An indie blockbuster considered last year to be lightning in a bottle has evolved into the most successful horror franchise of the moment.
This weekend's estimated $41.5 million debut for "Paranormal Activity 2," the highest ever for a horror film not accounting for ticket price inflation, immediately makes it a viable series for Paramount Pictures. The studio may now come out with annual installments, as Lionsgate has done for the last six years with its low-budget horror phenomenon, "Saw."
The hugely successful debut of "Paranormal 2" overshadowed a soft start for the new Clint Eastwood directed life-after-death drama "Hereafter," which took in $12 million during its first weeked in nationwide release.
Producing "Paranormal Activity 2" was a risky move for Paramount as the studio attempted to replicate the commercial success of a film made independently for just $15,000 that turned into a box office blockbuster last year based almost entirely on word of mouth and Internet advertising.
For the sequel, the studio couldn't again build buzz through stealth late-night screenings since audiences were so familiar with the title. But prior to opening the film last Friday, Paramount kept the plot and characters tightly guarded and strategically leaked details online through horror websites. Most television advertising was held off until the last week and then aired primarily in late night on cable to reach the target under-25 demographic.
"The fans couldn't discover the movie again, but we could let them discover all the elements that were in it as part of a very unique media plan," said Paramount Vice Chairman Rob Moore.
It wasn't until about one week before "Paranormal 2" debuted, for instance, that Paramount leaked a clip revealing that Katie Featherston, who starred in the original, would appear in the sequel.
The studio successfullly stoked audience interest enough to generate a very strong $6.3 million worth of ticket sales from screenings Thursday night at midnight. The film clicked with its target — 61% of audiences were under 25 and, as has become increasingly common for horror movies, the film performed particularly well in cities with large Latino populations, such as El Paso and Alburquerque.
Ticket sales fell a hefty 35% from Friday to Saturday, indicating that attendance was heavily front loaded, which is common for youth-skewing films. Still, audiences gave the picture a good if not great average grade of B, according to market research firm CinemaScore, giving Paramount hope that grosses won't fall too precipitously next weekend when " Saw 3-D," the last entry in that series, debuts.
It's not clear yet whether "Paranormal" will reach the $107 million total of last year's original "Paranormal Activity." Regardless, it's sure to be very profitable for Paramount, which spent just $3 million on production and had a relatively inexpensive marketing campaign. Though "Paranormal Activity 3" has not been confirmed, Moore indicated that it's very much on the studio's radar.
"It's certainly our hope that [producer] Oren [Peli] and his team have the ability to deliver another chapter in this," he said.
The opening of "Paranormal Activity 2" marks the second weekend in a row that Paramount has enjoyed a big opening for a movie aimed at young audiences. The surprise blockbuster "Jackass 3-D" declined a sizable but not huge 57% to $21.5 million on its second weekend in theaters.
Unlike the original, Paramount also has foreign distribution rights to "Paranormal Activity 2," significantly increasing its commercial potential. The movie debuted in 21 foreign countries this weekend to mostly strong numbers, generating a total of $22.1 million. It was No. 1 in Great Britain, Australia and Mexico, grossing $6.3 million, $2.7 million, and $1.9 million, respectively.
"Hereafter" was a more expensive-than-normal movie for the prodigious Eastwood, with a production budget of about $50 million due to extensive digital effects. That makes its $12 million opening particularly troublesome for Warner Bros. The movie, in which Matt Damon leads an ensemble cast exploring what happens after death, performed particularly poorly in the South.
Eastwood has had hits that opened slowly and built buzz, such as 2004's "Million Dollar Baby," which Warner is hoping will happen with "Hereafter." In good news for the studio, this Friday's "Saw 3-D" won't compete for "Hereafter's" older adult audience to whom the director appeals — 80% of those who saw the film were over 30.
"I always tell Clint it's not about the first week with his movies," said Warner domestic distribution president Dan Fellman.
However, the average audience grade for "Hereafter" was a C+, indicating that word of mouth may not be good. It could end up performing about as well as 2008's " Changeling," which opened to $9.4 million and ended up with $35.7 million domestically.
That film grossed a solid $77.3 million internationally, however, and last year's domestic disappointment "Invictus" did an even stronger $84.7 million overseas. Warner could end up doing much better with "Hereafter" when it opens in foreign countries.