The Asylum takes a film idea, a budget of “well under a million dollars”, and turns it into a film in under 2 months! They release movies exclusively on a “straight to video” basis, starring actors no one has ever heard of. Yet they are one of the most profitable film companies going.

Their unique low budget, low risk, fast turnover business model has created a film producing machine that Hollywood can’t replicate.

Cutting costs and reducing risk to produce low, but easily repeatable, profit margins is not a new business concept. Supermarkets have been doing it for decades. However, it takes a different mindset to make it work it in an established marketplace.

Here we will look at 5 of the ways The Asylum applies different ways of thinking to its business model.

1. Don’t Get Bogged Down in Perfectionism

If you watch Sharknado, or any film produced by The Asylum, you will know they are low budget and not of the highest quality. The scripts are clunky, they star are nobodies, and their approach to CGI is very much along the lines of “That will do”.

In a 2009 interview, The Asylum producer Jack Perez revealed the following facts about typical from the The Asylum;

• They take a film from idea to release in 2 months.
• The budget is “well under a million dollars” for each film.
• Filming takes just 12 days to complete.

Yet, it is impossible to find any reports of any of their 300+ films making a loss. In an interview, The Asylum producer David Rimawi revealed a typical from The Asylum took just 3 months to break even.

With such limited time and money, The Asylum can’t afford to make their films perfect and nor do they attempt to. They focus on making acceptable quality films that their fans enjoy.

Their business model has been compared to that of the porn industry. They make films as cheap and quick as possible and ten rely on lots of small amounts of profit to roll in. The profit margins are not huge, but they are risk-free and come from a process that can be repeated indefinitely.

It’s the opposite approach to the high-end studios. They spend high budgets, to make the best possible films, to generate the highest potential profits. But it is also a high-risk approach. There is no guaranty a high budget will result in a big profit (the recent Cats film is a prime example of this — The film cost $125-$150 to make and made a loss of $50-$100).

If The Asylum shifted towards the Hollywood model their production times and costs would increase dramatically. Their risk-free, lower profit margins would vanish and be replaced with higher-risks, and slightly higher potential profits. Would the extra effort, money, and risk really produce a greater return over the longer term?

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