In 2007, an Israeli-born software programmer named Oren Peli decided to shoot a film in his own house using only three actors and a budget of just $11,000. He had no prior film experience and started making his movie with the help of his girlfriend and an old friend. The inspiration to make the film came from the strange noises he heard during the nights in his new suburban house. Peli set up cameras around the house to observe what went on while he slept, and the idea turned into the premise for Paranormal Activity, a Blair Witch Project-style fright fest featuring a young couple haunted by a demon.

Now, the "found footage" supernatural thriller is gathering rave reviews and record-breaking box office numbers. Two weeks ago, during the movie's limited release, it grossed $7.1 million in 160 theaters for the Columbus Day weekend, jumping into the top five with the smallest number of theaters ever. This performance trumped Platoon's 22-year-old record of a fourth-place finish playing in 174 theaters. Paranormal Activity even beat out Toy Story/Toy Story 2 (3D), which, by comparison, screened in 1,752 theaters.

Ticket sales are not likely to slow down for a while, either. This weekend, Paramount Pictures expanded Paranormal Activity nationwide into 800 theaters, and the movie's $20.2 million gross was the third-largest for the weekend. The studio is expected to broaden the movie to 2,000 screens on Oct. 23.

So how did an independent horror film shot by a first-time director and starring two no-name actors manage to garner so much success in the mainstream movie industry? The answer is a remarkable story involving one of the most ingenious marketing schemes in recent history.

After Peli finished his movie, he began screening Paranormal Activity at film festivals such as Screamfest and Slamdances, but the movie was never picked up by a major distributor.

In 2008, however, Dreamworks picked up a DVD of the movie. The studio execs were so impressed with the film that they handed it to Steven Spielberg, who took it back to his Pacific Palisades estate to view. According to an article by the LA Times, Spielberg's bedroom doors locked by themselves after he watched the DVD, forcing him to call a locksmith to get out. Spooked, Spielberg brought in the DVD the next day in a garbage bag, telling the studio that he loved the film despite the haunting incident.

Dreamworks intended to release the film that year, but an acquisition-related conflict between Dreamworks and Paramount delayed Paranormal Activity's release until this fall.

On Sept. 25, Paramount held midnight screenings in 13 different college towns. Then the buzz began. Twitter, Facebook and word-of-mouth carried the same message across the country: Paranormal Activity is really, really scary. The presence of the film on social networking sites was, in fact, part of Paramount's marketing strategy of drumming up hype for a wider release. A team of Paramount reps began using sites like Twitter and Facebook to encourage people to "demand" the film on Eventful.com. If enough users in a town clicked "Demand it!" for Paranormal Activity, Paramount would bring the film to the area. According to the ad campaign, it is "The First-ever Major Film Release Decided by You." Paramount promised to roll out a wide release once the movie reached 1 million demands. That goal was reached in only four days.

The movie's Facebook page has over 70,000 fans, and its presence on Twitter is huge, as shown by twitter.com/tweetyourscream or searching for the phrase "Paranormal Activity." Even Roger Ebert of the Chicago Sun-Times tweeted: "low budget, no fancy f/x, but it's surprising how scary 'Paranormal Activity' is."

The Internet buzz on Paranormal Activity has reached viral status, much like its pseudo-predecessor, The Blair Witch Project. Also a horror mockumentary, Blair Witch became an online phenomenon with the help of its Web site, www.blairwitch.com, which chronicles real-life, supposedly supernatural disappearances and attacks. These films show how grassroots marketing works well with videotape-style horrors. But does the success of Paranormal Activity signify a trend moving toward digital means of advertising and distribution? Prof. Caren Irr (ENG), who teaches a ENG 50B: "American Independent Film," argues that the startling success of Oren Peli's movie may be difficult to replicate for other independent filmmakers.

"Now that production costs are much lower, especially for larger digital films, independent filmmakers face special hurdles when it comes to distribution and exhibition of their films," she explained in an interview with the Justice. "Indie films will likely be distributed via cable and on-demand viewing," she continued.

To bypass the expensive advertising process, low-budget indies will instead go directly to digital distribution sources like the Independent Film Channel rather than compete with big studios. Independent films focus on a niche audience, and it is very rare that one becomes a pop culture sensation like Paranormal Activity has. However, the movie shows that the "Twitter effect" can offer independent filmmakers a chance at a sleeper hit.

"The success the movie has attained already is beyond my wildest dreams," Oren Peli said in an article on the New York Daily News.

You can see what the fuss is all about as Paramount widens its release on Paranormal Activity. The Landmark Embassy in Waltham will be playing it starting Oct. 23.