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Blood and guts reigned supreme at the US box office this weekend as a low-budget, ultra-violent horror film generated $20.1m on its debut, outpacing bigger rivals such as King Kong, The Chronicles of Narnia and Munich.

Hostel’s popularity represents a remarkable return-on-investment for a venture that cost just $5m to make, and may point the way forward for Hollywood as it frets over a third consecutive year of declining ticket sales.

While the plot – a group of backpacking American college students visit a brothel in Slovakia, where they encounter not eastern European beauties but the buzz of chainsaws – has received mixed reviews, the film appears to have found a lucrative niche. Studios have been ramping up their horror production because the films can be made on shoe-string budgets and still arouse a core constituency of young, male fans.

Moreover, while it typically costs studios tens-of-millions of dollars to market a big-budget production to a wide audience, they can reach horror fans for a fraction of that, often over the internet. Such customers also tend to be voracious consumers of high-margin DVDs.

“Hostel plays to one of Lionsgate’s sweet spots – releasing some of the most provocative and disturbing genre pictures in the marketplace,” said Tom Ortenberg, the studio’s president of distribution. Lionsgate, which has become Hollywood’s biggest independent studio by focusing on overlooked niches, also scored big in October with the grizzly Saw 2, which reaped $31.2m in its Halloween release, and also took the top slot.

Horror films have come in and out of favour in Hollywood since the release of silent-era classics, such as Dracula. Hostel has been billed as the first of a new generation of intensely violent US horror films, following a recent trend in Japan and harkening back to the American “slasher” pictures of the 1980s.

Excitement had been brewing among fans after the surprise success three years ago of writer and director Eli Roth’s first film, Cabin Fever, about a mysterious flesh-eating virus. Hostel also enjoyed the imprimatur of director Quentin Tarantino, who served as executive producer.

Given the success of Hostel, it seems likely that Hollywood will feel compelled to increase the gore factor. Meanwhile, Wall Street appears to have noticed the genre’s money-making reliability. Last year Ryan Kava-naugh, a former venture capitalist, launched a new entity, Chiller Films, which sells interest in slates of horror films to hedge funds and other investors.

Copyright The Financial Times Limited 2017. All rights reserved.
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