Author: Trafficblast

Peli’s inspiration to make the film came from hearing strange noises at night when he moved into his new house. While he didn’t think the house was actually haunted, he told Chris Jones in 2010 it gave him the “idea of what if someone did think their house was haunted and wanted to prove or disprove it, so they set up a video camera.”

The movie was actually shot in 2006, three years before it would eventually be released. It was filmed in just seven days, in Peli’s own San Diego home, and cost a mere $15,000 to make. Peli paid for the movie himself and simply took a week off work to get it done. He didn’t even tell his neighbors he was making a film in his house.

The naturalistic performances in the movie are down to the fact that there wasn’t a traditional script and the actors were mostly improvising from a basic outline. Peli explained, “The treatment was like: a couple goes to sleep, such and such happens and then they investigate. As we were getting closer, I refined it more and as we were shooting it was really brought to life by the actors.”

Ahead of filming, Peli made a series of changes that would help his house look more interesting in the film, such as switching the carpets for hardwood floors, painting the walls, and replacing the stairs. He subsequently stated that while he didn’t include these in budget as they were planned improvements, “the hardwood floors alone cost more than the whole film.”

The movie didn’t have a title for a long time, but the filmmakers had to finally pick one when they started submitting it to film festivals in 2007. Peli admitted that he didn’t even like “Paranormal Activity” that much, but at least “it didn’t suck and it’s dry and accurate.”

Peli submitted the movie to a number of major film festivals, including the Toronto International Film Festival, but it failed to be accepted by any. Only one festival accepted it–the much smaller Screamfest in Los Angeles. But the reaction it got from audiences and critics there was enough to get the Peli noticed by major talent agency CAA, who subsequently sent out DVDs of the movie to interest a studio in buying it.

Paranormal Activity was the first big success for producer Jason Blum, whose Blumhouse Productions has gone on to become one of the biggest companies in horror, making such hits as The Purge, Get Out, and the most recent Halloween movie. Blum was working at Miramax when he saw the first cut of the movie on DVD, and was impressed enough to come on board as a producer, helping Peli re-edit the movie and eventually score a deal with DreamWorks, the studio co-founded by Steven Spielberg and owned by Paramount.

We almost never even got to see this version of Paranormal Activity. After Paramount purchased it, the studio wanted Peli to entirely remake it with a higher budget. Peli and Blum agreed, but asked for a test screening, knowing how well the original version might play to an audience. They were right–the audience response quickly convinced the studio that there would be no need to make it a second time.

There are in fact three endings to the movie. Peli’s original version, which was screened at film festivals, ended with Katie being shot by police as she emerged from her bedroom holding a knife. When the movie was bought by Paramount, two new endings were shot. In the one that became the “official” ending, Micah is killed by being hurled across the room by some unseen force, and Katie turns into a snarling demon. In the third ending, which was never released as part of the movie but can be found as a DVD and Blu-ray extra, Katie kills Micah offscreen and then cuts her own throat in front of the camera.

The huge success of Paranormal Activity makes it one of the most profitable films of all time, in terms of a percentage return on investments. The final budget was more than the initial amount that Peli paid to make it–Paramount paid $350,000 for the rights, and additional post-production and new shooting added an additional $215,000. Nevertheless, with a worldwide box office of $193 million, there’s no denying what an incredible investment it was for everyone involved.