Now Blog Post by Eric Sherman – on Paranormal Activity

Here’s Eric Sherman’s analysis of the Paranormal Activity phenomenon, and a light at the end of the tunnel for us indie filmmakers… now, and perhaps going forward, indie films have the greatest return on investment! The giants have crashed their economies with payola and huge sums of money.

Now that the corporate lawyers and bean counters have taken over the major film studios, and stopped making quality stuff… it’s our turn; it’s our time! Let’s go make some movies!


According to Daily Variety’s most profitable films (as measured NOT by total box office returns, but by rate-of-return on investment), the winners annually are almost always low-budget independently produced movies that are picked up by distributors after they’ve been finished.

Here’s a list of such films (compiled by a blogger):

(Note that the following revenue numbers do not include DVD sales or other ancillary revenue.)

1. Paranormal Activity (Budget: $15,000; Revenue: $193 million): 645,801.51%

2. Tarnation (Budget: $218; Revenue: $1.1 million): 266,416.97%

3. Mad Max (Budget: $200,000; Revenue $99.7 million): 24,837.50%

4. Super Size Me (Budget: $65,000; Revenue: $29,529,368): 22,614.90%

5. The Blair Witch Project (Budget: $600,000; Revenue: $248 million): 20,591.67%

6. Night of the Living Dead (Budget:$114,000; Revenue: $30 million): 13,057.89%

7. Rocky (Budget: $1 million; Revenue: $225 million): 11,150.00%

8. Halloween (Budget: $325,000; Revenue: $70 million): 10,669.23%

9. American Graffiti: (Budget: $777,000; Revenue: $140 million): 8,909.01%

10. Once (Budget: $150,000; Revenue: $18 million): 6,232.39%

11. The Stewardesses (Budget: $200,000; Revenue: $25 million): 6,150.00%

12. Napoleon Dynamite (Budget: $400,000; Revenue: $46 million): 5,667.62%

13. Friday the 13th (Budget: $550,000; Revenue: $59,7 million): 5,332.24%

14. Open Water (Budget: $500,000; Revenue: $52,100,882): 5,110.09%

15. Gone with the Wind (Budget: $3.9 million; Revenue: $390 million): 4,906.73%

16. The Birth of a Nation (Budget: $110,000; Revenue: $11,000,000): 4,900.00%

17. The Big Parade (Budget: $245,000; Revenue: $22 million): 4,389.80%

18. Saw (Budget: $1.2 million; Revenue: $103 million): 4,195.68%

19. Primer (Budget: $7,000; Revenue: $565,846): 3,941.76%

20. The Evil Dead (Budget: $375,000; Revenue: $29,400,000): 3,820.00%

Soon to join this list is the sequel (or, in fact, prequel) to #1 above: Paranormal Activity #2. Its budget is listed as $3 million, and total worldwide boxoffice as of 29 Nov 10 is $164 million. Rate of return is, thus, already in the thousands-of-percents.

The phenomenon that interests me is the amount of return that is possible for a low-budget movie, IF it is providing something that people want to see.

The key value is “integrity” (def: all elements working together toward a single purpose). I saw both PARANORMALs (and, yes, a third one is on its way), and was struck by the audience agreement that they wanted to be scared…and were!

The commitment of the maker (Oren Peli, an Israeli) is evident in every shot, edit, performance.

He never leaves his basic theme and style: “found footage,” “home movie,” almost “cinema vérité.” The ring of reality echoes through every moment. This style is so appropriate to the theme–that bizarre realities exist just behind the surface “order” of daily life.

Due to this integration of all elements, the audience can anticipate the next shock, which never comes exactly when you expect, but close enough to provide the build-up, and then release, of tension.

My definition of a “good movie” is: one which contains the proper balance between satisfying and defying audience expectation.. PARANORMAL ACTIVITY does exactly this–first, the title sets up an unusual set of expectations; second, many people wonder if there ARE phenomena that happen outside the daily grind; third, in a “ghost” or “horror” film, one anticipates, indeed hopes for, surprises, even shocks; both PARANORMALs provides absolute stunners, but not horrific, more mental.

This set of factors causes PARANORMAL to deliver in abundance, as measured by the many many repeat ticket buyers. (I recall the immense success of SIXTH SENSE–people went again and again to see if they would still be fooled!)

Part 2, still in theatres, had a budget of $3 million (as opposed to the $15,000 rumored for Part 1), yet stays absolutely true to the form evolved during Part 1. Mr Peli and associates had the wisdom to stay within their known territory (thus avoiding the mistakes made by the BLAIR WITCH 2 folk, who overspent, thus losing the sense of reality engendered in their original).

If you sift through the web entries, you’ll also find that Mr. Peli utilized the internet in a pioneering fashion to build his audience. He created a truly interactive experience, and allowed the viewers and potential viewers to “contribute” to the success of the pictures.

So, my main point is: if you’ve got a story to tell, tell it. Ensure that the images are consistent with the theme. Make sure the story is real to you, and transfer that reality from your own mind and creative spirit directly as possible to the screen. Do not reach out to try to please the audience. Most makers have trust in their own vision.

Mr. Peli has, once again, proved that people will flock to see movies that they want to, regardless of the presence of stars, costly visual effects, or bombastic music scores.