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Marketplace Scratch Pad

Scary things

Scott Jagow Oct 26, 2009

If the economy isn’t enough to keep you up nights, maybe you should see Paranormal Activity, this week’s top-grossing movie at the box office. Apparently, it’s the perfect recession film — made for nothin’, marketed for nothin’ and scary enough to make people forget they don’t have a job.

Tonight on Marketplace, we’ll be looking at the economics behind this kind of film. Here’s some background from Advertising Age:

The $15,000 horror movie, directed by San Diego filmmaker Oren Peli, first gained a cult following over a year ago after screening at the 2008 Slamdance Film Festival, eventually catching the attention of Steven Spielberg. The blockbuster director initially wanted to direct a big-budget remake of the film, using the original cut as a DVD extra, but instead brought the film to Paramount/DreamWorks, where it took on a new life of its own.

Had Spielberg done a big-budget remake, we wouldn’t be having this conversation. It would just be another run-of-the-mill studio horror film, and in a year when horror is popular in Hollywood (because it’s cheap to make), there’d be nothing to talk about.

Instead, Paramount wisely chose to buy the film for $300,000 and market it by word of mouth, using social media. More from Ad Age:

Fans across the country could demand — literally, it turns out, by hitting a “Demand” button on its website — that the movie screen in their area. That, in turn, determined which markets Paramount would select for a series of midnight screenings — all achieved by using a bare minimum of select TV spots featuring reaction shots from Hollywood screenings and a smattering of online and radio ads.

As it’s gone nationwide, Paranormal Activity has netted $62 million. I’d say that’s a pretty spectacular ROI.

In case you haven’t heard about the movie, it takes place entirely in a couple’s home. They set up a camera to record what happens in the house when they go to sleep. They suspect poltergeists are coming out of the TV or something. Clearly, it has a Blair Witch Project quality to it, but Paramount did two things differently here — they didn’t beat people over the head with the marketing, and they didn’t pretend the footage in the movie was real.

The rave reviews have poured in, but not everyone is on board. Here’s an interesting comment from a review on Seattle PI:

Three years ago, before Bushonomics and Merry Mortgaging finally toasted our banking system, it was plausible that a full-time student and a day trader with resources could live quite well in San Diego in a three-bedroom house with hardwood floors and a swimming pool, and that this luxurious place could be called a “starter” home.

If you view this film as a commentary on our economic decline, with a persistent, omnipresent yet invisible demon (global economic reality) called forth by charming, willfully ignorant people who couldn’t care less what toll their lifestyle is taking on the world at large, then it’s terrifying. From any other vantage point, it’s a well-edited, well-acted, low budget film with two or three genuinely scary scenes and a fabulous ad campaign.

It sounds like exactly what you’d expect in this day and age — YouTube on the big screen.

Not that there’s anything wrong with that…

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