How Low-Budget Movies Are Outperforming Hollywood's Biggest Bets


Two of the biggest box office films of 2026 so far were neither made by established studio heads nor based on franchise intellectual property.

“Obsession” and “Backrooms” (horror films by Internet-native 20-something directors) have outperformed much more expensive studio releases.

The runaway success of these films has ignited a debate throughout Hollywood about what made them so popular, especially among Gen Z moviegoers who haven't flocked to theaters in recent years. Here's what you should know:

the numbers

“Obsession” was directed by Curry Barker, 26, who got his start on YouTube with comedy sketches and horror shorts. Released on May 15 by Focus Features, the film was made for just $750,000, but upon its release it grossed a staggering $17 million and has improved upon its debut every weekend since.

“Obsession” set an all-time horror record by being the fourth-biggest weekend for a film at the domestic box office, grossing $25.4 million. It now ranks as the fifth most popular film of the year, close to $200 million domestically and roughly $295 million worldwide, ahead of Pixar's “Hoppers” ($166 million) and Paramount's “Scream 7” ($121 million), according to Box Office Mojo.

“Backrooms,” by 21-year-old Kane Parsons, known on YouTube as Kane Pixels, drew on an online fascination with liminal spaces, guiding audiences through an endless series of nearly indistinguishable rooms.

Released on May 29 by A24 (known for such acclaimed films as “Moonlight” and Everything Everywhere All at Once”) with a reported budget of $10 million, it opened with $81 million and surpassed $100 million in less than a week.

In two and a half weeks, it had surpassed all theatrical releases of the horror films “Five Nights at Freddy's 2,” “Smile” and “Scream 7.” It ranks as the eighth highest-grossing film of 2026.

Who is watching?

The public is young. In recent weeks, nearly 90% of “Backrooms” viewers were under 35, and more than half were under 25. During “Obsession’s” opening weekends, 75% of the audience was between 17 and 34, which is significant at a time when major studios have struggled to consistently get younger viewers into multiplexes.

Why is it working?

Audiences have clearly latched onto the stories, said Jason Blum of Blumhouse-Atomic Monster, who worked on both films.

“There's been kind of an audience waiting to come back to movie theaters, and we in Hollywood haven't really figured out what would make them come back,” he told the Times in an interview this week.

Blum, who revolutionized the horror genre with the “Paranormal Activity” franchise, links the success of “Backrooms” and “Obsession” to a connection to the directors' origins.

Because the films were made by creators who talk to younger viewers on YouTube daily, he said, that generation “feels like they're being spoken to.”

FranchiseRe analyst David Gross described it as a new source of talent and material. Creators can gain a large following at a very low price, he said, and their stories arrive more fleshed out, speeding up the development and discovery process. He called Internet-based storytelling “another additional source of film material.” Blum added that the films' success could make studios more willing to take a chance on unknown directors who “may not have been considered” before.

Rosie Ramirez, marketing director for Galaxy Theatres, said a young, first-generation audience tends to generate buzz. More than a month after “Obsession” premiered, he said, the chain's four Nevada locations are just now seeing a second wave of moviegoers curious about the buzz.

Notably, the rise of these two films has unfolded in the shadow of major releases like Disney's “Star Wars: The Mandalorian and Grogu” and Mattel's “Masters of the Universe,” both of which delivered disappointing numbers in their respective opening weekends.

Is it a trend or an anomaly?

It's unclear whether this marks lasting change or a fluke. May surpassed $1 billion at the box office, with “Backrooms” and “Obsession” doing much of the heavy lifting. Despite the improvement, the box office has not yet fully returned to pre-pandemic levels, and the summer is about 3.5% behind the summer of 2019, Comscore's Paul Dergarabedian said.

And Dergarabedian questioned how the industry could replicate a success that, in his words, was “authentically and organically created” rather than manufactured: “It just happened,” he said.

Ramirez argued that the broader summer slate — franchises like “Toy Story 5” along with some original surprises — points to a healthy box office anyway, a reminder that “it doesn't always have to be the big summer blockbuster.”

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