‘Paranormal Activity’ makes an abnormal profit

Hollywood hasn't been this excited since the Oscars: the ultra-low-budget horror film Paranormal Activity, which has come from nowhere to become an industry sensation, has made a stunning $7.1m at the box office over its debut weekend in the United States. And the tale of demonic possession cost just $15,000 to make.

Paranormal Activity is being called the new Blair Witch Project - for its exceptionally low budget, for its hand-held, claustrophobic amateurville style, and for the manner of its breakthrough into the mainstream.

Just as BWP was marketed mainly online - back in 1999, its viral campaign was unique - Paranormal Activity began as an internet oddity, with the film's website inviting potential viewers to "demand" that the film was shown in their city. More than one million people have responded to the call.

The film is a godsend for Paramount Pictures, which, like all the Hollywood studios, is going through difficult times at present.

Paramount picked up the film, made by the unknown director Oren Peli, at the Slamdance Film Festival. Two weeks ago, with only an internet trailer behind it, the film opened at just 12 locations, where it was shown at special midnight screenings.

Such was the word-of-mouth that by Friday Paramount was able to put it into 155 US cinemas. "I've never seen anything like it," said Gitesh Pandya, of boxofficeguru.com. "This is a movie where a conventional release pattern would have flopped. They had to do something different."

Nikki Finke, founder of Deadline Hollywood, was equally impressed. "Even rival studios are salivating over the box office potential of Paranormal Activity," she wrote.

With Hallowe'en coming up in a fortnight's time, it seems there is no stopping the film. Finke quoted a studio executive as saying: "Look out... there's a freight train coming, and Paramount is going to make a ton of cash... Who knows where the ceiling is!"

While studio execs may be salivating, Hollywood stars and their agents, already under pressure in the current climate, will be watching the phenomenon anxiously.

The two actors who play the middle-class couple at the centre of the plot - Micah Sloat and Katie Featherstone - are unknown, unpaid and yet find themselves starring in one of Tinseltown's most profitable movies for years. ·