IFH 670: How I Made $193M Off My Micro-Budget Film with Oren Peli

Alex Ferrari 0:00
Hey guys, so I wanted to let you know what we're going to be doing now on the show. Moving forward for a little while, I wanted to kind of bring in some amazing episodes from the indie film hustle podcast network with guest hosts. And you might recognize some of these guests hopes we'll have Dave bullous, Jason buff, and Scott McMahon guest hosting some of these episodes every week. Now we're going to be doing still our regular episodes on once a week and then we're going to be doing these guests episodes, the second part of the week, and that way we can get you guys more amazing content, and help you move forward on your filmmaking or screenwriting journey. So sit back, relax, and enjoy this amazing episode with my buddy Scott McMahon.

Scott Mcmahon 2:43
Today's episode is a rebroadcast of a past episode in which I interview the creator of paranormal activity. Oren Peli, Halloween is around the corner. So I thought I polish this interview off and share with you again. But what I love about this interview is how we're able to go step by step of what had to happen in order to make parallel more activity to success, it became, you've probably heard the story how oran made parallel more activity for $15,000 and then sold it to Paramount and how it became a massive hit. What you probably don't know is all the emotions that went into this roller coaster ride and so many things having to line up in order for it to become a global phenomenon. You know, sometimes luck plays a factor. And you're going to hear that in this episode. And I'm titling this episode. Imagine making $193 million off your micro budget film. Just let that sit with you for a moment. Yeah, it's the dream. I'm sure we've all had a dream scenario like that. Now you get to hear the blow by blow steps of what that actually feels like when Oren shares his story with us. Now, I'm not sure if this will ever happen again. But who knows it could happen to you. I mean, you your film could be the next paranormal activity. Anything's possible. So sit back and enjoy this rebroadcast of my interview with Oren Peli here on the film Trooper podcast. Well, it's been a very long time since we you and I bumped into each other. Yeah, quite a bit. Yeah, I think honestly. Gosh, you know, I think it really honestly last time, we kind of just, I mean, we always would see each other at like the events or the parties. But we really only worked together briefly on like one of the basketball games at Sony and you were the owner. I'm gonna say this is really interesting because you were the only person that would help us because I was working in the cinematics department. And we're having problems with the video player, I think for PlayStation two because it was fairly new. You know how Sony would have like their proprietary code on top of whatever code was normal. But they we were having a really difficult time trying to get a movie player to work on PlayStation two, and we were trying to figure out the specs that we had to create the prerender movies for and you were the only person the only programmer that He was so kind enough and willing enough to like work out all the kinks and made the major breakthrough for us. So I just want to say, hey, way back then I just want to say thank you.

Oren Peli 5:14
No problem. But to be honest, I don't even really remember that I'm not even sure when you show it was me and not maybe a mirror. Well, I mean, it could have been, it could have been me, it was we're talking probably like 15 to 20 years ago, right?

Scott Mcmahon 5:27
Is it been that long? To God? I mean, it's, I was I was there in 96 When I started, and so this year, right, we're 15 years, I think, almost.

Oren Peli 5:39
Yeah, I started in 97. And then I started with a NFL extreme with a mirror. So it probably was for one of those in either in 97 or 98. So a long time ago.

Scott Mcmahon 5:51
Oh, my God. I feel old now. Yeah. Well, you know what's interesting? Yeah, because both you and Amir were very kind to spend time helping us out. And that was really cool. And it's interesting that the reason I'm kind of brought this little story up is sort of just to also get reacquainted. But for this particular podcast that I do fulfillments Trooper, which is the whole resources designed to try to help filmmakers become entrepreneurs. In this new day and age, you know, of people just basically living like The Four Hour Workweek type thing. And just try to apply online entrepreneurship, marketing and business and try to give that information over to independent filmmakers. As as everything keeps changing so rapidly. But anyhow, what I like to do is take people through sort of the general hero's journey, and what you just gave, or what we just shared, there was what I call your save the cat moment, you know, little Blake Snyder, screenwriting book. And you know, that concept like your character has to have like a save the cat moment within like the first five minutes or something. So the audience can say, Yes, I like this character, or I can relate to this character. And I will follow this character all the way through the end. Well, that was to me, that's, that's me sharing your save the cat moment, which is just showing that during a time where nobody else was helping us you did, so thank you.

Oren Peli 7:21
No problem.

Scott Mcmahon 7:22
So let me ask you. So another book that I like to pair it up the classic story book or story by Robert McKee. He talks about the inciting incident. And do you remember, like, one movie when you were younger, that made that had an effect on you, that doesn't have to be related to paranormal activity, or a horror film, it could be something completely different. But do you have like a, like a memory like that?

Oren Peli 7:51
I mean, there have been a lot of movies that have had, you know, a tremendous impact on me, specifically related to part of my activity, I would say, as a kid, it was the exorcist that, you know, totally traumatized me. And later on Blair Witch Project, which we can talk about later, when it comes to, you know, the mechanics of low budget, but there'll be a lot of movie events that are, you know, kind of ingrained in my movie memory as a kid, like, you know, going to see Star Wars for the first time. And at Indiana Jones, you know, all those kind of movies that defined the, our childhoods had a tremendous impact. But also, you know, I would like to watch as soon as the video rental became available in Israel, which was more probably in the mid to late 80s, then I just watched massive quantities of movies, then. And I believe that I got something, a little something out of every movie, whether good or bad. So it's kind of like sometimes just being exposed to the sheer volume of, of movies and cinemas and different styles of directing and storytelling, sort of like, you know, gives you a massive amount of knowledge. Or, you know, stuff like second hand experience, sort of, as you're watching a movie and you're trying to figure out, like, why would the director do such and such and such, why would they cut here or there sort of kind of like in programming terms, reverse engineering something, which is how I learned programming by looking at other people code and, and you know, then tweaking it and learning from it. So that was, in a way my approach to filmmaking just watching as many movies as I can. And of course, later when DVDs became available, I would watch you know, the director commentaries and behind the scenes and just try to get into the head of the filmmaker and figure out you know why they did what they did?

Scott Mcmahon 9:43
Yeah, definitely. Hey, so let me ask you, what was it? This is a really weird question. But do you remember the day that you your family got a VCR? And what that was like to be able to rent movies in your own home? Was it an exciting event?

Alex Ferrari 10:00
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Oren Peli 10:10
It was more gradual than that. We got a VCR really early on. And we were one of the first or block we actually, when I was a kid, we won the lottery in Israel, not the big prize of millions of dollars, it was more like, five numbers out of six or something like that. So it was a probably, I'm guessing, in today's dollars, the equivalent of you know, 20, or $30,000, which was not life changing, but very nice. So we splurged on a few things, and one of them was a VCR. But we were ahead of the time back then there were no, you know, video rental places in Israel. So we could use it to record shows of TV. But it wasn't until many years later that slowly, you know, video rental places became available, and it would have very limited selection. And you know, over the years, it kind of grew. So, it wasn't like one day, we have a VCR. And suddenly, we have access to hundreds of movies. It was a multi year process.

Scott Mcmahon 11:06
Interesting. Yeah. I just I'm just fascinated. Because, you know, I grew up in San Diego, actually. So my experience was suburbia, and the first VCR and the camera like the the camera that was a detached from the VCR. And that was like our first gig. And, you know, obviously, the first thing that we did was, you know, my younger brother, my older brother, we would make a film of backing like we're punching each other. That was like our first film. It's a good way to start. Oh, yeah, I got some good little footage of Adam when he's little.

Oren Peli 11:41
Yeah, but in our case, a I mean, I even before VCR, a, you know, before video rental, I would still go to the movies, probably like every Friday, that would be like the thing that you know, me and my friends would do almost every Friday, we would go in, you know, check out the latest film. So even even before a rental, you know, it was still a, you know, a large part of my life.

Scott Mcmahon 12:05
Very cool. Very cool. So yeah, so we have your save the cat moment, we have your inciting incident. Let me ask you. So when you start making normal activity, I know that I'm not going to rehash the of all the details that you've gone over before. Because I'm going to actually point everybody to a lot of these past interviews that we've done, so everybody can get the full story. I am actually interested Did you? Have you always thought that you wanted to become a filmmaker, when you started doing paranormal activity? Or was this something more like, kind of like a shits and giggles, like, you know, I don't know, I kind of just want to make something.

