by Romain Raynaldy

LOS ANGELES, US - Fuelled by rave word-of-mouth reviews and clever marketing, mini-budget horror film "Paranormal Activity" has taken the box office by storm to become the year's most unlikely number one hit.

Following in the footsteps of 1999's "The Blair Witch Project," director Oren Peli's acclaimed film -- made for a microscopic 11,000 dollars -- has already earned 62 million in North America alone, including 22 million dollars this weekend when it slaughtered the "Saw" horror franchise to top the box office.

Grossing more than 5,000 times its budget as of Sunday, "Paranormal Activity" is almost certain to rewrite the list of the most profitable independent films of all time.

"It's an unbelievable phenomenon," said Jeff Bock, an analyst with box office tracker Exhibitor Relations, speaking of the movie even before it reached number one.

Like "Blair Witch," "Paranormal" is simple but effective. Spooked by things that go bump in the night, a young couple in suburban California decide to leave a camera on at their bedside to record supernatural goings on.

Remarkably, the hit movie has had to wait to reach the big screen, having been filmed as long ago as 2006.

Initially snapped up by Steven Spielberg's Dreamworks, "Paranormal Activity" was eventually released by Paramount after the two studios split in 2008.

Bock meanwhile said Paramount's decision to postpone release of Martin Scorsese's latest film "Shutter Island" from October 2009 to February next year had worked in favor of "Paranormal Activity."

"They could focus all their attention on this very small film," Bock said.

Paramount's marketing campaign for the film was built around word-of-mouth and Internet buzz following a handful of screenings at select festivals.

Amy Powell, senior vice president of interactive marketing at Paramount, said executives had taken the decision to allow fans to "be an important voice in dictating where the film would be released."

"We have been able to galvanize the community online to actually drive the release strategy and the film has been released as a result of the fans support," Powell said, saying social networking sites had helped create buzz.

"We decided that if we hit a million demands, we would open the movie nationwide and we hit a million demand in only four days."

Powell described comparisons to "Blair Witch" as "wonderful." "That movie was 10 years ago and there was an entirely different set of tools available at that time to market a movie," she said.

"We are the lucky benefactors of all the innovations that happened online."

Stuart Ford, chief executive of IM Global distributors, said he had been convinced the film would be a hit after watching it for the first time in 2007.

"I didn't imagine that it would become such a phenomenon. What I did know was that there was something unique and scary about it," Ford said.

"And that's why I took it on, not because I was convinced it would be a huge theatrical box-office success, but it definitely had something different."

Ford sold worldwide rights to the film in just 48 hours, something he described as "pretty much unheard of."

"We recruited 250 teenagers here in Los Angeles, and let the distributors watch the film in a movie theater with its target audience," Ford said.

"And it was that reaction of the audience that convinced distributors to buy the film in the next 48 hours."

The appeal of the film is simple, Ford said. "'Paranormal Activity' is just a really scary film," he said. "'Blair Witch' really did its business largely based on notoriety. The exit polls, 50 percent of the audience came out and said, 'I'm not sure what is the film about,' or 'It wasn't that scary, really.'

"If you look at the exit poll on 'Paranormal,' it's the opposite, it's 95 percent of the people saying 'Okay, now I know what the hype was about, it was really scary.'"

Paramount's chairman, Brad Grey, has already suggested his studio will try and capture the "Paranormal" magic once more in a sequel.

"We have the rights on a worldwide basis to do "Paranormal 2" and we're looking to see if that makes some sense," he said in Sunday's Los Angeles Times. --AFP