A Screaming Success Story


With top US studio executives losing their jobs, DVD sales falling, and the independent sector witnessing the collapse of it business model, Hollywood was in need of some good news this month.

That news has been delivered with the huge public response, measured at the box office and in online buzz, to a modest little horror flick called Paranormal Activity. This ultra low budget, unconventionally marketed film was rejected by the Sundance Film festival two years ago. Steven Spielberg championed the film within DreamWorks (who initially had a joint deal with Paramount) and was involved in re-editing it. DreamWorks planned to release it direct to DVD while mounting an expensive remake. The studio is no longer involved.

Since then the film has built quite a head of steam. If you believe the noise on the internet, Paranormal has been scaring the bejesus out of the kind of young audiences who like their kicks to be sadomasochistic. It has sold out midnight screenings in a small number of locations ahead of its national release in the US today.

Critics also seem to approve of the film. Time called it "an instructive artistic experience" that "follows a less-is-more strategy". Variety praised the direction of the previously unknown Oren Peli for "staying unnervingly ‘real’". 

The film, about a couple experiencing what appears to be a poltergeist in their home, was made for a sum that varies between US$10-14,000 — according to which source you choose to believe. (And really, you probably shouldn’t believe any of these figures, since no film really costs this little once the necessary post-production costs of editing, sound, music clearances and so on are factored in.)

But whatever the real budget, the film was clearly cheaply made using a video camera. It purports to be the "real" footage taken by the couple in the film in a bid to gather objective evidence of their plight.

Paramount eventually took hold of the rights and instead of going down the remake route opened the film in only a handful of US centres at the start of September. Viewers were told that if 1 million people voted on the official Paranormal Activity website that they wanted to see it, the studio would release it nationally. That million vote threshold was reached last weekend and Paramount’s national US rollout is underway.

But how did it manage to get so many film prints made at such short notice? The demand was clearly and obviously anticipated long before the million votes were registered. Greg Denning, who heads the film’s Australian distributor Icon Films (and isn’t in direct contact with Paramount), says the online request petition has been operating for weeks. His take is that as the box office numbers grew in limited release "they knew they had something and started booking expansion screens accordingly. Physically speaking, it’s nothing to print an extra 1000 prints within a few days in the US labs if you’re Paramount".

Both the production and marketing strategy clearly borrow from 1999’s The Blair Witch Project, which earned nearly US$250 million at the global box office. The difference is that now there’s YouTube and social networking sites like Facebook, Twitter and MySpace to speed up the fan-driven hype.

Another striking aspect to the marketing campaign is the trailer.

It’s the first I’ve ever seen to feature audience reactions — filmed at an early preview using infra-red footage in the dark — along with brief clips from the film. There’s no question that viewers at the screening depicted in the trailer were freaked out — either that or all the shots of folks yawning were edited out. As a marketing exercise, this is admirably original, low-cost and effective. At the time of writing, the trailer had been viewed more than 2.3 million times and accrued nearly 8000 comments.

There are plenty of online testimonials to the film’s alleged scariness, though the commentary is by no means all positive. Sample: "A person who knows horror movies will say this was not scary, it actually had more funny moments … was too repetitive … the last scene makes you jump, but then you’re angry after because the other hour and a half was crap and was boring in scenes and the ending is just an annoying cliff hanger that’s not a very good one. WAIT TILL DVD." But even this naysayer didn’t deny the film was frightening for general viewers less acquainted with the horror genre.

The true significance of the film’s unconventional success remains to be seen. In the meantime, the Hollywood system is broke. Marketing and production costs drastically need to come down. As independent producer Bill Mechanic, ex-head of Twentieth Century Fox, said in a speech two weeks ago, admissions are down over the past few years and "perhaps most troubling, the audience that Hollywood spends the majority of time focusing on, the under 25s, are the ones finding other things to do.

"While use of the internet and video games have dominated leisure time activities, movie consumption is down or flat over the same period," he added. There had been a 21 per cent drop in film going among the core target audience and a 24 per cent drop in the next key category, 25-39 year olds.

"If the audiences are shifting, why isn’t the product shifting as well?" Mechanic asked, challenging his audience to name five mainstream films this year that had successfully targeted an over-30 audience. "In that way, Hollywood in the broadest sense of the word is much like Detroit. It’s a manufacturer’s mentality that reigns, seemingly indifferent to the consumers it serves. Ignore whether the consumer likes our product as long as they buy it."

Paranormal Activity — to be released in Australia on 3 December after a campaign of free "word of mouth" screenings — is certainly not aimed at an older audience. It might turn out to be one of those freakish one-offs, an exception that proves the rule. But its success does one important thing: it shows that big profits can be made from listening to what the audience actually enjoys.

Studios spend millions creating artificial, temporary consumer "wants" that often collapse once the film is in cinemas. Audiences now communicate at lightning speed via social networking and SMS and are quick to react to what they dislike. Starting out small, using social networking to allow the fans to promote good news themselves, could be one revolution that benefits everyone. The question is how. The strategy that works for one small horror flick may not necessarily work for all.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.