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Selling Fear for Fun and Profit

Rob Reuteman, |Special to CNBC.com
Friday, 21 Oct 2011 | 4:06 PM ET

Whether you took in a screening of "Scream 4" this year, visited a haunted house this month, or bought a zombie Halloween costume, you’re a customer in the “business of fear.”

Neve Campbell in Scream 4.
Dimension Films
Neve Campbell in Scream 4.

Yes, people continue to pay good money to get scared out of their wits.

Broaden the customer base to include extreme sports enthusiasts. Mix in sedate readers of Stephen King, Anne Rice, or Charlaine Harris, and you’re talking about tens of millions of Americans plunking down billions of dollars annually.

“A lot of people like to be scared,” says Paul Dergarabedian, a Hollywood.combox-office analyst. “It’s one of the most basic emotions people have.”

In the mid-1980s, Temple University psychologist Frank Farley coined the term “Type T” to define a thrill-seeking personality.

"These thrill-seekers thrive on the uncertainty associated with activities that most people would consider scary,” says Farley. “The ‘fear business’ usually offers us a cocktail of thrills, excitement, intensity, and challenge. It represents departures from the baselines of our lives.”

Farley estimates Type T personalities represent 10 percent to 30 percent of the global population.

“America to some extent is a Type-T nation," says Farley. "I see the risk-taking quality at a deep level in this country. After all, we’re founded by fearless risk-taking types."

Rest assured, whatever the behavior, business is there cater to it. Here are some examples.

Halloween

Seven of 10 Americans — 161 million people — plan to celebrate Halloween this year, spending an average of $72.31 on decorations, costumes and candy, according to a National Retail Federation survey.

Once you tally spending for parties, visits to a haunted house, pumpkin carving — even pet costumes — total Halloween spending is expected to reach $6.86 billion, tops for a non gift-giving holiday.

Per-person spending on Halloween has increased every year but one since 2004, when the average was $41, said Kathy Grannis, NRF’s director of media relations.

“There’s a large belief that it’s become so popular because it’s no longer seen as a children’s holiday,” says Grannis. “Fifteen years ago, the adult costume selection was very limited, often just a black plastic trash bag.”

This year, more will be spent on adult costumes($1.2 billion) than children's costumes ($1 billion), with pet costumes taking in another $310 million.

An entire Halloween industry has been built on people’s enjoyment of fear.

“Festivities run the gamut,” says Grannis. “Costume parties at bars and theme parks now start on Oct. 1.”

Haunted Houses

Nearly 23 percent of Americans — 37 million people — celebrating Halloween this year will visit a haunted house in October, according to the NRF.

Those numbers will translate into ticket sales worth more than $360 million, says Leonard Pickel, editor of Haunted Attraction magazine. In addition, he says an estimated $150 million was spent this year on building and refurbishing haunted venues, which now number between 3,000 and 5,000.

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Some houses will take in more than 50,000 attendees, paying $20 or more a ticket during an average 20 days of operation in October, says Pickel.

Haunted house operators even hold an annual convention, HAUNTcon, which features several days of workshops designed to help attendees learn new makeup techniques, prop and set building, advertising and marketing, and actor training, as well as other tips to make their attractions more successful.

This year’s tradeshow, held in early May in Monroesville, Pa., brought more than 40 exhibitors, including Gore Galore, the Hot Wire Foam Factory, Rotting Flesh Radio and Fright Props.

Film and Television

The domestic box office take for horror films in the past three years has been about $1.5 billion, according to an analysis done for CNBC by Hollywood.com, which tracks the entertainment industry.

Horror movies are popular with film makers because they typically don’t cost much to make and enjoy a built-in audience, offering the potential for stellar profits. Horror movies consistently have the most films in the top 20 for return on investment and the least in the lowest 20 ROI, according to web site The Numbers.

Best exemplifying this business model is the 2007 hit "Paranormal Activity," which was made for $15,000 but grossed nearly $162 million. As with most current horror films, there have been two sequels, so far.

For the movie-going public, horror films can offer gut-wrenching fear in a safe setting.

“The promise of thrills, of controlled scares, and the sense of engaging in mildly transgressive behavior certainly explains why some movie watchers gravitate to scary movies,” says film historian Richard Nowell from Charles University in Prague.

“People can vicariously exorcise their own demons," adds Hollywood.com’s Dergarabedian. "In the safety of your own home or theater, you can visualize something you’d never live through in your life or want to.”

Television has been cashing in on the horror genre in recent years, especially with programs about vampires. HBO’s "True Blood" is the network’s biggest hit since "The Sopranos," with 5 million regular viewers. At an average price of $40, more than 1.4 million DVDs of "True Blood: The Complete First Season" were sold. The show just finished its third season.

Since the three-film "Twilight" franchise began a little more than two years ago, vampire films have brought in $7 billion, according to the Hollywood Reporter.

Books

Most experts track the current vampire trend back to the 2005 publication date of stay-at-home-mom-turned-author Stephenie Meyers’ "Twilight" series.

Vampires have always been fascinating to people, but "Twilight" put them on another level, took it into the mainstream,” says Hollywood.com’s Dergarabedian.

Charitable Zombies

The ensuing series of books has sold more than 100 million copies, according to the publisher.

Last year, eight of Amazon.com’stop 10 best-selling fantasy books were about vampires. Fully half of the books on the Barnes and Noble Best Selling Fantasy Books list were about vampires.

Meyer’s vampy counterpart, Charlaine Harris, has sold more than 8 million copies of her 10-book Sookie Stackhouse series that spawned the "True Blood" TV show.

Vampire author Anne Rice wrote 12 vampire novels, starting with 1976's "Interview With The Vampire" (later a film with Tom Cruise and Brad Pitt).

Before that, according to The Hollywood Reporter, about 1,000 vampire titles had been published. Since then, more than 41,000 vampire titles have been published.

The all-time king of horror authors, however, is Stephen King, who has sold more than 350 million copies of his 49 scary novels.

Zombie Walks

Ever since horror film director George Romero spawned the zombie craze in 1968 with his cult film, "Night of the Living Dead," the movement seems to get a little bigger each year.

According to NRF’s 2011 Top Costumes survey, more than 2.6 million men, women, and children plan to dress as zombies this Halloween. For adults, zombie costumes jumped this year from seventh to fourth on the list of most popular.

Why so trendy? More Romero films and a hit cable TV show, "The Walking Dead," helped.

By popular definition, zombies are corpses risen from the dead in vast numbers by some supernatural force, usually for some evil purpose.

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“Zombies tap into a lot of different elements of our psyche,” says Hollywoood.com’s Dergarabedian. “People wonder what happens to souls when they die. People relate to it.”

In large numbers, apparently. Since 2001, groups around the world have successfully promoted zombie walks, in which thousands of participants dress up as zombies, shuffle and lurch along city streets together, for fun and, increasingly, for charity.

In 2008, a Zombie Fest in Pittsburgh gathered more than 2,000 pounds of food for the hungry. In Detroit, World Zombie Day Walk Against Hunger has gathered more than 8,000 pounds of food and 18,000 in the past four years. In Manchester, U.K., and Dublin, Ireland, thousands of zombies raised money to fight cancer.

It just goes to show, even the horror business has a heart.

Consumer Nation