Oren Peli 12:41
It was a little different. It was, as I said, you know, I always loved you know, movies. But growing up in Israel, making film was not something that seemed like, you know, within my grasp, there was no real filmmaking industry in Israel. And so I always imagined to be a filmmaker, you need to go to film school, and then you know, spend many years there and work your way up through the industry. And maybe then one day, you lucky and you'll be able to beg a studio to give you millions of dollars, and you can make a film, or maybe you need to have connections. So I didn't even entertain the thought of becoming involved in filmmaking, I thought I will just be a film fan. And then I got into programming, and it was doing pretty well. So I had a comfortable, you know, living and I wasn't gonna throw it all away to start, you know, being an intern in you know, in a in the film industry. Then I saw the Blair Witch Project, which totally changed my my concept and my thoughts, because, you know, it's like, Well, anyone can just buy a video camera and run around and make a film. And then I started looking into other filmmakers that started the way that were like, you know, Robert Rodriguez, and they're in our no ski and Christopher Nolan. And all of these filmmakers started by making a no budget or you know, like a $10,000 film. In most of these cases, their first film wasn't a huge hit. But it's definitely opened the door for them to get to bigger and bigger films. So after I saw the Blair Witch Project, and I kind of realized there may be another way I can get into the industry through the backdoor. And you know, through a shortcut, I said to myself, well, if I ever have an idea for a film, and I think that I have the ability to make it, you know, sure, why not. So when I made the decision to make paranormal activity, I was thinking, first of all, who knows, maybe it will become the next Blair Witch Project. And if that will be the case that will change my life, I can quit my job that by then I really, really hated. And I figured, you know, at least during the time that I'm working on the movie, I'll have the hope that that will keep me going that maybe something will happen that they'll keep advising me and if have, you know, worst case scenario, the movie turns out horrible, and I never sell it, then you know what, then I made a shitty movie that's still clinical how many people can say to make a city movie. And I figured I'll allocate a budget of $10,000. And, you know, I can live with losing $10,000 for, you know, having a hobby, you know, for a year or two, a lot of people spend much more than that on hobbies that don't have any, you know, prospects of generating any income. So if you get a $10,000 Gamble, it ended up being 15,000. Because, you know, like many movies, it went over budget. But I figured out for $10,000, either, I kept myself busy for a year or two and made a movie, or who knows if if the stars align, and with some luck and timing, and you know, if the movie turns out, right, who knows, maybe, maybe it will be a life changing event. So it was a little bit of both, I kind of had to keep myself balanced and realistic that the odds are against me, but can't lose sight of, you know, the big dream.

Scott Mcmahon 16:05
So you definitely there, you've always had this sort of artistic spirit, then because most artists or filmmakers, or anybody who has a need to express artistically, they're almost like cursed, like, you know what I mean, they're always going to need to do something creative, expressive, no matter what. So you've, I'm assuming that you've always had that itch. So like you like you were calculating it. But you're also saying, You know what, I'm going to have to just do this anyway.

Oren Peli 16:32
That's a part of it. And I think part of it might have been a with where I was career wise, because at the early stages of my career, there's been a lot of room for a, when I'm talking about career, I'm talking about programming, there was a lot of room for creativity, that would be small, efficient teams. And lucky, like we mentioned before, the first projects that I worked on at Sony with a mirror and fell extreme. And then there was another project that ended up not being released. It was just me and Amir, and then later on with Omar, so we were small team, and each one of us had a large self responsibility, but also a large share of creativity. And then in the later years, it's only a, you know, you are one of 20 to 30 programmers, and your responsibility is very limited. And you're basically just like, you know, a code monkey. And there just wasn't any real satisfaction in doing what I was doing. So in that sense, you probably right that making the film's satisfied in need that ahead that could not fulfill in my boring day job.

Scott Mcmahon 17:43
It's interesting that you said that. I mean, our days at Sony, when we first started, it was sort of like a mini startup. We were away from the main headquarters up in Foster City and being in San Diego. And I can attest as well, it was fun. I mean, I was being able to I was just making videos, and then working with the semantic group at that point. But things just got big, like, by time, PlayStation two, halfway through by the sort of the urgency and rush of PlayStation three, kind of imploded the company because it's just got so big and corporate, that did become stifling for sure. Which was interesting. I was over at the cinematic department across the way from you guys in the building across the street. And we had access to like, all this amazing equipment. And all these people that I worked with, were always talking about, like, how are we going to make a movie, we got to make food, we got all this stuff, we can make a movie. I think I was laughing like I have all this access, and I don't have a story to tell. And like, and then I would, I would like write a bunch of scripts, but knowing production wise, I'm like, I just made a fucking 100 million dollar film. Like go. Like, it's it was like this creative block of like, I have not been able to like come up with a story that I could just make like you did what you did a great job of just reverse engineering and saying, You know what, I can make this I can take the 10,000 You know, invested into this project. Because Can I ask you what, like 10,000 In general, what did that cover? Obviously the you paid the actors, which is fantastic.

Oren Peli 19:15
Yeah, that was a didn't really get much that wasn't a significant part of the project of the budget. Most of it was just equipment. The camera was you know, over $2,000 I bought is state of the art editing PC and some software. I think the PC alone was over $3,000 And then all these accessories for the for the camera that was still you know when when high def cameras use tapes. So I bought I don't like 70 tapes or even more and extra batteries and lenses and microphone. So all this stuff ended up and that there was a lot of little miscellaneous stuff like you know, when I did the casting auditions, I had to pay a few 100 I was here and there for the, for the theater that I would rent. So there was a lot of little things here and there that ended up. To be honest, I didn't really keep a very meticulous budget, I didn't really keep track off many of the smaller things. So when I say $10,000, it's an estimate, it will be way more or less, I think my original estimate was about 11,000. And then after we did some more research, it went up to 15,000. So it would be in that area, maybe it's 16, maybe it's 13. I'm not really sure, but it's around there.

Alex Ferrari 20:42
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Scott Mcmahon 20:52
That makes sense, because at the time, I remember like, when all the editing equipment became down, because we were using like Avid, we were using MIDI 100. We were using these, you know, 20 $500,000 machines over at the cinematic department. And then final cut came in. And then Sony Vegas came in after that, which is the software base that just plummet, the cost of DV cameras came out of nowhere. And I remember just freaking out going, I can't believe you can actually buy all this gear for 10 grand, which is pretty much what you bought what you paid for at that particular time. And in the state of things. So you finish, I'm gonna just cross over like really quick gloss over the making up paranormal activity. Like I said, I'll point other people to other links that you interviews that you've done that give a bit more detail. So you finish paranormal activity, like sort of your first cut, who did you show it to who was like the first like friends and family, they got a chance to see it?

Oren Peli 21:49
Well, the first people who saw a really, really rough assembly, which had like missing scenes and visual effects weren't completely done in audio means that just the rough throwing together of sin to just show yeah, we have somewhere in there. We have a movie that was a mirror and my girlfriend at the time, Tony, who were part of the crew. So there were the first people who saw the first cut. And then shortly after a when it was a little bit more polished, but not much. I showed it to my next door neighbor's who, who not the whole family setup, but it was the Father Tom and his son, Brian, and his son was 17 at the time. And he's like, he's a wrestler right now. I mean, this was back then. Now he's a fighter pilots. So not like wimpy guy. And he told me later that he had nightmares for days. So I'm like, maybe maybe I'm onto something.

Scott Mcmahon 22:52
That is so cool. You know what's so cool is the knowing that Amir, they are working with you at Sony was also sort of in on this. And I assume you kind of kept this under wraps, like, because I don't think nobody knew at Sony, this is just something private, right?

Oren Peli 23:06
Yeah, I didn't steal a single person. I mean, my neighbors didn't know, a none of my friends. No one. It's funny that really the only people who knew were the people that were directly involved in the making of the film, I didn't tell a single person, hey, guess what, I'm going to make a film, it's going to be so cool. And all the other people that I knew were my parents. And again, not because I wanted to tell them, I would have kept them in the dark as well. But they came to visit me like a month before a we were shooting. So there was no way for me to hide the fact that you know, the house looks different than we were doing, you know, tests and dealing with all that stuff. So I had no choice and I had to tell them.

Scott Mcmahon 23:46
That's amazing. Love it. So, okay, so we're gonna fast forward. So you finish the film gets polished, it gets finished. And you have a small group of close friends and neighbors and family. You You've seen it and it kind of gives you I'm assuming what was that emotion like just getting like sort of that first pass or going holy? Did you get like a moment of like, holy shit, I just made something.

