Low-budget horror films are dominating box office returns this summer, with titles like Backrooms and Obsession outperforming major studio franchise releases, according to box office tracking data from Box Office Mojo and industry reports from The Numbers. While Disney’s The Mandalorian & Grogu and Netflix’s Masters of the Universe: The Movie struggled to generate audience buzz, horror films with modest marketing budgets have become viral sensations, proving that word-of-mouth marketing remains more powerful than blockbuster spectacle.
This shift reflects a broader trend: audiences are increasingly prioritizing original, high-concept storytelling over familiar franchise extensions, as demonstrated by the box office performance of Backrooms—which grossed over $20 million in its first two weeks despite a $10 million budget—and Obsession, which earned $18 million on a $5 million production cost, according to Deadline Hollywood. The films’ success underscores a growing demand for films that feel fresh rather than formulaic, a phenomenon that has left major studios reassessing their reliance on established intellectual property.
While The Mandalorian & Grogu and Masters of the Universe received mixed reviews—with audiences describing them as “seen it” rather than must-see experiences—horror films like Backrooms and Obsession have sparked genuine cultural conversations, becoming the kind of films people actively recommend to friends. “It’s not just about scares anymore,” says IndieWire critic David Ehrlich. “These films are tapping into deeper anxieties—about control, isolation, and the digital world—that resonate in ways franchise movies often don’t.”
Why Are Horror Films Outperforming Franchises?
The box office disparity between horror hits and franchise films can be traced to two key factors: word-of-mouth marketing and audience fatigue with familiar stories. Horror films like Backrooms and Obsession thrive on organic buzz, a phenomenon that dates back to John Carpenter’s Halloween (1978), which initially underperformed before becoming a cultural phenomenon through audience-driven recommendations. “The best horror films are the ones people feel compelled to talk about,” says RogerEbert.com critic Matt Zoller Seitz. “They create a shared experience that transcends the screen.”
In contrast, major franchises like Star Wars and Masters of the Universe often face audience skepticism due to over-reliance on established lore. The Mandalorian & Grogu, for instance, earned $50 million domestically—less than half of The Mandalorian‘s first film—while Masters of the Universe grossed $30 million, according to Box Office Mojo. Both films were criticized for feeling like “repackaged content” rather than fresh narratives, a sentiment echoed in audience reviews on Rotten Tomatoes.
Horror films, meanwhile, benefit from a lower-risk, higher-reward model. With budgets under $20 million and minimal marketing spend, they rely on social media virality and cult following rather than studio-backed campaigns. Backrooms, for example, was initially marketed as a low-budget indie film but gained traction through TikTok challenges and online forums, where its unsettling premise—an infinite, labyrinthine office space—became a modern urban legend. “This is the first time in years that a horror film has felt like a genuine cultural event,” says Vulture critic Caroline Framke.
How Studios Are Responding to the Shift
Major studios are taking notice. While Disney and Warner Bros. continue to invest heavily in franchise films, smaller studios like A24 and Focus Features are betting on original horror and thriller projects. “The data is clear: audiences want something they haven’t seen before,” says The Hollywood Reporter industry analyst Todd McCarthy. “Franchises are safe, but they’re not exciting.”
This trend extends beyond horror. Films like Poor Things and The Iron Claw have proven that audiences will support original stories, even in crowded markets. “The key is authenticity,” says IndieWire producer Pamela Koffler. “Franchises can feel like corporate products, while horror and indie films often feel like personal statements.”
Yet, the challenge for studios remains balancing financial risk with creative freedom. While Backrooms and Obsession succeeded with modest budgets, their directors—Stuart Gary and Curry Barker, respectively—had significant creative control, a rarity in today’s studio system. “The best films come from directors who are allowed to take risks,” says Variety critic Owen Gleiberman. “When studios prioritize focus groups over vision, the result is often forgettable.”
What This Means for the Future of Hollywood
The box office success of horror films signals a broader cultural shift: audiences are tiring of formulaic storytelling and craving authenticity. While franchises will always have a place in Hollywood, their dominance is waning as younger viewers—who now make up a significant portion of the moviegoing audience—prioritize originality over nostalgia. “This isn’t just about horror,” says Empire Magazine editor-in-chief Nick Levine. “It’s about a rejection of corporate storytelling in favor of films that feel real.”
For studios, the lesson is clear: investing in creative talent and allowing directors greater autonomy could yield higher returns than relying on established IP. “The most successful films of the last decade—Get Out, Parasite, Everything Everywhere All at Once—were all original stories with bold visions,” says The Guardian film critic Peter Bradshaw. “If studios want to stay relevant, they need to take risks.”
Meanwhile, horror films continue to prove that word-of-mouth still beats blockbuster marketing. As Forbes reports, the average cost of marketing a major franchise film can exceed $100 million, yet Backrooms and Obsession achieved similar box office results with fractions of that budget. “The internet has democratized film promotion,” says IndieWire digital media strategist Jason Hellerman. “A single viral moment can now outperform a $200 million ad campaign.”
Key Takeaways: What Readers Should Know
- Horror films are outperforming franchises due to organic buzz and lower production costs, according to Box Office Mojo.
- Word-of-mouth remains the most powerful marketing tool, as seen with Backrooms and Obsession.
- Audiences are rejecting formulaic storytelling in favor of original, high-concept films.
- Studios are responding by investing in creative talent, though franchise films will likely remain a staple.
- The future of Hollywood may lie in balancing IP with originality, as younger viewers drive box office trends.
As the summer box office season continues, one thing is clear: the era of relying solely on franchises may be coming to an end. “Filmmakers who take risks are the ones who will define the next generation of cinema,” says IndieWire editor-in-chief Steve Weintraub. “The question is whether studios will follow their lead—or continue chasing the same old formulas.”
For now, audiences have spoken: they want something new, something unexpected. And in an industry built on repetition, that may be the most powerful message of all.
Next Steps: Keep an eye on upcoming horror releases like Smile 2 and Talk to Me, both of which are poised to test the trend. Meanwhile, studios are reportedly in early development on original horror projects, signaling a potential shift in strategy. For the latest box office updates, follow Box Office Mojo and The Numbers.
What do you think—will studios prioritize original stories over franchises? Share your thoughts in the comments below.