Cover Story

A Shocking Hit

''Paranormal Activity'' -- How the low-budget horror film became a box office smash

It's time for Katie Featherston to scream. No big deal — she got plenty of practice while making Paranormal Activity, in which she plays a woman tormented by a supernatural houseguest. So what's another yelp on this October afternoon in a Manhattan photo studio? Lying in bed with her costar Micah Sloat, Featherston looks straight into the camera and lets out a perfect blood-curdler that rings throughout the entire loft space — and much of the building. Within seconds, the doors of the studio across the hall fling open. Out pop two people, their faces ashen with terror.

Fortunately, everybody can remain calm. Nobody's being murdered or terrorized. In fact, life in the Paranormal Activity universe is pretty fantastic. In its first weekend of wide release, the itty-bitty horror flick — made for just $11,000 in writer-director Oren Peli's house in San Diego — slayed Saw VI for the top spot, boosting its total haul to $62 million. The killer weekend furthered comparisons to that other groundbreaking, low-budget scary movie, The Blair Witch Project, and cemented Paranormal's status as a box office phenomenon. ''It's pretty exciting,'' says Peli, who celebrated the triumph with ''a plain cheeseburger and a Jack and Coke'' on the set of his next film, Area 51, in Utah. ''I would have been happy with just a strong performance, regardless of where Saw ended up. I still would have been stoked!'' At the photo shoot, Featherston, 27, was just processing all the news. ''On Saturday, my mom was like, 'Katie, you're number one!''' she says. ''And I was like, 'No, not yet, just one step at a time.' Then Sunday, Oren e-mailed the newest numbers and...,'' she trails off. ''I gotta tell you, everything that has been happening? I could not be more excited and thankful, but it doesn't feel real.'' That's understandable. A year ago, nobody was sure Paranormal Activity would make it into theaters at all. ''There were a lot of ups and downs,'' says Sloat, 28. ''The movie got lost for a long time.''

The journey began in 2006, when the Israeli-born Peli, then a videogame programmer, started hearing strange noises in his San Diego home. ''I'm not saying there was a ghost, but I couldn't logically explain what was going on,'' he says. ''The technogeek side of me said, Well, what if I set up video cameras and made [scary] stuff happen? That could make an interesting movie.'' He sketched a plot: A young couple film themselves sleeping at night to figure out what's causing freaky disturbances. The woman is deeply shaken and worried about ticking off some evil entity. The man is a bit macho, daring the thing to come out and fight.

Peli ponied up $11,000 of his own money to get Paranormal off the ground, then held an open casting call in Los Angeles, where he found Featherston and Sloat, unknowns with minimal experience. ''I went in, sat down, and Oren said, 'Why do you think your house is haunted?''' says Featherston. ''There was no 'Hey, how are you? Can I have your head shot?' So I just started talking. I went with it. And that's kind of how the whole process was.''

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