SHANGHAI • A Hollywood producer known for profitable low-budget horror films is looking to break into China and score yet another screaming success.

It is partnering a former Wall Street executive whose movie company is partly backed by Tencent Holdings, the country's largest social-media and gaming firm.

Blumhouse Productions has agreed to co-develop and co-produce Chinese-language horror and thriller films with Tang Media Partners, founded by Mr Donald Tang, former vice-chairman of investment banking firm Bear Stearns.

The companies made the announcement on Monday during the Shanghai International Film Festival, but did not disclose any financial terms.

Producer Jason Blum and Mr Tang are betting on horror films in a market where censorship prohibits many of the genre's staples, including ghosts, the supernatural, gushing blood and over-the-top violence.

The pay-off for hit films that do get the green light from China's authorities can be large and the country's box-office sales total is expected to surpass that in America as the world's biggest by 2020.

"The film market in China is super-exciting because it is exploding," Blum said.

"The market for genre movies, thrillers and scary movies is super underdeveloped.

"I think they are not very quality movies and kind of are afterthoughts. If we can make quality genre movies, there's an opportunity for a tonne of growth."

One strong signal came in April when acclaimed spooky thriller A Quiet Place opened in China and eventually netted US$33.7 million (S$45.5 million) in theatres.

Blum, whose recent work includes Oscar best picture nominee Get Out (2017), shrugged off censorship constraints.

"There are a lot of ways where you can scare people without ghosts," he said, adding that he is excited about working with the different "creative parameters".

The partnership's first project is tentatively titled American Nightmare and will be shot in Los Angeles for distribution in China.

The script is in development and the companies are aiming for a release next year, said Mr Tang.

Tang Media Partners, founded in 2015, acquired Open Road Films, distributor of Academy Award winner Spotlight (2015), almost a year ago, after snapping up international film sales and distribution company IM Global a year earlier.

Blum's 2007 thriller Paranormal Activity is one of the most profitable horror films made, earning US$193 million in the global box office.

It was a frighteningly good return from a movie that cost only US$15,000 to make.

BLOOMBERG