Oren Peli 24:07
It was more. Again, it was it was more gradual death. Because at every point when I would saw the movie that I started showing it to as it gets more polish to larger groups of people in the beginning, they were just friends. And it also sorry, to Katie and Mica. And all the feedback that I got was pretty positive. I would say probably Katie and Nico were the most critical. They were never happy with their own performances. And it was I would say, you know, do better. And I'm not talking about this is great. So they were like very self critical. And then I would say to friends, and you know, they would say Oh, this is great. This is really scary. And I wouldn't be like, are they really thinking that or they're just being polite, right? So so then I started holding screenings. Through a friend of mine, Alex, and I asked him to invite his friends that don't know me. And we didn't say that I directed the movie, I would I just said, I'm one of the producers. So you know, I don't care if you like it or not to be honest. And I actually give them questionnaires that they can fill anonymously. So there would be groups of, you know, 1015, maybe 20 people who would watch the movie. And first of all, I would watch their honest reactions, when there was like a scary moment. And I would see, you know, like a guy and a girl holding their hands really tight and getting totally into it, and jumping with something scary happens. I know that something is working. If I see people just sitting there kind of bored and disengaged, I know, you know, this part of the movie as a problem. And then I would also listen to the feedback. And when the feedback stayed mostly positive, I kind of slowly after every screening, I started feeling more and more confident. But I would say if you're looking for like one moment where I say to myself, holy shit, this could be the real deal, then that would be at the scream fest screening, when I watched the movie in an audience of, you know, 100 people and hearing them scream, like, you know, and react in a way that Evanson people reacted before. And seeing, you know, the reviews that came out, there were just a few, a few reviews, but they were very encouraging. So from that point on, I'm like, okay, maybe this is the real deal. And maybe I should get serious about, you know, a releasing it, you know, theatrically,

Scott Mcmahon 26:29
Okay, I'm gonna back up just a little bit before we get this screen fast. So your friend, Alex was just like, local San Diego theaters that you were just like, was a theater or just I guess somebody's home? If somebody's home. Okay, so you just did that? And that was really cool. Yeah. How cool was that? For anybody who was part of that just hanging out? They were part of cinematic history saying, you know, I was there at the house when they showed that anyway. So you got some confidence. Just I don't want to skip over how you got the screen fast. Because I understand. From what I gathered, you did your homework, you said I gotta get sales agents, producers reps, and then you start cold mailing to a directory of like, agencies, and sales agents. And or did you? Did you go that route? First, before you did a sort of your own film festival submissions?

Oren Peli 27:19
Yes, because I realized that, you know, I know my strengths and weaknesses. And I knew that I know nothing about the film industry and how it works. So I started just, you know, reading on the, on the internet, how to sell your movie, and you know, just trying to get information. And what people were saying is that, you know, if you're going to try to do it on your own, you're going to make a lot of irreversible mistakes. So you need someone to guide you through the shark infested waters of Hollywood, and you need a lawyer or producers representative or an agency, like, Okay, sounds good. To me. That's exactly what I'm what I'm looking for someone experienced to guide me through this. So I tried contacting a few agencies. And it's basically like, you know, you call them and they're like, you get the main switchboard. And I would be like, Yeah, I'd like to talk to someone at your fuel cell department. They're like, Are you a client? Like, no, we'll refer to your bike lane? No, well, then there's no one for you to talk to thank you. Bye. And then I tried contacting a few. I saw I found some article from Sundance or something about, you know, the top players in the indie film themselves world or something like that. So I just started contacting a few of them. And in a few cases, they were nice enough to return my emails and return my calls and actually said, Yes, we're gonna send your DVD we'll check it out. In most cases, I never heard back from them. In one or two cases, people said, yeah, that's, that's an interesting little movie, but we just think it'd be really hard to sell it, so we're not interested. So that point, I'm like, Okay, well, I gotta figure out a different strategy.

Scott Mcmahon 29:01
How long did this take? Was this over a couple of months? You know this because it's not like no, because, you know, when you started to submit it, you know, this is still your full time job. So I'm assuming that you were just you know, like you said gradually piecemealing this out?

Oren Peli 29:15
Yeah, it was awful process of a few months, but I kind of fairly quickly got the idea that it's not going to be too easy. So I already in parallel, started researching festivals and and started submitting to a few of them. But I figured you know, I'll still prefer to have the because you know, you can submit to festival and if you get accepted, you can still back out of it later on. So I wanted to kind of I didn't want it to just sit around and do nothing while I'm waiting to the potential producers reps to contact me. So at the same time, I was conducting some festivals and doing a lot of research about which of the upcoming festivals could be the best fit and would have the best odds of getting a getting accepted in. And so, so both were doing both things were happening at about the same time.

Scott Mcmahon 30:06
I see. So the story goes that somehow somebody in the CAA mailroom I don't, I forgot his name was eager, ambitious, found your film and brought it to the scream fest, or he was working at the scream fest festival. I don't know all the details of that. But what was like sort of that that first main break after you were submitting everything.

Alex Ferrari 30:31
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Oren Peli 30:41
Yeah, so I submitted the film to many festivals, including the San Diego Film Festival, which I thought you know, that I'm definitely gonna get into that one here. I'm a local San Diego filmmaker, and the movie was shot in San Diego and they want to promote local filmmakers. Nope.

Scott Mcmahon 30:55
Oh my god. Oh my god.

Oren Peli 30:58
Yeah. And basically all the other festivals that I tried, I don't even remember which ones were they may be Mill Valley. And they, you know, not necessarily like the bigger ones. Maybe I tried Toronto and got rejected. But yeah, there was a guy that was working for screamfest. And at the mailroom of CAA, his name is Kirill, baru, weird name, but very cool guy. And he saw the movie at Scream fest when I submitted it. And he brought it to the attention of Rachel Bill offski, the head of screamfest. And at the same time to the attention of agents at CAA. From what I understand no one at CAA actually watched it until after the movie, won an award at scoring fest. But he was sort of like responsible for both, you know, introducing the movie to CAA and to screamfest. So if it weren't for him, you know, who knows where we're I would be.

Scott Mcmahon 31:56
So that was just like completely, because you did submit it to scream fest, and he was just there. So that was almost like, so what kind of call did you get like an email or call or at the scream fest after you want like you won the award? did? Did a chorale come up to?

Oren Peli 32:13
I don't even remember exactly. Maybe Maybe I'm mixing because once the movie was selected into scripts, so then it became a, you know, much more involved with him in as far as how to promote the film. So I spent a lot of time dealing with him. I think I kind of think at that point, he might have not been as involved with scream fest. I think he might have been more involved in the screening process. And then he was more full time at CAA. So I don't remember exactly when it was but at some point, yeah, we met and, and he told me that, you know, he saw the movie and he loved it. And he gave it to CIA into into Rachel. So, but I honestly don't remember exactly when it was.

Scott Mcmahon 32:56
Okay. So this is amazing. So you you're going through your emotions, you're working full time job you're you're doing and I believe that I know what the climate was like at Sony, where you're just like, I gotta get out. But anyway, the so so you're doing this and you're and you're submitting you're getting rejected, you're like this is crazy because it never wavered because you're obviously you're you're still paying the 50 $40 you know submission fees, just hoping that something breaks. You get in at screamfest What was that feeling like when you got was that the first and only exception to a festival that you got into?

Oren Peli 33:35
A Yes, Rufus was the first one. And until we got some heat as result of screamfest after that, when I signed with CAA then later on a I think a few other festivals a accepted as a or maybe I'm wrong, because then we got accepted a couple of months later to Slamdance after it was announced that word slammed and then suddenly I'm flooded with requests from festivals all over the country and all over the world to you know, be part of, to submit to their festival or something that they would even say you don't need to submit your just aim, if you want to. And at that point, I was thinking hey, we're gonna make it sell it. So I'm done. So I don't need any more festivals. But yeah, at this point is screamfest was was the first and only one that showed any interest.

Scott Mcmahon 34:29
That's fascinating. Okay, so what was your emotions? Like when you got a call from ca? And because that's sort of that's a really a big piece of the puzzle here. So what what was going on? Or did you get like, did you have like a little celebration with your girlfriend and friends at the time?

Oren Peli 34:45
Well, this was a weird experience. I remember the exact a well actually, I don't remember the exact date but I think it was like October 22 of 2007 or something like that. And That was the that was the day that's the last real big fires happening in San Diego. So so just to put it in context the night before I come back from LA after the movie won a you know, on an honorary mentioned and Katy one Best Actress and I'm making a lot of contacts and all these distributors are giving me their business cards, and people telling me this is going to be a next blur. Wait, I'm on cloud nine. I'm like, holy crap, this this. This is really happening. The next morning at 6am I get a call from my neighbor. We're getting evacuated their fires get out of here. And I only took one thing with me. I didn't take toothbrush even though everything was already packed because I had you know, my overnight bag for from LA the day before. I only took one thing. My external hard drive just had a backup of all the footage.

Scott Mcmahon 36:02
So that is crazy.

Oren Peli 36:04
So yeah, and then I think you're like, holy shit, I hope the house doesn't burn down. Because then if I want to do research, that's going to be a big problem.

Scott Mcmahon 36:12
Oh, my God, all these things are running through your head. I remember that. Those were gnarly fires. I remember us getting evacuated like four in the morning. We were living over and Black Mountain near a forest ranch. And we had to get down to my brother's house in Encinitas. And then it's the smoke and stuff was just getting intense. So we make calls and actually jetted up to Marina del Rey, where we had friends that we stayed with for two to three days, like two days, I think. And then we'll just yeah, you know, it looked like the entire Southern California, which is burning right to the coast. And we had no, you had no idea for two or three days whether your house was up or not.

