The scary untold truth of Paranormal Activity

The Blair Witch Project might have set the initial bar for ultra low-budget horror, but 2009's Paranormal Activity ran with it. Then it just kept running.

It's a simple pitch: a found-footage horror film featuring stationary, security-style cameras and some handheld work, set out to chronicle a "real life" haunting. It almost felt voyeuristic in a way, watching this footage of other people sleeping … at least until the scary stuff starts happening.

The inconceivably low budget horror flick used its rickety style as a badge of honor, which managed to positively terrify audiences the world over as you really had to wonder: What's happening in my house while I'm asleep? 

The idea for the film came about because of a squeaky floor

Talk about humble beginnings. Though Paranormal Activity is high concept in its unique simplicity, director Oren Peli actually came up with the idea after being a little freaked out by the household noises in his new home. You know the ones: squeaky floors, the foundation settling, rattles in the walls. Peli started to wonder what might happen if those bizarre sounds were more than just routine creaks, and in that moment the germ of Paranormal Activity was born. Here's how he explained the genesis to Newsweek: "I don't think it was anything supernatural. A lot of it was natural stuff like the house settling, but that's what got me thinking: what goes on when you're asleep?"

Before Paranormal Activity, the director had never worked on a movie, much less made one

To call director Oren Peli a first-time filmmaker is an understatement. Peli had never filmed a movie before putting Paranormal Activity together, nor even worked on a film set. He liked to watch movies, so he figured why not make one? Peli spent most of his budget (which totaled just a few thousand bucks) to buy the necessary camera equipment, and taught himself how to do all the required editing and effects work on his own. Luckily he was a software engineer, so that helped, but he still had to learn all the film stuff on the run.

He told Moviefone: "I've always been very comfortable with computers and software, so one thing that's made my life easier is the fact that I was very quickly able to figure out how to edit the movie, how to do the audio mixing, and the CGI that's in the movie. So in that aspect my background definitely helped me with the technical aspects, just being very comfortable working with the camera equipment…it all came very natural to me."

Steven Spielberg picked out the ending

Sure, Paranormal Activity might have been a micro-indie film, but that doesn't mean one of the biggest names in Hollywood didn't have a hand in the production. The movie was already finished, but before releasing it, Steven Spielberg's studio wanted a better ending. The original cut ended with Katie just rocking back and forth in the bedroom floor for hours (holding a knife), and when police find her the next morning, they shoot her after a door slams and startles one of the officers.

After Spielberg watched that original cut of the film, he recommended the finale most fans are familiar with: the one that's a bit more exciting, with Katie throwing Micah's body at the camera and taking on a demonic look as she knocks over the camera. They ended up shooting several endings along the way, but Spielberg liked the demonic face the most, so they heeded his judgment and the rest is history.

They almost remade the entire movie with a bigger budget

The original version of Paranormal Activity was shot for basically nothing with off-the-shelf equipment, featuring no-name actors. So when DreamWorks originally picked it up, the plan was to remake it with a bit more studio sheen. The studio viewed Peli's original version of the film as a proof of concept, if anything. But as part of the contract, The Los Angeles Times reports Peli and producer Jason Blum required the studio to hold at least one test screening of the original cut before pulling the trigger on the remake. The idea was, essentially, to give it one Hail Mary chance before remaking the film.

It was looking like a total trainwreck once the test screening ramped up, and some viewers started walking out of the theatre midway through the film. The filmmakers feared it was because the movie was so bad, but no—it was because the audience was getting too scared. The studio's production chief Adam Goodman said he thought the screening was "one of the worst previews [he'd] ever been a part of," until the exit interviews showed the attendees were terrified, not bored.

It took two years to get distribution, and was rejected from Sundance

Paranormal Activity would go on to be a monster hit, but it didn't happen right away. Since Peli didn't have any Hollywood connections or experience (he'd never made a movie, remember?), he headed to the film festival circuit and started shopping Paranormal Activity and trying to build some buzz. One place it didn't make the cut? The Sundance Film Festival, though it did land a slot at Slamdance along with several other smaller and mid-tier fests. It took more than two years for Peli to finally get major distribution. Despite the setbacks, the director never gave up, and all those smaller screenings finally generated enough interest for him to land a deal with DreamWorks.

They kept the actors away from the premiere, so people might wonder if they were really dead

Peli has never been shy about drawing inspiration from The Blair Witch Project's lo-fi approach to horror, and he also borrowed a few pages from that film's marketing playbook. Typically, actors and filmmakers attend premieres and screenings of their films to build buzz for the project, but that wasn't the case for Paranormal Activity. Instead, Peli kept stars Katie Featherston and Micah Sloat (and himself!) away from the premiere, in the hopes that it might help generate some extra mystery. Peli told the Los Angeles Times he made the decision because "The less people know about Paranormal Activity, the more they enjoy it. I don't think there's anything to be gained by putting the filmmakers and the cast in front."

