B-Movie Boom: Sharknado Studio Stirs Whirlwind of Profit

B-Movie Boom: Sharknado Studio Stirs Whirlwind of Profit

B-Movie Boom: Sharknado Studio Stirs Whirlwind of Profit

The cheesy Syfy channel thriller Sharknado drummed up something besides 387,000 social media mentions last week: The studio behind the movie reports that *Sharknado'*s buzz put the afterburners on DVD sales and licensing deals, helping to fuel a near quadrupling of revenue from three years ago.

The Burbank-based studio, The Asylum, was generating $5 million per year in annual revenue in 2009, when WIRED profiled the maker of unashamedly cheesy, low-budget, impulse-watch movies in a magazine feature. Sales continued at roughly that rate in 2010, COO Paul Bales tells us, before beginning a steady ascent that has The Asylum on track for an estimated $19 million in revenue this year, roughly a third of that profit.

That growth over the past four years was driven in part by the studio expanding its television distribution beyond Syfy channel to the women-focused network Lifetime, for whom it has developed such movies as “Adopting Terror” and “Born Bad.”

It is also working on a comedy series with MTV Networks related to the studio’s own history, and in January, it announced a joint venture with Creative Coalition to solicit, select, and fund a promising but unrealized passion project from a film professional, a high-cost endeavor that could prove to be The Asylum’s most ambitious outing yet.

Along the way, The Asylum has upped its production pace from one movie per month to two. It has also diversified its distribution. Whereas most of the studio’s money once came from video rental stores, its bread and butter is now selling through cable video-on-demand channels, supplemented with a growing television and nascent digital distribution business. The new channels have brought new tricks, like using names that get titles to the top of alphabetically-sorted video-on-demand queues, e.g. “100 Degress Below Zero,” a disaster movie, and #holdyourbreath, a horror film that The Asylum placed in a small number of AMC theaters in order to garner still better placement in the video-on-demand queues, which punish straight-to-video movies.

“Things are going very well – and this Sharknado stuff has been icing on top of all that,” says Bales.

Sharnado, a Syfy channel movie about a tornado that flings sharks from the ocean into Los Angeles, briefly dominated Twitter late last week and generated a flurry of giddy media coverage in advance of airing. Ratings, in comparison, were seen as something of a letdown, but Bales says the show set records among the youngest viewers, who Syfy is trying to attract, and helped spur other sources of revenue, including The Asylum’s first-ever overture for a contract to sell secondary merchandise like t-shirts.

“A major retailer was not going to take the movie, and the day after the premier they ordered three times the number of DVDs they normally take for a movie,” Bales says. “Europe does not share an affinity for creature movies that we have in the U.S. and Asia and so we were having some trouble selling this title in Europe. After the premiere, we sold it all over the place.”

As with other Asylum movies, Sharknado might not make for good art, but it’s proving excellent for business.

Image courtesy The Asylum