Oren Peli 36:52
Yeah, yeah. So So at the same time, I'm beginning to get a flood of emails from different distributors who are telling me hey, please send us a screener. I'm like, wow, an actual real distributor wants to see my movie. And I can't burn the DVD because I'm not by my computer. I mean, I have all the footage for backup, but it's not set up to actually, you know, burn a copy. So I'm not getting really stressed. But anyway, that's day later on, I get a call from Martin Spencer at CAA. So I get a call. Hi, Martin Spencer from CAA would like to talk to you. And at this point, I'm already like, Okay, this is a good news. If he is calling me, it's not telling me, hey, we just wanted to call you to let you know, Your Movie Sucks. So I'm not playing it cool. And if a you know, guy with the, you know, British accent like this, you know, very gentlemanly guy is asking me all the time I saw your movie, and it's awesome. And it scared the shit out of me and telling you how did you do this? And tell him how did you do that? And telling him? What was your budget? And I say it was 15 15,015,000. And he's and he keeps asking me all these questions. And then he goes, there's a long wait, and he's like, Who are you from? And I laughed, and you know, I told him, You know, I'm just a video game programmer. I'm trying to do this on the side. And he's like, Well, why don't you come up to Elaine? And let's meet. So I think that we can. Yeah, I think I couldn't, you couldn't really drive up. I think roads were closed. And I was south of the fires a thing with a mirror. So there wasn't really an easy way to go. No, I'm like, I'm kind of stuck in San Diego until the fires are done. So we went to a I went to see him a over the weekend after the whole fire situation was cleared. And he's like, Yeah, would you like to sign up with AAA? Like, yeah. That is amazing. Which is, by the way, is it? You know, I now have a lot of people asking me question like, you know, how do I find an agent? How do I sign up with an agency and from my experience, usually you don't find them they find you if you just cold call an agency, you're not gonna find anyone to talk to but when you make something a, you know, worthy, they'll they'll find you.

Scott Mcmahon 39:17
Yeah, I mean, obviously. So you're, you know, you're floored if I'm guessing right. So the fires kind of took everything out a commission you drive up now. So what I gather is that the agencies started to submit or represent news so they they were the became your voice piece for all these distribution companies and production companies. That's correct.

Oren Peli 39:42
Yes, no. This is where it gets a little leaner. The whole process of brain activity head looks so many ups and downs. So this is where I'm thinking like, you know, awesome, you know, this is the next logical step on the wave to theatrical distribution. And we're not not getting any offers for theatrical distribution, we're getting a decent offers for direct video and VOD, for amounts that, you know, at the time would have been very nice for me, you know, which would be like, you know, 234 $100,000 nothing to do that.

Alex Ferrari 40:17
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Oren Peli 40:27
But at that point, it's already kind of set in my mind that no, you know, this has to be theatrical distribution or nothing. So keep rejecting these offers, and CIA is telling me, Listen, you know, it's great effort, and you know, we're gonna get you nicer directing jobs, and you're going to be, you know, we're going to work on getting you in a great career. This will be your business card that will open doors for you. But this kind of movie doesn't really, you know, doesn't really work. If what you're effectively submission once every 10 or 20 years, there's something like a Blair Witch Project, but you know, the odds are against you. So take one of these direct video deals, and let's move on. And I'm just being stubborn. And it keeps saying, Nope, nope, nope. And, and no, and then we get accepted into Slamdance. So I'm thinking, well, maybe that's the missing piece. Maybe it's Slamdance. The real buyers will be there, the real studios, and we'll make a sale then. So I'm saying definitely no deal. until after we see what happens at Slamdance.

Scott Mcmahon 41:30
Oh, my God. So let me ask you emotionally or just your conviction. What was it that made you feel like, no, no, no. Something about this tells me I can make it happen on a theatrical release. Because like I, like you said, a lot of people in the position will be like, Hey, I can't believe I just made this for me. I'd be like, Oh, you just made this little film and you want to buy it for 240,000? Okay, done, whatever, you know. But something about it. What was it that that held your conviction?

Oren Peli 42:00
I mean, it was many things. It was like, you know, some of the reviews that we got at screamfest. When people when people would say, you know, this is one of the scariest movies I've ever seen. And different reviewers, like Steve Barton, who's a local San Diego guy who runs the red central kept telling me this is going to be the next blur, we'd Mark my words, that image of your bedroom is going to be in this cinematic lexicon of, of history. Like, you know, he's like, this is gonna be theatrical don't but, and and you know, the thing the audience's reaction, it's the scream fest screening. And then when I came back to scream fest a week later for the award ceremony, a lot of people that saw the movie a week earlier, would come up to me and say, you know, I've had nightmares this entire week, no other movie affected me this way. And I'm like, Are they just trying to kiss mess for no reason? Because there was no real reason to kiss my ass. I mean, nobody, or are they being sincere, but you know, you hear it so many times you start believing in it. And ultimately, it was, I would never forgive myself, if I took one of those deals for 300 $400,000 and moved on. And then found out later that some big studio that just never get the opportunity to see the film. Before I made a deal would have said, Hey, we would have loved to distribute this movie and make it the next blur. We'd stupid you already went to the DVD route, now it's too late. And if that happened, I would have never forgiven myself for for not seeing the the through.

Scott Mcmahon 43:36
That is amazing, to have the foresight to and maybe something deep down inside you and to just hold your ground as well as listening to your audience, which is what everybody's, you know, teaching in the any type of business startup space, which is like, you know, really, really listened to your audience. And then and then move accordingly from that. So all the stuff happens. Did you submit to slam dance on your own? Or was that something that was submitted? After you signed CA?

Oren Peli 44:10
I submitted it on my own I submit it to Slamdance and Sundance and then probably few others, right after or maybe even right before a scream fest? I don't remember the exact timeline. But I believe I submitted it on my own.

Scott Mcmahon 44:28
So if I'm, if I'm dealing with the timing, correct is that so it gets accepted to scream Fest in Los Angeles, September, October, and then, you know, slam dance has got to make their decision well before January. So did you get noticed like in November or something?

Oren Peli 44:47
Yes, it was probably around in November.

Scott Mcmahon 44:52
So I'm guessing. Do you think screamfest had something to do with it or was it total coincidence?

Oren Peli 44:59
It's might have, if I remember correctly. A I hope I'm not messing up the timeline. But I think that I submitted to Slamdance. Right after screen fest, and because I kind of remember, that's when that's when I submitted it to them. I included like a printed piece of paper with quotes from some of the reviews. So if that was the case, it probably was after screamfest. And I think that the fact that there was some sort of prior, you know, like when you when you get one of 10,000 submissions, and one of them has already won an award and already has great reviews, maybe there's a higher likelihood that the screen the festival screeners will pay more attention to it. So yes, I think it will probably was right after screamfest.

Scott Mcmahon 45:55
It's kind of funny, because you're at this point, yeah. Like an agent, like, like the top agency, and you're still doing all this stuff yourself. And you get in, and they're like, Oh, hey, good job.

Oren Peli 46:06
I mean, at the end of the day, you have to do that. I mean, you can't count on anyone else. No, no one's gonna care about you. Like, like you. I mean, a week before that was actually before FCA. But, you know, to promote the movie for screamfest, I actually cut a 32nd trailer and ran it on TV, you know, on the time warner cable stations in LA, you know, come see the movie, and you know, put a little trailer with the date. So just for that one screening, because I wanted to make sure that people hear about it, and that the theater is going to be full. And I stood on your street corners in a layer with drive up to LA with flyers that I designed and printed, and with the right of the people in the street? Do you like horror movies, come check out this movie, and we'll give them a little, you know, postcards, with the date, and you know, a little screenshot from the movie. So at the end of the day, I mean, you can't, you know, you need to delegate as much as you can. But, you know, you need to do some of the work yourself, because some things will not get done unless you do that.

Scott Mcmahon 47:13
Now you do you have any help? Or were you running solo when you were driving up? Prior to scream fest happening? I was doing this on my own, okay. And by the way, genius idea, buying local ads, because they're not that expensive. I think at the time.

Oren Peli 47:30
It costs me I think about 1000 or $1,500, to run like 60 spots,

Scott Mcmahon 47:37
You know, amazing, just amazing. And, well, ERD. So you get all this stuff. Cohen, and you had your meeting. Now, I'm guessing you're still working full time, where you just like taking personal days, as you're driving up from San Diego to Los Angeles.

Oren Peli 47:55
Yes, as I'm sure you know, we used to get like a lot of time off, you'll never had a chance to use any of it. Taking a few days here and there was no big deal. And it didn't really take a lot of time off for vacations. So a you know, I was still probably maxed out on my my PTO times.

