While any film genre can be made on a low budget, horror has repeatedly proven that with a good idea, a small budget can bring in millions of dollars in profits. You only have to look at the most profitable films in history to see this.
And it's also a genre of opportunity. Many of the great horror directors got to where they are by creating a short film with their own money and using it to secure financing for a feature film. A technique that while not exclusive to horror, in fact one of the first to do this was George Lucas with "Thx 1138", is the one in which it occurs most frequently.
These are some of the clearest examples of this situation:
- Paranormal Activity

Budget: $15.000
Box office: $193.335.800
With a profitability of 12,889%, it is by far the most profitable film in history, and all with a story that is honestly quite simple, but one that managed to attract the public and has already generated 6 sequels.
The film was made without any production company's help, and once finished, it was shown to Miramax, who debated whether to release it as is or remake it, but ultimately decided to leave it intact.
Fun fact: The head of Miramax decided to show the film to Spielberg, who returned it in a garbage bag the next day because he thought it was cursed, but he still became one of the producers.
- The Evil Dead

Budget: $375.000
Box Office: $2.400.000
Cult classic, B-movie icon, and debut feature by Sam Raimi (Spiderman, Drag Me to Hell). The director used his short film "Within the Woods," which is considered a prequel to Evil Dead, to secure the necessary funding. The film already featured some of Raimi's signature elements, such as the presence of Bruce Campbell, crazy camera movements, and a penchant for horror mixed with comedy.
For the subsequent remake of the franchise, Raimi hired Uruguayan Fede Álvarez after seeing one of his short films uploaded to YouTube, giving the opportunity to someone else. A move that worked out very well, producing an excellent new version of the film and bringing a new name to the board, who later directed "Don't Breathe" and "Alien: Romulus."
- Mamá

Budget: $15.000.000
Box Office: $146.428.180
Moment my country. Argentine director Andy Muschietti currently holds the honor of having the highest-grossing horror film in history with his adaptation of IT, but before that, he managed to break into the big leagues thanks to Guillermo Del Toro. The Mexican saw the short film Muschietti had created about two girls who are haunted by their demonic mother and offered to produce a film based on that idea, which led to 2013's "Mamá."
The director is currently working on a new Batman film that will introduce us to the Dark Knight of the new universe that James Gunn is building.
- The Blair Witch Project

Budget: $60.000
Box Office: $248.639.099
Obviously, if we're talking about Paranormal Activity, we couldn't leave out its great inspiration, the film that sparked the found footage craze, one of the cheapest and most successful horror subgenres.
It's the second highest-grossing film in history with a 4143% (I told you the difference between the top two spots was huge), and it was made by a group of film students who noticed they were more scared of paranormal documentaries than traditional horror films.
It is believed to have been one of the first major releases to be marketed online and the first to go viral, even though the technology was not the same as it is today. It's truly a film to look to for inspiration in terms of its marketing and low budget.
- Saw

Budget: $1.200.000
Box Office: 103.900.000
James Wan and Leigh Whannell are two of the biggest names in horror today, responsible for the Insidious, The Conjuring, and Saw sagas. The first installment of the latter was the first film they made, and for which they shot an 8-minute short film with their own money (around $5000) to sell the idea to producers. And since everything is related to everything, initially their idea was to finance the entire film themselves with $30,000, an idea they had after seeing Aronofsky's Pi and The Blair Witch Project (but then the story became too ambitious for the money they had).
The short film featured the bear trap scene that was later featured in the movie, and the producers liked it so much that, in addition to giving them the money they needed, they allowed Wan to direct it.
- 9

Budget: $30.000.000
Box Office: $48.400.000
Of course, there's also room for children's horror films on this list, and few films deserve that classification like this one. This post-apocalyptic story about rag dolls containing human souls and being chased by mechanical creatures is pretty creepy.
The film was not cheap, it has the highest budget of all those mentioned, but its origins are indeed low-budget. “9” was born as a short film that Shane Acker made as a university project, and it ended up in the hands of Tim Burton (who else?) who decided to produce a feature film based on it.
Unfortunately, as you can see from the data above, it didn't do very well at the box office, but for those of us who love dark animation, it's in a special place.
- Lights Out

Budget: $4.900.000
Box Office: $148.000.354
David F. Sanberg is currently about to release the adaptation of the video game Until Dawn, but his beginnings go back to this very entertaining horror film that he managed to make thanks to a homemade short film. Sandberg and his wife recorded a 3-minute video for a 2013 film festival about a creature that appears when the lights go out, and although they didn't win, it became very popular on YouTube, which caught the attention of producer Lawrence Grey and James Wan.
It's funny how such a simple idea can go from being a homemade short film to becoming a successful movie, just like what happened with "Night Swim."
- The Texas Chainsaw Massacre

Budget: $140.000
Box Office: $30.859.000
Iconic, cult classic, and one of the scariest movies of all time. Directed by a then-unknown Tobe Hooper, who worked as a teacher and cameraman, The Texas Chain Saw Massacre is one of the most successful independent films in history, despite its R rating (the director was hoping for a PG, haha) and its banning in some countries.
The film is currently part of a saga that already has 9 installments, but none of them are as good as the original.
- Babadook

Budget: $2.000.000
Box Office: $6.700.000
Before it became one of the first so-called "elevated horror" films and The Babadook became an LGBT icon, Jennifer Kent made a short film based on her idea, and used it to secure funding from the Australian government and through crowdfunding.
Fun fact: There's another Kent short film featuring the creature, a hilarious, barely minute-long homage to the Grinch called "Dook Stole Christmas."

In short, if you're an aspiring director who wants to break into Hollywood, one of the best ways is apparently to make a good short film that showcases what you can do, whether to use it as a portfolio or to try to make it go viral and catch the attention of James Wan, Raimi, or Del Toro.
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