‘Paranormal Activity’s’ message to Hollywood: Risk-taking still works

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Everyone in Hollywood is abuzz over ‘Paranormal Activity.’ And why not? When it comes to favorite movie biz story lines, nothing makes industryites happier than seeing an arrogant big shot fail or an unknown underdog succeed. And you couldn’t cast an underdog movie better than ‘Paranormal Activity,’ an intensely scary thriller that just won the weekend box office derby, making roughly $22 million and easily trouncing Lionsgate’s sixth entry in its enormously successful ‘Saw’ horror franchise.

In a town populated by long-shot dreamers, who couldn’t love a film that was made for $15,000 by a bunch of unknowns with a hand-held video camera? It only made the film more appealing that it was turned down by every studio and indie distributor in town, even getting a thumbs-down from the Sundance Film Festival. The only bite the filmmakers ever got was from DreamWorks, which was interested in the remake rights for the movie. When DreamWorks had a test screening for the film, the screening went so well that the remake angle was abandoned with the hopes of releasing the original thriller.

Nothing much happened until after DreamWorks and Paramount parted company and veteran DreamWorks exec Adam Goodman ended up at head of production at Paramount. Believing the film had a visceral, ‘Blair Witch’-style appeal, Goodman made room for ‘Paranormal Activity’ on his release slate this fall. (See my colleague John Horn’s story for a full account of the film’s topsy-turvy history.) The film got a window of opportunity in large part because Paramount didn’t have the money to release ‘Shutter Island,’ a costly Martin Scorsese thriller that would have required the customary $30-million to $40-million studio marketing push to blast off into the multiplexes.

But ‘Paranormal Activity’ was such an under-the radar project that it could be launched on the cheap, through viral Web buzz and inexpensive midnight screenings. Even now, with Paramount having expanded its release to 1,945 screens over the weekend, the studio only had to make a $10-million investment in marketing the picture. After this weekend’s amazing performance, box-office prognosticators say the film could end up making more than $100 million.

What does the success of ‘Paranormal Activity’ tell us? First off, it’s yet another reminder for cynical studio execs that audiences are not simply sequel zombies, only willing to patronize the latest installment of a familiar, easily accessible franchise. Moviegoers still crave fresh, new, exciting ideas, even if they come in a primitive, low-budget package.

But this is also an intriguing example about corporate risk-taking. ‘Paranormal Activity’ was available on the free market, yet all of the most established studios in town took a pass. It was Paramount, a studio seemingly in constant upheaval, having recently axed a number of top executives, which was most open to rolling the dice. It’s an age-old story in Hollywood -- if you have ‘Harry Potter’ or ‘Spider-Man’ or ‘Pirates of the Caribbean,’ you’re less likely to make a long-shot bet. It’s a studio like Paramount, about to lose its wildly successful Marvel franchises to Disney, which is most open to making an audacious gamble.

And ‘Paranormal Activity’ is definitely a risk that has paid off. Big time.

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