Scott Mcmahon 48:12
Right. Right. God, I remember that. So okay, so this is all happening. So you get into slam dance. What was your strategy plan? Or did you have a team at this particular time that scene ca help you develop a team of some sort, to like, what was the marketing strategy, the promotional strategy to take full advantage of the slam dance opportunity.

Oren Peli 48:34
So by then there was a guy specifically I had, you know, my agent that was kind of like my agent for my career for me personally. And there was another agent that was kind of the sales agent for the movie. So it was his responsibility to sell the try to sell the film. At that point, I also hooked up with two producers that had access to the kind of the higher level people then the VP of acquisitions, that could get directly to the, you know, presidents of studios and, and, you know, directly get the DVDs to the hands of Harvey Weinstein, and those kinds of people

Scott Mcmahon 49:13
Was just Jason and Steven.

Oren Peli 49:17
So, at that point, I was confident that you know, what, at least one person I don't need a bidding war, just need one person to see the movie and recognize the potential and, you know, like, you always hear the stories about people who go to Sundance and sell the movie for a million bucks, and the movie gets out there and becomes the hate. So that's what, you know, I was convinced was going to happen.

Scott Mcmahon 49:40
Wow, that's amazing. Now, the producers that you had, was this at this particular time was this Jason Blum and Steven blank in his last name?

Oren Peli 49:51
Yeah, yeah. Those were the guys.

Scott Mcmahon 49:54
So they had come in at pretty much the same time ca came in, is that correct around the same time

Oren Peli 49:59
No a little bit later, my agent would send the DVD because they didn't really believe at the time that it's worth spending too much effort trying to get set equal distribution for it. They said, hey, you know, we tried, we got rejected by the studio. So let's get one of those VOD deals or DVD deals, and try to get you your next gig. So they sent out the DVD of paranormal activity as a, as a directing sample to producer to say, Hey, there's this new kid in town, check out his movie. And if you have another project that you think he might be a good candidate to direct them, you know, keeping me in mind. So when we get to Steven and Jason, they, they love the movie, they saw the potential. And then I met them and decided they wanted to come on board to help sell the film.

Alex Ferrari 50:50
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Scott Mcmahon 51:00
So we're the only ones who contacted you. Yep. Now at what point was it? Was it like, immediately you're like, I get you guys or they get you? Because I've heard the story about how Jason when he was working, I think artisan at the time or something, he he missed the opportunity to be part of Blair Witch and he never wanted to miss that opportunity again, or that's the sort of the legend that's out there.

Oren Peli 51:25
Yeah, he was working for for a for Harvey Weinstein at the time.

Scott Mcmahon 51:29
Okay, so he's now he's on his own. And he's working with Steven. He's got those old connections. They come on board, Jason sees what you have. And you guys are lining up, because they're like, you both see the potential of this being the next player which and so now you're at slam dance, and he's able to, you know, reach out to his his connections and like you said, get above the VP of acquisitions, and go from there. So did they help develop a strategy of how you're going to tackle slam dance?

Oren Peli 52:00
Well, the first strategy was that we're going to read, we're going to tweak the movie a little bit, get it a little leaner, cut No, seven, eight minutes from it. And then we can reintroduce it even before Slamdance. Until, you know, tell all the studios in town. We have a new version, we know that you saw performativity. Now we have a new, better, leaner, scarier version of paranormal activity. Come check it out. So around Christmas, I think it was a CAA organised a couple of screenings. And we invited a lot of the upper level maybe not necessarily studio heads, some of them, but the upper level executives to watch the new version of the film. And some didn't show up some digital app, but there were no sales. So we're like, Okay, well, that was a good try. Let's let's you know, wait for Slamdance and then we'll really go for the for the top dogs. Each video.

Scott Mcmahon 52:59
I see. So then, so was the Paramount deal DreamWorks deal like almost after slam dance after the response and stuff.

Oren Peli 53:11
It was a on the table before this is kind of like how it played out. The very first time that Jason saw the film after Steven site first until Jason, you got to check it out. So Jason organized a little movie nights at his place, and invited a friend of his Ashley Brooks, who was then working at DreamWorks. Just because he loves horror movies. DreamWorks doesn't really do acquisitions, they only develop their own original material. So there wasn't any. And he hasn't even seen the movie himself. So it wasn't trying to sell or anything. But it was just like, hey, come check out this weird little horror film because you like horror movies. So she saw the movie and she becomes obsessed with it. And she gave a copy to her boss, Adam Goodman, who was the president of productions at DreamWorks. And she kept bugging him, you got to see it, you got to see it. And I think it took a while before he eventually saw it probably few weeks. But then when he saw it, he loved it. And then they were like, okay, so what do we do with it, we're not going to fight and release it. And you know, we don't do acquisitions in general, we definitely not going to release this crappy little, you know, weird looking home video thing. So they came up with a proposal of a doing a remake with real quote unquote actors, and with their real budget, and they're gonna let me direct it. And I said, I'm not interested. You know, I love this version of the movie. I don't want to do a new version. I don't need a bigger budget. I didn't feel I was constrained by the budget for the film. And I definitely don't want recognizable actors because it will take away from the whole authenticity of different footage premise. So in this version of the film works for whatever reason You know, it kind of hit that magic formula. And if you do a remake, you don't know if it's gonna work or not. So I'm like, No, this is this is it, this is the movie if you like it, let's, let's talk about releasing it, but I don't want to do a new version. So they kind of kept becoming more and more interested in the film in the remake idea. And as we went to Slamdance, and got rejected, for the third time, by every studio in town, really, the only options we had was either taking one of those direct to DVD options, or going with DreamWorks and doing the remake thing.

Scott Mcmahon 55:35
Interesting. So let me ask you, so you're there. You're, you're holding strong in your line and your conviction was Jason and Stephen, behind you on your decision of like, a your vision of making sure that like, let's do this, or was everybody looking at you? Like, are you crazy? Like, you're this is your first film, you're up here, people are giving you these, this is an offer, this is an opportunity, that type of thing, or how, how alone were you? Or how supportive were you on this decision of like, let's just hold our let's hold hold our ground and try to get that theatrical release as is.

Oren Peli 56:10
Well, I think in Slamdance, everyone was kind of hopeful that something will happen maybe me more than everyone else. But I think we were all kind of hoping that you know, we will be able to make a sale. And I think the rest of my team was less dismissive of the DreamWorks offered, and I was I just wouldn't even entertain the thought of doing a remake. And everyone else was like, Well, it's, you know, directing movie for Steven Spielberg is not the worst thing in the world. You know, some people were to look down for that kind of an opportunity. But I'm like, not not doing a remake. So I wasn't, I wasn't even entertaining, entertaining the idea. I was just like, rejecting it without even thinking about it. So we all said, Okay, let's let's wait until Slamdance. And then we'll regroup. And so you know, what's the next move? And I'm like, cool, because, you know, I was certain we're gonna sell it. It's London. So I didn't think the dream works same offer will even become irrelevant.

Scott Mcmahon 57:14
That's amazing. So then you have your you regroup after slam dance, at what point did like Paramount come in? Or because I know that DreamWorks and Paramount, like you said, they were paramount was handling distribution for DreamWorks. But then the economy was really at this point. This is 22,008. Right? So that's when it started to implode, just you know, worldwide the economy. At what point did they get involved, right, like right after Sam dance?

Oren Peli 57:44
Well, basically on my airport ride from this after I flew back from Salt Lake City, to San Diego with no sail on the right from from the airport to my house, I had one of those reality check phone calls with my entire team, my attorney, my agents, my producers, and they're like, look, we tried three times to sell the movie, three times everyone in town passed on it. The only real option that we have is DreamWorks. And we know that you don't like the idea of remake, but it's really the best deal that we have. And ultimately, there were a couple of things that convinced me to consider a DreamWorks deal. One is that we really didn't have any, any other rare opportunity. And the one other reason, by the way that I didn't want to consider the DreamWorks deal at all, is I didn't want to replace the actress because Katie and mica did a fantastic job there. They're the reason that the movie worked. And I thought it would be extraordinarily unfair for them to just get dismissed and replaced by you know, other actors. And and it would be really unfair if people didn't get to see you know, what a great job they did. So the deal with DreamWorks was that on the if the movie gets done and gets made, and then is released on a DVD, part of the DVD release will include the original version with Katie and Mica. So I thought you know if Karen mica are okay with that, I'll consider that. And the other thing was that before we move forward on the remake, we can make the deal but before we actually get started with pre production, and we had we make it a screening for DreamWorks, and all day, you know, top executives of Dreamworks, everyone, basically, except for for Steven Spielberg, will have to be there. And we saw that, you know, maybe if the cause, you know, the executives are doing worse. They've seen the movie, you know, on a DVD player in their office or at home, and we wanted them to see it within audience. So I Even though I made the deal for the remake, I still haven't given up on the option. I haven't even really attended any meetings to talk with potential writers or anything like that I'm still I'm still on the track of the fiasco, which is probably still going to happen, because they're going to watch the movie, how it plays with a real audience, and then they're going to change their mind.

