are low and horror does well in the home-video market, said David Bank, an entertainment analyst at RBC Capital Markets in New York.

"Hostel: Part II," he said, will probably break even. The film was made for $10.2 million and has had sales of $28.2 million. The 2006 original, by contrast, cost $4.8 million and took in $80.6 million.

"Bug," also from Lions Gate, probably won't, he said. The film, made for an undisclosed sum by "The Exorcist" director William Friedkin, has taken in $7.5 million in worldwide sales.

Lions Gate shares have fallen 2.2 percent since "Hostel: Part II" opened on June 8. A week earlier, the company said fourth-quarter profit fell 35 percent. The stock had gained 24 percent in the preceding 12 months. Lions Gate closed at $11.39 Friday.

Brad Miska, editor of the Bloody-Disgusting.com horror-movie website, says ticket sales will improve when the movies get better. "Right now we're waiting on some better product," he said.

Lions Gate hasn't decided whether there will be a third "Hostel" film, vice chairman Michael Burns said. The company expects "Saw IV" to do well, in part because each of the sequels has earned more in worldwide sales than the predecessor, Burns said.

Burns said he expects other studios to make fewer horror films in response to poorer sales.

"Are we very conscious of the number of horror films that have been produced recently? Absolutely," Burns said. "Do we have too many of them in our stable? Absolutely not."

Weinstein isn't choosing one brand of horror over another. Two other King adaptations under development, "The Mist" and "Cell," have the potential for on-screen bloodletting.

"The Mist" scheduled for November, is about a fog-bound village besieged by violent, otherworldly creatures. In "Cell," planned for 2008, people are turned into zombies by a pulse transmitted over mobile phones.

"I'm just picking them as I see them," Weinstein said.