The 'Sharknado' Effect: Hollywood's Booming Shark Movie Economy

A scene from "Sharknado"

The surprise Syfy phenomenon is just the tip of the fin as producers rush to take a bite out of a growing market and MTV preps a pilot on suddenly hot B-movie house The Asylum.

This story first appeared in the Aug. 2 issue of The Hollywood Reporter magazine.

Thirty-eight years after Jaws spawned a movie franchise, sharks have become big business for Hollywood. Syfy's recent Sharknado broadcast might have brought intense Internet attention to the genre, but the campy horror film is just the tip of the fin. "There has been a surge in shark movies -- the concepts are getting more outrageous, and Sharknado is the pinnacle," says Paul Bales, partner for administration and operations at The Asylum, the Burbank-based studio behind Sharknado. "I don't know if Steven Spielberg would agree, but we started the shark movie trend with 2009's Mega Shark vs. Giant Octopus, which gave Syfy courage to up the ante on sharks."

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The size of the Shark Economy is difficult to measure. Discovery Channel's Shark Week premiere generated 21.4 million viewers ages 2 and up in 2012 (versus 18.6 million in 2011), and the network has high hopes for the next installment starting Aug. 4. "Sharks have great power and charisma, and there is still incredible mystery surrounding them," says Eileen O'Neill, president of Discovery and TLC.

For all the Internet chatter, Sharknado's actual ratings were fairly modest: 1.37 million viewers saw the original airing July 11. Its July 18 retelecast drew nearly 1.9 million viewers, a 38 percent increase. Still, the Sharknado phenomenon is projected to propel revenue for The Asylum from $5 million in 2009 to $19 million this year. A sequel is coming, and an MTV pilot in development about the company suddenly is hot. "It's at the script stage. It is horror but with comedy elements and the expected outrageousness of an Asylum production," says Bales. On July 27, Syfy will repeat Sharknado for the third time as part of an all-day Sharkathon that also features Roger Corman's Sharktopus, Swamp Shark and 2-Headed Shark Attack. In August, Syfy will air another original movie, Ghost Shark, whose protagonist can hunt "anywhere there is enough water or rain to sustain its phantom form." "We are seeing the demand growing, driven by social media," says Emilia Nuccio, president of international distribution at Echo Bridge Entertainment, which made Swamp Shark and Ghost Shark.

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Thanks to international presales and modest budgets, The Asylum never has lost money on its 10 or so shark movies. Budgets cap at $2 million -- though the average shark-opus budget is about $500,000. Profit margins are between 20 to 50 percent. David Rimawi, who oversees sales and distribution, says revenue from the average shark movie comes 25 percent from subscription VOD (Netflix); 30 to 40 percent from "straight up" VOD (Amazon); and another 30 to 40 percent from DVD. The company's films earn about 40 percent of their take abroad -- and growing.

"Markets that weren't interested in Sharknado suddenly contacted us -- Australia, New Zealand, the Caribbean," says Bale. "Now we know what celebrities feel like."