Scott Mcmahon 1:00:21
So who who got that going? Like said, Okay, let's, we got some time here. Let's let's set up a screening for the executives, I'm assuming was in Los Angeles, and how did you round up the kids or the midnight, you know, college kids or something like that to be part of that audience.

Alex Ferrari 1:00:39
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Oren Peli 1:00:50
It was part of the deal. So there was a lot of time we weren't going to start shooting right away. So you start developing the movie and interview writers. So the deal was that before we find a writer, we have to do a test screening. So I think it was in, let's say, Slamdance. Was it the middle of January? I think the test screen was in March, probably the March or April or so a couple months later. And it was just a regular test screening, I think NRG, you know, did their standard recruitment. And you know, when people stand up sort of theatres and say, Hey, would you like to come to a free movie screening? So it was exactly one of those and I think it was in either Pasadena or Glendale? And then yes, and that's when when he called saying,

Scott Mcmahon 1:01:38
Okay, so and then they saw the reaction, because it's the proofs in the pudding. There it is the audience reacting. So this is March and stuff, and like, so I'm assuming, again, you are bouncing from San Diego to Los Angeles all the time. And I'm assuming that sometimes this was like, last moment, like last minute. So you would have to arrange not being at work once in a while?

Oren Peli 1:02:01
Usually is not a problem. The really tricky one was Slamdance. Because that's in January. And that's when, you know, we're in crunch mode for the MLB game, right? So I was current on my task I wasn't behind. And I told by my superiors there that I need some time off. And they were like, Oh, is it like a medical emergency that family emergency? I'm like, no, they're like, Well, is it? Well, when what is it I'm like, none of your business is because I didn't want to lie to them and invent some sort of, you know, family medical emergency, but I didn't want to tell them. And I told them, Look, I know what I need to do. And I know that I can get it done in them ahead of schedule. And I'm only going to take a few days off. So don't give me a hard time. And they were really, really pissed by the day ended up giving me you know, a few days off. But yeah, there was a time it wasn't a problem to take, you know, a few days here and there.

Scott Mcmahon 1:02:55
It's interesting. Yeah, I remember hearing this. Back then I now you know, Amir, is there still right? So he, he's the only one knows. Me, right? That's awesome. Okay, so you're bouncing back and forth. You're, you're managing your full time job. The pressures of game development, definitely, when we talk about crunch time, which is almost like, like, you know, 17 hour locked down until like, the game gets pushed out. Which is insane about the video game industry in the video, visual effects industry or anything. So now you're up there. And it's going going well. So I'm going to kind of fast for a little bit to what point does the strategy of like Les released this at a few cities in the midnight screening to to generate the buzz like, Were you involved with those meetings? Or how did the marketing department come into all that stuff?

Oren Peli 1:03:50
So we skipped I didn't finish answering the previous question. How am I becoming involved? So we make a deal with DreamWorks to release the movie in the fall of 2008. And we have a deal like, holy shit, this is it. We made it I have a studio releasing my movie. And that's when DreamWorks and parrots started having problems at a much much higher level. I know some personality conflicts between Sumner Redstone. And Jeffrey Katzenberg, I don't even know what it was. But whatever it was, they said, You know what, we're not only we're going to we're going to be working together. We are no longer going to be distributing your movies. And then some people are selling the executives at DreamWorks left to work at Paramount, including Adam Goodman in Estabrooks, who were kind of like the champions for the movie. And there was sort of like a custody split a DreamWorks and Paramount I'm imagining them sitting all in one big conference room with a list of you know, all the movies that they have in development and think okay, you We'll take this you can have this one, we'll take this one, you can have this one. And they kind of divided the loot of, you know which projects they had about to be released during development and add them in athlete to paranormal activity with them to Paramount. So now we're basically starting from square one because it's paramount. No one gives a crap about my, you know, little home video looking film. They're dealing with Mission Impossible and transformers and Star Trek, you know, who is stuff from my movie? So it was probably about a year of nothing happening. I think, a year. Yeah. Yeah, it was from the summer of 2008 until the summer of 2009, where I'm just sitting and wondering what's going to happen. And I kept bugging my Ethernet ca and they were like, well, there's going to be a meeting at Paramount in two weeks when they're going to talk about the movie, like okay, okay, good. Excellent. Two weeks, I can wait two weeks, two weeks go by, I checked with my agent. Well, well, what happened at the meeting, the meeting was cancelled, but they're gonna have it in two weeks. Okay, I can wait two more weeks, two more weeks go by, well, the meeting happened and they talked about it, and they haven't reached the conclusion. They're going to talk about it again in a month, and just month after month. And you know, I'm just going insane. There was a lot of heat on the movie. But now we're kind of stuck at Parramatta can stick it anywhere else. So I'm just sitting there and the movies is, you know, held in limbo. And, you know, there's like this sense of helplessness, there's nothing I can do. Just sit and wait.

Scott Mcmahon 1:06:32
Yeah, I was curious, if you are from a high, like, this is like, march 2008, or something, you're with DreamWorks, you're gonna get the distribution deal. I'm sure you're celebrating with friends and family. Just something like, you know, almost like an out of body experience. I can't believe this actually happening. And then, like you said, a year, almost a year later, I mean, watching this thing sort of slowly erode when you hear about the split. And so at what point I mean, you're still working at Sony then right? And you're still just, you know, doing this. You know, I don't know where your headspace is your emotional space? How did you manage all that stuff within the year of limbo like that?

Oren Peli 1:07:17
I mean, it sucked. It's like, a big time because they, you know, it sounds like, you know, something was dangled right in front of me. And now it's kind of yanked away. And I couldn't lose faith that we've done this far and got this close, and it's not going to happen. So I knew it was going to happen one way or another. But it was it was pretty maddening to have to, you know, wait for it. And, and, you know, that definitely, you know, still working at Sony at the time was becoming less and less exciting.

Scott Mcmahon 1:07:48
Yeah, I can imagine, I'm sure your heart, you're, you're mentally, you've already almost sort of checked out. Because I give something as dangled in front of you. I mean, this is like, this is the dream. This is like the ultimate dream of any filmmaker, like what what happened to you. And what you what's transpired is, is what everybody young, young and old filmmaker dreams of, and to hear this, you know, more detailed and emotional ride of this journey is just revealing to say, okay, so you have this month, I'm sorry, this year. So what point did it when did the light happen? When did something just break where you were able to, you know, finally, know that, you know, maybe you got the check in the mail or something that happened?

Oren Peli 1:08:34
Well, there were several stages. The first one was a on my birthday in 2009. And I keep joking with my agent, and my, my producer was like, Okay, today's my birthday, this will be good time for some good news. And it was a Friday, and nothing happens. And at the very end of the day, it's like 630 or seven. I get forwarded an email from an article on deadline, be the subject, happy birthday. And the article is that a couple of the higher ups at Paramount, just got fired. And Adam Goodman just got promoted from President of production to President Of paramount.

Scott Mcmahon 1:09:14
Oh my God.

Oren Peli 1:09:17
And the next day, the next morning on Saturday, my agent forwarded me an email that he got from Adam Goodman, and the email says, towards paranormal activity. I'm like, Okay, this is all good. No, no things can you know, pick up again,

Scott Mcmahon 1:09:34
I have I'm living through this with you right now. I mean, I can I'm just hearing your stories but I can imagine like your birthday and hearing that Anyway, keep going. This is fat fabulous.

Oren Peli 1:09:43
So after this thing has happened really quickly, the next week, we set up a test screening for the you know, everyone is paramount, their marketing department, the vice chairman, and again, that is that, you know, once everyone sees how the movie plays with an audience, they'll get I'm bored. And so a week or two later, we had the test screening. It went great. You know, and then Paramount is like, okay, awesome, we'll release it, we're not gonna put any money behind it.

Alex Ferrari 1:10:15
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Oren Peli 1:10:24
So basically, you have to figure out what to release it for free. The good news was that the Paramount didn't have any movie coming out that fall at all, I don't remember what it was, but from June, until like November, or something like that, they didn't have a single film or their sleep. So the entire marketing department could focus just on paranormal activity, and how to come up with a cheap and smart and creative ideas to get publicity for the film. Without actually spending any money. I think the original PNA budget was about 700k. So which is like nothing for a release of film, usually, it's you know, more like 20 or 30 million. So that's how they come up with the ideas of, you know, the demand dates, and the limited the midnight screenings and all that kind of stuff where they could get a lot of free publicity, and a lot of mileage out of, you know, very little cash. And it wasn't until after the film started by becoming successful into the screenings that they agreed, okay, now we can pour a, you know, real resources into the marketing.

