Low-budget hit based on a viral video shows why Hollywood scouts YouTube for talent, ideas

What if Hollywood’s most profitable summer film came not from a comic book, a bestselling novel or a video game, but from a viral video on YouTube?

After the success of the tiny-budget horror film Lights Out, about a threatening creature that appears only in the dark, that scenario doesn’t seem so far-fetched.

The PG-13 film was based on a three-minute film from Sweden and made by a director no one had ever heard of. Yet the well reviewed film grossed about US$40 million in ticket sales in its first week of release in the US, roughly eight times what it cost to produce – an extraordinary return on investment. Naturally, a sequel is already in development.

Low-budget horror has long been a reliable profit centre for the film industry, with recent examples including The Purge: Election Year and The Conjuring 2 . But the success of Lights Out represents a potential watershed moment for studios looking at YouTube as a source of inexpensive, untapped talent and ideas.

“I don’t know of any precedent that’s better than this,” says Crash producer and UCLA film professor Tom Nunan of the film’s viral origins. “Lights Out is very fresh and very original, but it’s still in a genre that people love.”

And that may be just what the film business needs as it grapples with a summer box-office season that has produced a number of high-priced flops and disappointing sequels.