Paramount Pictures Chairman Brad Grey had an unusual message for an industry in which taking credit for the latest hit is standard practice.
"Evidently we have a situation where you put one foot in front of the other every day at the studio," he said on a conference call with his senior executive team Sunday. "We all work very hard, and every once in a while you find yourself bumping over a miracle."
Whatever savvy went into distribution and marketing -- and there was certainly plenty of it -- Paramount indeed has a miracle on its hands with "Paranormal Activity," a movie produced for $15,000 and acquired for $300,000 that vanquished four new pictures with combined production budgets of more than $155 million to finish No. 1 at the box office this weekend.
As "Paranormal" sold a studio-estimated $22 million worth of tickets on its fifth weekend, Lionsgate's sixth entry in its annual "Saw" franchise, which has been a reliable cash cow for the independent studio since 2004, opened to a surprisingly weak $14.8 million.
Three other new movies -- "Amelia," "Astro Boy" and "Cirque du Freak: The Vampire's Assistant" -- all flopped, with debuts at or below $7 million, driving total box-office receipts down 9% from the same weekend a year ago, according to Hollywood.com.
Paramount debuted "Paranormal Activity" in a dozen college towns where it played only midnight shows more than four weeks ago and slowly expanded the horror flick until it was playing at 1,945 locations nationwide this weekend. It has grossed a total of $62.5 million so far and, with a further expansion planned for Friday, is expected to end up with ticket sales of more than $100 million.
Even including marketing costs of a little less than $10 million, it will end up as the studio's most profitable film since Grey took over in 2005.
That's a much-needed boost for Paramount, which, despite recent hits such as "Transformers: Revenge of the Fallen" and "Star Trek," found itself in a precarious enough financial situation that it delayed the Martin Scorsese-Leonardo DiCaprio thriller "Shutter Island" from October to February to meet its profitability target for this year.
"The lesson that is startling is that our industry can foster entertaining product at any price point," Grey said of the unexpected hit. "I am particularly proud of the fact that we have a team with the ability to find innovative ways to distribute and market 'Paranormal' and at the same time has the ability to push a global effort like 'Transformers.' "
Though capturing lightning in a bottle twice can be difficult, Grey said that Paramount is considering producing a sequel to "Paranormal Activity," for which it would have worldwide rights. The current film has been sold to a variety of international distributors by IM Global and starts playing overseas Friday.
Going into the weekend, studio executives who closely follow pre-release polling had expected that "Paranormal" would compete closely with "Saw VI" for the No. 1 spot. The former movie's decisive victory is a blow for Lionsgate, which has seen the last four series entries open to more than $30 million after the first "Saw" debuted to $18.3 million in 2004.
"Clearly 'Paranormal' in the marketplace had a negative impact on our opening weekend, but it is still the highest-grossing horror franchise in the history of the industry, and I look at that as a phenomenon," said David Spitz, executive vice president of distribution for the studio.
Beyond the presence of "Paranormal," "Saw VI" may also have been harmed by fans' dislike of last year's "Saw V," which garnered a weak average audience grade of C, according to market research firm CinemaScore.
This year's entry got a B, giving Lionsgate some reason to hope it could play longer than the last couple of "Saw" movies, which have faded fast after their opening weekends.
Given its production cost of about $11 million, "Saw VI" could still be modestly profitable for Lionsgate, which is more than can be said for the weekend's other new films.
"Astro Boy," which was produced by Hong Kong-based animation house Imagi Studios at a cost of $65 million and distributed by Summit Entertainment, opened to a dismal $7 million.
Tween-targeted "Cirque du Freak," an adaptation of the book series that was intended to piggyback on the successes of "Harry Potter" and "Twilight," managed only $6.3 million. Universal Pictures and Relativity Media evenly split its production budget of $40 million.
Fox Searchlight's "Amelia," which starred Hillary Swank as the pioneering pilot, didn't even crack the top 10, opening to an anemic $4 million, albeit at fewer than one-third as many theaters as the other new pictures.
Ted Waitt, co-founder of computer company Gateway Inc., was lead investor in the movie, which cost about $40 million.