Scott Mcmahon 1:11:40
This is this is fat fascinating, because this is talking like you said, it's like going to stars and lining up. But like, what were those sorts of meetings like when now you have almost like all apparent mounts, marketing, brain power, but no money power behind it. So you just have this brain power, creative power to go, Okay, let's do in the same spirit of paranormal activity, the movie, which is that's made for you know, nothing using the resources in front of you. Now, the marketing has to be done the same way. How involved or how creative does like your producing partners, Jason Blum and, and forgive me again, Stevens last name. How do you a Schneider Schneider? Thank you. I wrote it. I scribbled it here and I, I can't even read my own handwriting. So How involved was that group with sort of, like the marketing's decisions or in contributions and things like that?

Oren Peli 1:12:35
I mean, I wish I could take more credit for a, you know, the marketing, but I would say that that was all a paramount, specifically the Paramount interactive marketing, headed by Amy Powell at a time, and a lot of other great people there. But it was really them. I mean, they kept us involved in what's going on, but the mandate and the Bennett screenings and all that kind of stuff that came from them. And you know, we might have had some ideas here and there to add, but it was really all them so I can't take any credit for it. But everything that they presented, we loved we thought it made perfect sense to not make it feel it, we felt like this approach could actually work to our advantage. It's a very similar approach to what exactly worked for Blair Witch Project starts small. And at that point, I had confidence that the word of mouth will, you know, help get the movie, a lot of awareness and recognition. And to kind of keep a sense of, you know, the fans are discovering this film, it's not pushed on them by a big studio. It's just being discovered a, you know, by the ground roots level. So we when Tamar told us, you know, this is what we're planning on doing. We're like, we love it. That's genius. You know, keep going.

Scott Mcmahon 1:13:53
Amazing. So what what are you doing during this time? I mean, you know, you're not like living paranormal activity. 24/7 obviously, you have a job. Were Were you already at what point did they have you start working on other projects or or you know, creatively what, what are you doing spending your time or you know, on in the year that this was on this roller coaster?

Oren Peli 1:14:15
Well, during that time, it was a until a until right about the time that we did a test screening, I was still working at Sony. And then I actually ended up getting fired right before the test screening.

Scott Mcmahon 1:14:30
I didn't want to go there. If I wanted to get there eventually when I heard the story was like, okay, so yeah, Oren just kept taking personal days, left and right, left to right. And he wouldn't tell anybody what was going but just kept, you know, just not being there. And they were during crunch crunch time. And then and then somehow they found out exactly what he was doing. Like he had this movie and he was doing all these festivals or screenings, and then they fired them. And then like the next day, Paranormal Activity blows up and your Hollywood lead gin. And so hearing that story from like, my brother and some other people, I was just like, amazing. I was just like, just because I was like Leko from Sony fired in the beginning of oh seven when, like everybody was getting fired. So anyway, I vicariously live through you going, thank you thank you for doing being able to succeed in that way.

Oren Peli 1:15:27
It wasn't as a is this as you described it, they found out about the movie in soon, I'm sorry, in January, and I wasn't fired until June, to fire someone, you have to go through the process. First of all, they wanted me to finish, you know, at the release of MLB. So they weren't going to, you know, even mentioned the possibility of firing me when they still needed me. But after we released the movie, then they put me on the peak performance improvement plan, which is their way of getting you fired. So I knew I was, I knew I was on the way out anyways, they gave me a six tasks to do in two months, and five of them were reasonable. And I guess most of them run right away. The other one was totally unreasonable. And there was a one program or the spent several months trying to implement that. And it failed. And there were there was a team, that technology group, several people there tried to implement it over a course of a few months, and they couldn't do it. So they will try to get me to do it and tell them this is unreasonable. It can't be done. No one's been able to do it. And by the way, now, with the benefit of hindsight, even five years after I've been no six years, however long it's been since I've been fired, and no one has still implemented it. So it's obviously they just set me up to fail. So during the time, I took some time off, I still had probably 40 or 45, vacation days accumulated. So it's not like I didn't have time off. But then they started playing games with me and didn't want to give me time off. I'm like, Well, I'm gonna take it off anyways. And then they fired me.

Scott Mcmahon 1:17:06
Oh, my gosh, so did was Did you get a deal already in place from your team? Like, I mean, did you have already there give like some cash in the bank? Or did you not see anything from paranormal activity until it was released or something? I don't want to get in details, but I'm just curious for just kind of living again, vicariously saying, like, I've got this whole time job, I gotta keep going until I know that steel was set in place.

Oren Peli 1:17:28
Or I didn't get anything from Paramount until after the movie was released theatrically and blew up. But I don't remember the exact timeline. I don't remember if it was while I was still at Sony. I'm pretty sure it wasn't, I'm sure it was after it was already done with Sony. But money started trickling in from the foreign sales deals that we did. So there was a little bit coming in, before the movie was released theatrically in the US.

Scott Mcmahon 1:17:57
Okay, so how was it emotionally being fired? Was like, almost like a relief? Like, like, Okay, I'm free. So you can focus on the movie? Or was it still stressful?

Oren Peli 1:18:10
There wasn't much to focus on at this point, it was out of my hands. And, you know, it was all up to Paramount. So there wasn't much for me to do. But to some points was the sense of relief. I mean, I knew I knew they were firing me one way or another. So it was like, okay, you know, I knew it was coming, you know, so I just hit the, you know, figured I'll have a long vacation until the movie gets out.

Scott Mcmahon 1:18:34
So again, like, during this time, where there's this discussions about other projects, they wanted to work on like, the JSON and Steven wanted you to work on or was it just all 100% Paranormal Activity?

Oren Peli 1:18:47
Well, let's, let's put for this particular interview. Let's limit the discussion on two prominent paranormal activity.

Scott Mcmahon 1:18:54
Oh, yeah. Sorry, I, I didn't mean to get you into any other projects. Not nothing specific. Because I know that your policy about talking about stuff that you're working on, you don't get into. And I didn't mean to get into that. I was just mostly I was supposed to be keenly aware like that there was projects like that there was other stuff you didn't you don't have to tell me specifically. I was just curious, like, you know, how you deal with your time off between these, you know, waiting for that big release?

Oren Peli 1:19:18
Yeah, there was definitely discussions and you know, my agent would send me scripts every once in a while to read. So yeah, I would try to find ways to keep myself occupied.

Scott Mcmahon 1:19:30
Okay. Okay. Cool. That's all I needed to know. Sorry, buddy. No problem. So yeah, so then parallel activity happens. I mean, it wasn't too much longer after being let go at Sony that thing blows up. Right. I remember kind of trying to see the timeframe here.

Oren Peli 1:19:47
Yes, it could. The first screenings started in mid to late September and it kind of blew up in October from what I remember.

Scott Mcmahon 1:19:58
Yeah. Casas October. row nine or 10.

Alex Ferrari 1:20:03
We'll be right back after a word from our sponsor. And now back to the show.

Scott Mcmahon 1:20:12
Oh nine. Okay, well, nine. So there it is Christmas. So Halloween time fall. And then you're still in San Diego, you're standing to base your experience living in San Diego and always driving to La Did you always feel like you can decompress from the LA bubble? Because you know, LA is like this weird vortex of like, like hype on a machine, like on the highest level. And then you know, getting out of the city kind of mentally you're able to get a perspective. I don't know, if you had that same experience or feeling

Oren Peli 1:20:46
I know exactly what you're talking about. I feel that way. No, now I spend most of my time in LA. And when I go down to San Diego, part of is to kind of mentally check out and relax because San Diego is even though it's only you know, 100 miles away, it could be you know, a world away from from Hollywood, it's a very different atmosphere, it's very mellow, very chill, you know, very cool vibe to it, as opposed to kind of the craziness of the League, which is both good and bad. At the time, though, I'm feeling like Okay, so now I'm pretty much transitioning from my old life in San Diego, and I needed to be in LA more to, you know, be involved with, even though, you know, it was out of my hands, and Paramount was a in charge of things, there would still be occasional reasons for me to come up too late for meetings, that kind of stuff. So it felt a little, like a little bit of a handicap that every time I have to drive up and drive down and figure out where to stay. And, you know, a lot of them I would stay at Jason's a guesthouse with, you know, saved money on hotel bills, but it was still a hassle. I didn't have like my own place. So after a while, I ended up renting a place in Italy, so I can just be there. And because otherwise, I always felt like I'm out of the loop, you know, being in San Diego.

Scott Mcmahon 1:22:05
Interesting. So I'm gonna kind of fast forward so you see the stuff developing and, you know, it's becoming a hit. And it's you're getting press, I'm assuming you're gonna you're getting calls and doing the interviews and all this stuff starts happening? Do you even have time to catch your breath of like, when it's when it's all just like, all this heat comes on you?

