California expanded support for independent films through its latest tax credit awards, while Obsession added more box-office records as Warner Bros., Amblin Entertainment, and Amazon MGM Studios competed for rights to the next viral horror creators.
California Backs Independent Productions Through Tax Credit Program
The California Governor’s office announced the final batch of projects approved under the California Film and Television Tax Credit Program 4.0, closing out the program’s first full fiscal year, which ran from July 1, 2025, to the end of June.
The $750 million expansion of Governor Gavin Newsom’s tax credit program funded 170 projects during the fiscal year. Of the final 41 approved projects, 35 are independent productions, with 30 carrying budgets below $10 million. Many of those productions are also confirmed to be filming outside California’s traditional studio zone.
Under the program, independent films with budgets of at least $1 million qualify for tax credits by spending on eligible below-the-line expenses in California, including local crew wages, set construction and equipment rentals.
Costs such as actor salaries and producer fees are excluded. The credit applies to the first $20 million in qualified spending, allowing many independent productions to offset a significant portion of their production costs.
Among the latest recipients is Gingerbread Men, a film in production at Ben Affleck and Matt Damon’s Artists Equity. The project received $7 million in tax credits, with Affleck confirming the approval and noting that Gingerbread Men is the third Artists Equity production to participate in the program.
Obsession Continues Record-Breaking Box Office Run
The latest tax credit awards follow an exceptional year for independent films at the box office, led by Curry Barker’s Obsession.
After increasing its box office totals in each of its first four weekends, the horror film surpassed Downton Abbey to become Focus Features’ highest-grossing film of all time. It also went on to break The Blair Witch Project’s 27-year record as the highest-grossing festival acquisition in history.
By its sixth weekend, Obsession had crossed $300 million worldwide, representing a 400x return on its reported $750,000 production budget.
The film later overtook Ryan Coogler’s Oscar-winning Sinners as the highest-grossing live-action English-language original film of the 2020s. The records didn’t end there. Obsession beat Bruce Lee’s Enter the Dragon as the highest-grossing film ever produced on a budget below $1 million, unadjusted for inflation.
The film has now reached $407 million worldwide despite competing alongside Disney’s The Mandalorian & Grogu, Warner Bros.’ Supergirl, and Steven Spielberg’s Disclosure Day, all of which have experienced steeper week-on-week declines.
Hollywood Studios Look for the Next Breakout Indie Hit
The success of Obsession and Kane Parsons’ Backrooms is already influencing development decisions across Hollywood.
Veteran producer Roy Lee acknowledged the industry’s response in a statement suggesting that big bosses are demanding more “Parsons” from their lower executives.
Lee is currently producing Warner Bros.’ feature adaptation of the internet horror phenomenon Siren Head.
The studio secured the rights following a five-studio bidding war in which a theatrical release was a non-negotiable condition. Created by Trevor Henderson in 2018, Siren Head has generated more than 3 billion TikTok views, 1 billion YouTube views and millions of Roblox plays.
Brian Duffield is attached to direct and co-write the film with Zach Cregger, who also serves as a producer alongside Lee, Andrew Childs and Scott Glassgold. Henderson is executive producing.
That same week, Steven Spielberg’s Amblin Entertainment, Scott Stuber’s United Artists and Amazon MGM Studios secured the rights to The Mandela Catalogue after winning a bidding war involving 10 other studios.
Series creator Alex Kister, who launched the analog horror series on YouTube in 2021 at the age of 17, will direct the adaptation from a screenplay he co-wrote with Tyler Clifton. The series has accumulated millions of views and is widely regarded as one of the defining titles in the analog horror genre.
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