Jason Blum-backed Crypt TV thinks the next Freddy Krueger will be launched on mobile phones

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Blumhouse-backed digital-media company Crypt TV is trying to build out a stable of horror franchises on Facebook.
But the company is much less focused on hoping Facebook pays off in advertising revenue.
Instead, Crypt TV is licensing original shows to digital-media distributors and selling merchandise.
"If you make good stuff, the business will come," Jason Blum said.

Clowns are having a big year, and not just Pennywise from the monster hit movie "It." Giggles the Clown is having a moment.

The character, which combines a chilling smile and a girl-power sensibility, has been appearing in a series of popular Facebook Live videos over the past several months as well as live fan gatherings. Giggle's merchandise has found its way to 200 Spencer's stores. The character recently made a paid appeared at a scary amusement park and Facebook recently featured a Giggle's face filter that even found its way onto the 'Today" show on NBC.

Giggles is a breakout character for Crypt TV, a horror media company aimed at the social and mobile generation. The company, backed by the red-hot horror-production firm Blumhouse and prominent media investor Ken Lerer (a backer of BuzzFeed and HuffPost), has shifted gears over the past year as Facebook's algorithm and business priorities have changed.

Launched in 2015, just as Facebook was becoming a big outlet for video, Crypt TV initially focused on making short, one-off, hopefully viral clips for Facebook. One of its early hits was "6-second scares," a series of short films that are both funny and macabre.

But earlier this year, Crypt TV secured more funding, right around the time that Facebook pushed publishers to make longer, TV-esque video — clips that would be bankrolled by mid-roll video ads.

That was what many publishers, who were waiting — and arguably are still waiting — for a big Facebook video-ad windfall. But instead Crypt TV pushed toward trying to build out a stable of recurring characters — a universe, if you will — while focusing on finding ways to make money beyond advertising.

"We think the next Frankenstein, the next Freddy Kreuger is going to come from the phone," said Crypt TV's 26-year old founder Jack Davis. "We're trying to build our own monster universe."

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So far, the universe includes Giggles, who first appeared last October on Facebook Live. She immediately clicked with fans, and now has her own Facebook page with over 300,000 followers.

Davis said that Giggle's appeal lies in the idea that her teen fans feel like they know her — she'll respond in character during Facebook Live chats, for example.

But Crypt TV is also trying to build out more traditional horror franchises, including "Sunny Family Cult," a show about a very creepy family which debuted earlier this year at the Tribeca Film festival, and "The Birch," a supernatural favorite of Jason Blum — who runs Blumhouse ("Get Out," "The Purge").

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You might be surprised that horror-movie fans, who still consistently show up at the box office, would be looking for this kind of content on their phones. But Blum isn't.

"I think this is really the people that produce content finally catching up to consumers and accepting that this is where people want to watch stuff," he said.

Not that he isn't thinking bigger.

"Crypt can be somewhat of an incubator platform for turning one of these videos into a TV show or movie," Blum told Business Insider. "When you have existing IP you are 10 steps ahead when launching a movie."

Before Crypt TV graduates to green-lighting big-screen hits, the company has focused on licensing content to digital outlets such as Verizon's Go90 and the youth-oriented media company Fullscreen.

Crypt TV has sold traditional ads for movies like "It" and the latest in the "Saw" franchise. But the focus has been making money off of Facebook, including a growing number of merchandise deals like Sunny Family Cult masks and the official Crypt TV digital store.

"We didn't want to just to grow and sell ads," Davis said. "We're trying to build an identity. And you have to embrace the storytelling formats in mobile and social."

Blum said that Crypt is much better off focusing on making fans happy at this point in its development.

"People get too focused early on, on monetizing while they're building an audience," he said. "That's not as important to me. The less time you worry about that the better. There are more and more outlets.

"If you make good stuff, the business will come."