The Found-Footage Effect: How Far Can the "Paranormal Activity" Franchise Go?

In 2009, Oren Peli's low-budget, "found-footage" thriller Paranormal Activity came out of nowhere to gross more than $100 million domestically at the box office. Not bad for a first-time filmmaker who made a $15,000 movie in his house in San Diego with two friends and sold it to Paramount for $350,000. Then if things couldn't get any better, a year later, Paranormal Activity 2 earned more than $40 million in its first weekend, making it the highest opening ever for a horror film. With Paranormal Activity 3 coming out this weekend, the question now for Peli and his team of DIY nightmare makers is: Can Paranormal become a perennial horror franchise?

"One step at a time," Peli says coyly when asked.

It's a typical answer from the Israeli-born videogame programmer turned filmmaker who has become known in the industry for his M. Night Shyamalan-like secrecy when it comes to his projects. However, glancing into the inner workings of the Paranormal Activity films — which chronicle from their own home movies the scary supernatural happenings that occur to the family of two sisters — "one step at a time" is hardly how Peli and his team proceed. In fact, their success is predicated on thinking steps ahead and working in an extremely unconventional manner, even from within the studio system.

Katie and her young sister Kristi supply the creepiness for Paranormal Activity 3.
Paramount Pictures
Katie and her young sister Kristi supply the creepiness for Paranormal Activity 3.

Found-footage storytelling — which these days most often consists of creating a fictitious story using footage shot with handheld cameras, unknown actors, and a clever backstory to give the impression that what is being shown is real — has grown in popularity in the past few decades, with filmmakers using the style to bring a sense of authenticity to films about everything from school shootings (Zero Day) to the aftermath of September 11 (The September Tapes). But where it has thrived is in the horror genre, and no film better exemplifies this than the subgenre's landmark, The Blair Witch Project, which grossed more than $140 million in the United States in 1999. Problem is, once you fool the audience with "found" footage the first time, it's hard to fool them twice. Book of Shadows: Blair Witch 2 was a critical and box-office failure.

Aware of this, Peli and Paramount Pictures, which has released all the Paranormal Activity films, are attempting to lure viewers into suspending their disbelief by making 2 and 3 as bare bones and realistic as the first one, despite their ability to spend more money.

"When we were test-screening the first one," Peli recalls, "the [Paramount] executives asked people in the focus groups why they were affected by the movie, and the answer they got back was always 'because it felt real.' So we are fanatical about making sure that everything looks authentic."

This led Peli (who since directing the first film has taken on a producer role while also being the grand arbiter of PA's mythology) and his team to not only stick to the found-footage aesthetic for Paranormal Activity 2 but also to develop a set of rules, including no traditional shooting schedule and no structured script (though screenwriters are credited, including Disturbia scribe Christopher B. Landon, who cowrote PA2 and has sole credit for PA3).

For Tod Williams, who took over directing duties for Paranormal Activity 2 after making a traditional family drama, The Door in the Floor, this style of filmmaking was invigorating. "The fact that we had a release date but had no clear idea of what the movie was going to be, that we were going to work with unknowns, experiment and invent a new way to make a movie at a studio, and that everyone thought we were doomed to fail and be the next Blair Witch 2, that was superexciting to me," he says.

In fact, when Williams signed on in late March 2010, the only thing the Paranormal team could tell him for certain was that the film would be a prequel and that it would focus on Kristi (Sprague Grayden), the sister of Katie (Katie Featherston), who was the subject of the first film.

"The whole idea of 'Can you make a sequel to a found-footage movie?' was hanging over us," says Jason Blum, who has produced all the Paranormal films. "Oren, me, Paramount — we all had to learn how to produce these movies." Not to mention the first-world problem of how to maintain the original's feel on a much larger budget. (Although the success of the first film did inspire Paramount to create a microbudget arm, Insurge, which was founded to produce $100K-budget films, none of the PAs have actually come out of that ministudio. The budget for both PA2 and PA3 has been around $3 million each, according to Peli and Blum.)

Resembling a workshop class more than a studio shoot, production on PA2 took place in a house at an undisclosed location in Southern California for five months. Everything from story ideas to what kind of scares could be pulled off were pitched on-site and then shot, assembled in the editing room for critique, and reshot right up to the film's October release date.

"The standard lines of Hollywood authority I threw out the window," says Williams about the production. "The entire thing was very, very collaborative." Some of the ideas that made the cut: Paramount head Adam Goodman suggested a scene in which the automatic pool cleaner jumps out of the water; one of the most famous scenes, when the kitchen cabinets all suddenly open, was first floated by a practical-effects company.

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