Top 12 Film Industry Stories of 2009:
#3: Paranormal Activity Scares Up Some Dough

By David Mumpower

January 2, 2010

Listen. Do you smell something?

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My last car purchase had a price tag of $24,000. I find myself thinking about this as I consider the capital expenditure/revenue achievement of Paranormal Activity. Only two years after creation of this feature, its genesis is already shrouded in mystery and misinformation. Depending on who is to be believed, the cost to create this low-budget horror movie was either $11,500 or $15,000. That's why I keep going back to the cost of an automobile and find myself shaking my head in amazement. For somewhere between 48% and 63% of the cost of a Honda Accord, Oren Peli was able to write and direct a movie that has earned $107.7 million domestically. If you ever meet anyone who claims they knew this would happen, they are either lying or have no idea how box office behavior works.

How Paranormal Activity came to be a Paramount Pictures release is a fascinating tale in and of itself. The film debuted at the Screamfest Horror Festival in 2007 with promotional DVDs made available to anyone who wanted them. I must confess that a staff member at BOP offered me one in early 2008 and I failed to show the inclination to watch it. Yes, I feel like a moron for that decision. Of course, I wasn't the only one. Despite numerous efforts to get it exhibited, the Sundance Film Festival passed on the opportunity.


The story of Paranormal Activity easily could have ended then if not for DreamWorks employee named Ashley Brooks. She was understandably impressed by the high quality of what was effectively a home video disguised as a feature film. She showed it to her boss who showed it to his boss and before the cycle was complete, Steven Spielberg wound up possession of a copy. At this point, the story takes a turn for The Ring as Spielberg perhaps jokingly claimed that a lot of unexplainable events happened in his home that evening after he watched the film. No matter how apocryphal that may be, the end result is that Paranormal Activity was now being championed by Steven Spielberg, all but guaranteeing it would be released in some form. The only question was whether it would be a re-make or released in its current form. After a test screening in Santa Monica caused a lot of jaded movie fans to flee the building in terror (not a joke), the easy choice was to start creating an online campaign to build up buzz for the existing movie - the low-budget horror film that could.

1999's box office campaign contained the most comparable film to Paranormal Activity, The Blair Witch Project. That release also featured low budget, grainy video and also broke the $100 million barrier domestically, finishing with just over $140 million. Also, it too skipped over the process of paying actors to act scared and instead placed virtual unknowns in an uncomfortable setting. Then, the filmmakers proceeded to scare the crap out of them. In fact, the leads in Paranormal Activity claim that they responded to an ad on Craigslist and were paid a whopping $500 each. I don't have a comparison chart or anything but my gut instinct is that Internet porn stars make more than that per "feature".

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