It's typically believed in Hollywood that you have to spend a lot of money to make a lot of money. Or, maybe that's just how it seems to us outsiders greeted with one overinflated blockbuster after another. Some movies are even marketed partially on the fact that they cost so much. But then a movie like Paranormal Activity comes around and shows the suits that a movie can make a ton of profit when it's cheaply produced but well made.

Unfortunately, the normal reaction to a breakout hit like that is to ignore it, pronounce it a fluke or otherwise go back to business as usual. That's why it's so refreshing to learn, as Variety reports, that Paramount Pictures is reacting to its success with Paranormal by budgeting $1 million annually for the production of 10 to 20 small films, none costing more than $100,000. I'm guessing they won't go any lower than $15,000, which is how much Paranormal reportedly cost -- initially at least.

The studio will be handing these microbudgets to both unknown and established filmmakers, yet it doesn't appear to be a given that all these films will receive theatrical distribution. Maybe some will go straight to DVD and/or serve as a calling card for new talent and/or function as source material for remakes with bigger budgets.
In a way, it's fitting that this initiative is coming from Paramount, given that forty years ago the studio became one of the most profitable studios by concentrating on smaller films like Harold and Maude and Love Story during the Robert Evans reign. However, the cynic in me sees this as an idea that won't deliver as positively as anyone thinks it will. Maybe we'll end up with a few more low-budget genre flicks, mostly of the horror variety, but we shouldn't expect anything along the lines of The Conversation or Chinatown.

It's also worth acknowledging that while Paranormal Activity is now considered the most profitable movie of all time, it's not like Paramount made $100 million off a $15,000 investment. The studio paid $300,000 for the film, paid for reshoots and additional post-production work and also spent a good amount on marketing. Maybe this is just the studio's way of saying they wish they could have made the thing from the beginning at that low cost and made more.

But in some ways, a film like Paranormal is a fluke, because nobody can just look at it, hope to imitate it's success and easily print money based on such an exploitation. It was made by a talented filmmaker with a great idea and great execution, and that's still pretty rare these days. I wish Paramount luck with the initiative if they do indeed want to find other diamonds in the rough and not just going for a presumably easy cash-grab system.