It's the most profitable film ever made, with a 414,233 percent return on investment

There are hits, and then there are hits. The Blair Witch Project held the title for most profitable film (when compared to initial investment) for several years thanks to its budget of around $60,000. But when Peli's paltry $15,000 film became a box office hit, it blew the Witch out of the water. Then out of the stratosphere.

By doing some basic return on investment math, The Wrap noted the first few weeks of Paranormal Activity's release set the film at a mind-boggling 433,900 percent return on investment. So how do the numbers stack up when you total the film's $193 million worldwide haul? It now lands at around a 1.28 million percent return on investment from the initial $15,000 expense for Peli to shoot the film. That's more than double the return on investment for The Blair Witch Project, and unless another ultra-micro-budget film does gangbusters, it's hard to imagine Paranormal Activity ever being dethroned.

They shot it in one week at the director's own house, edited down from 70 hours of footage

Peli truly embraced the do-it-yourself spirit when he made Paranormal Activity. He decided to use his own home as the backdrop for the story because it was free (though he did make a few home improvement upgrades to spruce things up for the camera beforehand), and shot the film in just a week. Newsweek notes he filmed pretty much everything across a seven-day period. From there, he tackled a massive 70-hour pile of footage on his own and eventually chopped it down to a manageable 86-minute movie. That first-time editing gig was made even tougher by the fact that Paranormal Activity was largely shot out of order, due to the extremely tight shooting schedule.

Steven Spielberg thought his copy of the DVD was haunted (seriously)

Steven Spielberg made a major impact by helping Peli choose the best ending for the theatrical release of Paranormal Activity, but he also had his own ghost story in regards to the film. In an interview with Moviefone, Peli confirmed reports that Spielberg had a supernatural experience the night he took a DVD of the film home to screen. As the story goes, Spielberg's bedroom door somehow wound up locked from the inside, and coupled with the freakiness of the movie, it wigged out the legendary director. He was so creeped out, Spielberg reportedly put the DVD in a trash bag when he returned the movie the next day so he wouldn't have to touch it. Peli said the rumors about Spielberg's experience are true as far as he knows, and not something concocted by the marketing department.

The film didn't actually have a script

Drawing a bit of inspiration from The Blair Witch Project, Peli didn't actually have a script in place when he got his tiny crew together to shoot Paranormal Activity. He really wanted the dialogue to feel "real," so he instead provided the actors with topics they should discuss in scenes, then let them ad lib from there. It worked pretty well, obviously, but it was still a risky move. The director told Shock Till You Drop about the decision: "All they knew is they were going to do something about a haunted house and basically discovered everything as they were shooting. There were no lines for them to follow. Everything was spontaneous."

Was Survivor runner-up Katie Gallagher supposed to be the star?

Peli went with unknown actors mostly because they were cheaper than better-known stars, but he almost went with a mildly familiar face for the female starring role. According to a widely circulated (and unfortunately unsourced) rumor, Peli was reportedly close to casting Katie Gallagher, a runner-up on CBS's long-running Survivor reality series, in the lead role—but eventually balked because he worried the reality TV star would be a bit too recognizable and pull audiences out of the illusion. Of course, Peli ultimately hired Katie Featherston to play the lead role of Katie. Strange they were both named Katie, right?

Despite making Paranormal Activity, horror movies really freak out the director

You might think a guy who makes one of the most successful horror films is history is a connoisseur of the genre. But in the case of Peli, you'd be wrong. Though he's gone on to terrify millions with the Paranormal Activity franchise, Peli was actually not a big fan of the horror genre growing up. The director told The Guardian he watched The Exorcist when he was 11 years old and it "totally freaked [him] out" so badly he avoided scary movies for more than a decade. He was so terrified by horror films, he even avoided Ghostbusters as a teenager, just because he could't risk seeing the frights. Needless to say, he's come a long way.

The film spawned its own parallel sequel in Japan

When the studio realized it had a bona fide hit on its hands, plans ramped up almost immediately for a sequel. These movies were cheap and made a ton of money, so why not? Paranormal Activity would go on to spawn half a dozen follow-ups and spinoffs, but there's one that stands out as a curious black sheep among the franchise: Tokyo Night. At around the same time an "in-canon" sequel was being put together for U.S. release, the studio licensed the franchise out for a "parallel sequel" for release in Japan. The film isn't a remake of the original, or a Japanese version of the actual Paranormal Activity 2. Instead the story followed a Japanese student who brings the spirit back to Tokyo following a trip to San Diego. The story technically takes place after the events of the original film, though it's not actually set within the main continuity that continued through the (sanctioned) Paranormal Activity 2, Paranormal Activity 3-4, The Marked Ones, and Ghost Dimension.