Paranormal Activity: How a film made on $10,000 becomes No 1 at box office and $90 million revenue

With what are considered to be small budget films costing hundreds of thousands, imagine a film made by a 39-year-old video games designer for only $10,000 that has stormed to No 1 at the American box office. The very scary but not gory horror movie  Paranormal Activity, made by Oren Peli with a crew of three, a Sony video camera and two actors (Katie Featherston and Micah Sloat were paid $500 for their services),has stormed to the No 1 position at the American box office for a $90 million payday. Peli began his movie three years ago with Blair Witch in mind, conceiving of the film, like its predecessor, as a pile of footage made by the mysteriously disappeared Katie and Micah, and ultimately discovered by the police. Once the filming and editing  on Peli’s home PC was completed, the movie began a three-year journey to screen, before producer Jason Blum (The Reader), who was sent it on DVD watched it in his living room. He says according to The Times Online:

He started laughing at himself for being so scared. He knew, nonetheless, that he was on to a winner. “I had run the acquisitions department for Miramax in 1999,” he says. “And I didn’t buy Blair Witch. I wasn’t going to let it happen again.”

Blum jumped on board Paranormal Activity, becoming the movie’s official producer. He touted it around Hollywood, eventually getting a copy to Steven Spielberg. The latter, famously, was deeply upset by the movie, and even more so by the fact that things started to go bump in his Pacific Palisades home directly after seeing it — an empty bedroom suddenly became locked from the inside. He returned the disc in a black plastic sack, believing it to have, well, a malign influence (“That story is 100 per cent true!” Blum says, excitedly). Spielberg nonetheless began championing the movie, and even suggested to Peli a new tighter ending, which he adopted.

Aside from the creative way the film was shot, its success can also be attributed to its savvy marketing scheme. Since its makers were left with no budget for advertising they set up a series of midnight screenings in college towns, and the positive feedback generated by that creepy early exposure created a groundswell for follow-up screenings in other places.  Once Paramount, the studio that decided to release the movie got involved, they directed fans to a “demand it” website (www.eventful.com/demand). Film fans from all over America could demand, with a single click, that the movie come to their local cinema. If the area received enough clicks, the movie would play there.  The rest is history, the film went viral and was eventually fully released.