Over the last decade Jason Blum and his Blumhouse Productions have quickly and not-so-quietly emerged as a major Hollywood powerhouse. Blum’s success is due to a very lucrative low-budget business model which has attracted high-caliber talent and resulted in a slew of box office hits and successful franchises like Paranormal Activity, The Purge and Insidious.

With Insidious: Chapter 3 hitting screens on Friday, Playboy sat down with Blum for a conversation about the specifics of his business: Why he loves the horror genre more than any other, what he’s learned along the way (which includes making daily mistakes) and what other genres deserve the Blumhouse treatment.

I read that you were unsure of the Specs and Tucker characters when you screened the first Insidious.
I was. Where did you read that?

It was in an interview. But what I loved about that is you openly said: “I was wrong.”
I was wrong.

Are there other instances along the way with Blumhouse where you’ve been wrong?
Every day, are you kidding? I’m wrong so much. I thought making Paranormal Activity PG-13 was actually kind of a good idea. I was totally wrong about that. I have been wrong about things on every single movie, I just have to think about it.

You’ve been quoted as saying that your business model “allows people to do weird stuff.” In what way?
Well, we make low budget movies and we really stick to low budget. Everybody talks about how profitable movies are and it’s terrific they are profitable but that’s not why we do low budget movies. We do low budget movies because what we look for when we take on a [project] is, “Does it feel different and new?” And that’s [not] very Hollywood. “Does it feel like this movie?” That’s how studios make decisions. “These four movies have made a lot of money so let’s make one like those.” We do the opposite. We look for scripts that don’t remind us of other movies but that feel new. If we were making expensive movies that would be crazy. I understand why studios do what they do but we’re able to do what we do because we make movies for not a lot of money — so if they don’t come out exactly as we hoped we can make our money back and go onto the next thing.

What is the “weird” thing that [writer/director/star] Leigh Whannel is able to do on Insidious 3?
I think most scary movies are kind of relentlessly scary, in a good way, but I think Insidious is fun. There is a lot of humor and a lot of Specs and Tucker — which I was wrong about — and I actually think that is in the DNA of Insidious and why it resonates. What’s great about it is you sit back and relax and start to laugh and then you’re scared and I think that makes the scares even scarier because your defenses are down. I think what James [Wan, who directed the first two films] and Leigh — particularly Leigh because he has a great sense of humor — have been really good at doing is infusing fun and humor into a very scary franchise.

What’s the best pitch you’ve said “no” to?
The movie that got away that kills me the most is The Conjuring. I didn’t have the chance to do it but I really wish that I had. Drives me crazy that we didn’t make that; I wish that we had.

What do you think the big studios should do differently when it comes to horror?
There is a lot of cynicism around horror movies from studios because it’s like, “Oh, we can make money with those.” I think the audience can tell when people who don’t love horror have engineered a horror movie. I think fans, whether or not they articulate it or not, they can tell. There’s a difference between a horror movie that feels like it’s reaching in their pocket to grab $12 or it’s made by people who really love scary movies. I think if there’s a mistake around making horror movies it’s to make horror movies without the people who really love horror. If you’re giving notes on horror and you don’t like horror, don’t give notes — just let the director do what he wants to do. Choose a director who likes horror and let ‘em go. Unless you love horror too, keep your mouth closed.

Has doing what you’re doing made you appreciate the genre more?
Oh my God, totally different. What I’ve learned, I’ve always liked horror movies but I wasn’t a fan like Quentin [Tarantino] or Eli [Roth], who can sit through 12 horror movies in a row. I loved all different kinds of movies, but having done horror movies for the last eight or nine years, I now like horror better than any other kind of movie and it’s because of the people who make them. Horror fans, we are outcasts and we’re kind of made fun of and as a result it makes the community very close. When we finish one of our movies we invite directors from all of Blumhouse’s movies to watch and help each other. With a real desire to make the movies work and help the movies succeed. It’s much less competitive than other genres and I love the camaraderie that’s in the horror community in Hollywood.

I feel like the culture around horror movies is terrific and the culture around other genres is really painful.

Does the social media conversation ever concern you? People react in such heated ways; does it ever detract from the experience of releasing a film?
I think it’s because people are passionate. It’s not nice to be mean but there’s a difference between being mean and saying “I hated this because…” and I think that’s fine, I think it’s good to express that. Not to be mean to a creator, but everyone is allowed to have an opinion and if they don’t like stuff they should talk about it, I think that’s healthy.

As a low-budget producer, how do you take care of cast and crew?
We do all the movies union now so they all get residuals. We had [worked] non-union a long time ago and we would give all the people an interest in the [proceeds] of the movie but we don’t do that anymore. We’re Union, so that’s how we take care of the crew.

How do you woo movie stars to come make a low-budget film?
The cast gets bonuses which are tied to their quotes [what they get paid]. What you don’t get is if you’ve never made more than scale, you’re not going to get more than scale in one of our movies. But if you make six or seven-figure sums then you will make six or seven-figure sums on our movies. J-Lo just did a movie for us for nothing and she’ll get paid. Ethan [Hawke] did really well with us, Patrick [Wilson], Rose [Byrne]; all these people have done really well for us. They now like it because most of our movies shoot in LA and they get to work at home. They’re very short shoots, 20-25 days, and only the director is telling them how they have to wear their hair or sweater, there aren’t 10 people talking about it. We just had John Travolta in a western we did with Ethan Hawke called Valley of Violence. Now, it’s smooth. It used to be tricky because no one ever believed they’d get paid but as soon as we gave people checks it got a lot easier.

What was the first movie you saw that truly scared you?
Friday the 13th. Terrified me. I was too young, I should never have seen it when I saw it, it scared me too much. I must have been 10 or 11 years old, very young. Too young.

Is there another genre that is ripe for the Blumhouse treatment? You mentioned western.
We have Jem and the Holograms, we did our Sundance version of a horror movie in Whiplash; I’d like to figure out an action movie. It’s hard because action is inherently expensive but if there’s a way to do an old school '70s kind of action movie in a low-budget way… We haven’t figured it out yet, but I’d like to try.

Kara Warner is a writer/reporter living in Los Angeles. Likes: Men in kilts, ladies in power suits, the Denver Broncos. Dislikes: Plastic surgery frozen faces on Bravo, losing, zombies.