Paranormal Activity is most profitable film ever

Paranormal Activity, the US horror movie made on a shoestring, has become the most profitable film of all time. Shot for just $15,000, by October 28 the film had grossed $65.1m, making a return on investment - to date - of 433,900 per cent. It supplants The Blair Witch Project, which took a quarter of a billion dollars at the box office globally in 1999 off a production budget of $60,000.

The horror flick, which stars Micah Sloat and Katie Featherstone as a middle-class couple terrorised by a possible demonic presence in their new suburban house, has been promoted by a phenomenally successful guerrilla marketing campaign. A website was set up which invited interested parties to 'demand' that the film was shown in their city - the target of 1,000,000 demands was hit weeks ago.

Although directed and funded by unknown Oren Peli, Paramount Pictures took the plunge and picked up the movie at the Slamdance Film Festival. They launched the film in late September on 12 screens, but with the viral marketing going great guns this increased to 155 cinemas within a fortnight. After a stunning weekend which saw it take $7.1m, the film went nationwide, spreading to 1,945 locations last weekend, grossing $22m, with a further 455 added over the last seven days.

Now the film's distributors are turning their attentions worldwide, with a late November release date pencilled in for the UK. The film couldn't have come at a better time for Paramount, as it and the other major Hollywood studios continue to struggle with the recession and the new media landscape.

The job of promoting the movie fell to Don Harris, executive VP of distribution at Paramount, whose budget of around $10m - while 600 times the cost of the film - was small by modern standards. Harris oversaw the social-media initiative that saw the film plugged on Twitter and Facebook, and also held his nerve to keep the original numbers of screens the film could be seen at low.

"Everybody else thought we should be going faster than we were," Harris told TheWrap entertainment website. "But I thought we were doing a pretty good job of seeding the ground as we went. I don’t know that we would have done a lot more last weekend if we would have added a bunch of runs then."

The buzz around the film is expected to begin to decline now that it has firmly broken through into the mainstream, but as Harris notes: "For [Paramount parent company] Viacom, this movie is probably more important than one that does $300m or $400m" as it shows the industry a new modus operandi. ·