'Paranormal Activity' scares up box-office delight

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Fueled by rave word-of-mouth reviews and clever marketing, micro-budget horror film "Paranormal Activity" has taken the box office by storm to become one of the year's most unlikely hits.

Following in the footsteps of 1999's "The Blair Witch Project," director Oren Peli's acclaimed film -- made for just 11,000 dollars -- has already earned 37 million dollars in North America alone.

Like "Blair Witch," "Paranormal Activity" is simple but effective. Spooked by things that go bump in the night, a young couple in suburban California decide to leave a camera on at their bedside to record supernatural goings on.

"It's an unbelievable phenomenon," said Jeff Bock, an analyst with box office tracker Exhibitor Relations. Remarkably, the hit movie has had to wait to reach the big screen, having been filmed as long ago as 2006.

Initially snapped up by Steven Spielberg's Dreamworks, "Paranormal Activity" was eventually released by Paramount after the two studios split in 2008.

Bock meanwhile said Paramount's decision to postpone the release of Martin Scorsese's latest film "Shutter Island" from October 2009 to February next year had worked in favor of "Paranormal Activity."

"They could focus all their attention on this very small film," Bock said.

Paramount's marketing campaign for the film was built around word-of-mouth and Internet buzz following a handful of screenings at select festivals.

Amy Powell, senior vice president of interactive marketing at Paramount, said executives had taken the decision to allow fans to "be an important voice in dictating where the film would be released."

"We have been able to galvanize the community online to actually drive the release strategy and the film has been released as a result of the fans support," Powell said, saying social networking sites had helped create buzz.

"We decided that if we hit a million demands, we would open the movie nationwide and we hit a million demand in only four days. The reason it went so fast is because of the social media tools that we used: Facebook, Twitter."

Powell described comparisons to "Blair Witch" as "wonderful." "That movie was 10 years ago and there was an entirely different set of tools available at that time to market a movie," she said.

"We are the lucky benefactors of all the innovations that happened online."

Stuart Ford, chief executive of IM Global distributors, said he had been convinced the film would be a hit after watching it for the first time in 2007.

"I didn't imagine that it would become such a phenomenon. What I did know was that there was something unique, and scary about it," Ford said.

"And that's why I took it on, not because I was convinced it would be a huge theatrical box-office success, but it definitely had something different."

Ford sold worldwide rights to the film in just 48 hours, something he described as "pretty much unheard of."

"We recruited 250 teenagers here in Los Angeles, and let the distributors watch the film in a movie theater with its target audience," Ford said.

"And it was that reaction of the audience that convinced distributors to buy the film in the next 48 hours."

The appeal of the film is simple, Ford said. "'Paranormal Activity' is just a really scary film," he said. "'Blair Witch' really did its business largely based on notoriety. The exit polls, 50 percent of the audience came out and said, 'I'm not sure what is the film about,' or 'It wasn't that scary, really.'

"If you look at the exit poll on 'Paranormal', it's the opposite, it's 95 percent of the people saying 'Okay, now I know what the hype was about, it was really scary.'"