Oren Peli 1:22:29
Not much, it was a pretty crazy period of time. And you know, I'm doing publicity when the movie gets released. And I'm getting flown around the world, which is both, you know, exhausting and in fun. So it was definitely a crazy insane the period of my life

Scott Mcmahon 1:22:47
in how long did it last like, so we're talking about like, October to,

Oren Peli 1:22:53
Probably like in January.

Scott Mcmahon 1:22:55
So we were talking about so you've had this dis your world when your life just got flipped, flipped around with the success and seeing it for real that the movies out in the theaters, and you're being whipped around to city and interviews and, and all this type of stuff? What was the support system, like with your friends and family? Just you know, was? Was there like a moment of like, just a private like, oh, my gosh, you know, this is it, this is happening, it's happening. And then all of a sudden, then this is work?

Oren Peli 1:23:27
No, it was all good. I mean, everyone was, you know, stoked for me. And you know, my parents are proud of me. And you know, it's all good. And I'm financially secured. So I don't have to worry about working at Sony or anywhere else ever again. So I'm like, This is good. Awesome. I made it, you know, I won the lottery,

Scott Mcmahon 1:23:47
You did a for the second time you got your VCR. And the second time, let me ask you, at what point, I don't want the details, but just sort of the emotional ride when you I don't know, maybe like a large sum of payout was given to you where you realize, oh, my gosh, like you said that you now you're at this place where I don't have to worry about working at Sony and doing crunch time anymore. I am a Hollywood director and I have this chunk of change that my life has changed. Like, was there like a moment like that or a private moment? Or did it happen gradually?

Oren Peli 1:24:22
Again, I mean, it's gradually because I knew how much I was going to make based on the performance of the movie in the box office. So every week that it does better and better. I'm thinking you know, in my head, you know, touching and then you know, later we actually get the check so I knew how much money was was gonna be due. And but yeah, I mean, it was definitely nice to actually have it in my hand and in my bank account, but I knew throughout the process that you know, I knew exactly what I was gonna get.

Scott Mcmahon 1:24:56
Amazing. And now that this is Raiders. So now you had this moment and it's here and you are part you, you're part of Hollywood history. I mean, this is historic, and everything now for the last seven years, so we'll we'll reference back to, you know, Blair Witch paranormal activity. And with the franchise, and I don't necessarily, you know, we have to get into all that stuff, I just have to wrap it up here. Because you've, you've taken us to this journey, which is something that I know myself and my audience would love to hear. And I thank you so much for sharing that with us. So just kind of wrap it up of like, this is your hero's journey, you know, you went from a kid from Israel, and then all the way, you know, worked your way through in the video game world and America and then became a film director and the legendary one in that respect, and a successful one. But even with all that set, that kind of stuff. Now, what is sort of like, the one important thing that you realize just about life, like no matter, like all this kind of stuff, like is there like an advice I can give somebody, no matter where they are in their in their life of just, you know, if you were like some kid walking by like to give them this one bit of bit of advice.

Oren Peli 1:26:19
I mean, I took a very specific route that that worked for me, it may not work for everyone else. And there are definitely many other ways of doing well in the industry. So I'm not saying that, you know, my advice is good for everyone. But I've always been kind of a do it yourself, kind of guy, I never really liked schools, I don't think going to school is a plus, for me, it's not an efficient way of learning things. I learn things much better on my own, or with friends, at my own pace. And I believe in doing things yourself, I don't know if you know, the story of the first entrepreneurial thing that I've done, which was when I was 16, I quit high school and wrote a paint program for the Commodore Amiga, and then got it sold in the US and made a pretty nice money for, you know, a 16 year old musical. So I kind of already had that. A confidence when I depend on my activity this year, it can be done because when I told you know, everyone in in Israel when I was 16, I'm quitting High School, because I'm gonna write this piece of software. Everyone was telling me that I'm crazy. And who are you this 16 year old kid gonna sit in your bedroom apartment, a new apartment, bedroom, and write, you know, software to compete with the big help with the big companies in the US? And I'm like, yeah, why not. And everyone's kept telling me that I'm crazy. And I'm wasting my time. And I'm throwing my life away, which is one of the reasons that it's when I did paranormal activity, I didn't tell anyone that I was doing it, because I didn't need to hear anyone, everyone telling me that I'm crazy. And for you to, you know, film the movie, you've never filmed anything before. So what makes you think you'll be able to compete with the studios. So I'll say that it's better to just not tell anyone. But that has kind of worked for me the idea of, you know, you have an idea in your head, you figure out how to do it, what you don't know how to do you either learn or delegates to someone who does. There was, you know, I try to do almost everything in paranormal activity on my own with the Emir and my girlfriends. But as an example, one thing that I couldn't figure out how to do was makeup, I tried to do it on my own, because I wanted to do everything on my own. So I went online and bought all these makeup kits, and I tried to apply it on myself, and I just couldn't get it done. So I'm like, You know what, I'm gonna have to, you know, get a makeup artist. So I found the makeup artist and hired her for a day and she did a great job. So the point is you need to do you need to know what you can do and what you can't do, and kind of recognize your own weakness and strength. But at the end of the day, you need to really be stubborn and really have perseverance. And then it also takes a lot of luck and timing if it weren't for, you know, all the different things that happen the right way with Curiel baru, watching the movie at Scream Fest and giving it to CAA and Ashley Brooks being there, you know, during the screening at Jason's house, and all the different, you know, things that had to happen at the right moment in time, doesn't matter how great the movie would have been. It still wouldn't have happened. And sometimes even if all the things are, you know, fully in the right place, there might be another reason that, you know, things can get ahead. So, there's never any guarantee and you know, the best thing you can do is just keep trying and you know, be really diligent about the way you do things. Make sure you're doing things as best as you can. And hope for the best but there is no real you know, formula. I can only say you know this one a I got lucky with

Scott Mcmahon 1:30:04
Yeah, it's but still well deserved, I had no idea that you were actually, it mentioned in your bio that you worked on, like the Amiga paint program. And I think actually, my dad and I actually worked on that program years ago. But but I had no idea that that's the entrepreneurial spirit you've had since 16. That's, that's fascinating, that actually shows quite a bit of character and makeup of why, you know, paranormal activity is such a success. And it is a really fun, fun film. So congratulations on that. And thank you for the job, job well done.

Alex Ferrari 1:30:39
We'll be right back after a word from our sponsor. And now back to the show.

Scott Mcmahon 1:30:50
I'm gonna wrap it up, just because I've taken up way too much of your time, and I just can't thank you enough. There's so many other questions. I know. Like, you know, I didn't really get into like, just what that meeting was like with Spielberg. And, you know, when you first finally met him, you know, in person, and whether or not he you, and he discussed about anything about your, your experience living in Israel or not just because I know how involved he is with his Jewish faith and so on and in the plant of Israel. So I was curious about that kind of stuff, too. And then I know that I have fans that would want to know, just like, kind of what your thoughts are about the future of the industry, especially with Spielberg and Lucas coming out talking a couple months ago about the implosion of the industry. But it sounds to me being that out, you're in ingrained with an entrepreneurial spirit, no matter what happens, you will figure it out. So yeah,

Oren Peli 1:31:49
I left the real festival about Spielberg just because it was a pretty surreal experience. I was probably like, the first really surreal experience was, if we rewind back to the test screening that DreamWorks did when we were still talking about the remake. So after the test screening, Adam Goodman and Stacy Snyder, who was the chairman of the works, you know, we're at the lobby hanging out and they're saying, yes, you know, we'll release this movie, and forget about the remake. We just need to get the okay from Spielberg because, you know, any movie that gets relisted with remorse he needs to personally okay. So I'm like, Oh, shit, okay. Back to sitting and waiting. And a couple of days later, I get a call directly from Adam Goodman, which is already very unusual. Usually, I would talk, you know, to everyone through my agents for my producers, I would never get calls from any executives, much less the head of DreamWorks. And he's some already kind of nervous on the call. And he's like, Well, Oren, I want to let you know that we love the movie. And as you know, we wanted to have a okay from Spielberg. So he started watching the movie last night. And he stopped halfway through. And like, in my heart sinks. And then he continues after a deliberate pause, because he got too scared. And we finished watching the movie today. And he loved it, and we want to release it. So that was like the first surreal, really surreal moment that I'm like, oh my god, Steven Spielberg, watch my movie. And I was like, instead of sock sock for a few hours after that, and immediately called Katie and mica, and you know everyone else to tell them. So. And then later when I met him, which was while paranormal activity was in relief, he couldn't have been nicer. He was just like, this sweet, nice guy that loves movies. And we talked about movies. You know, we talked about paranormal activity, and we talked about his movies. And we did actually spend a lot of time talking about Israel and politics, and we're just having a friendly conversation. And everyone's going, well, I need to like a pinch myself, like, holy shit. I'm talking to Steven Spielberg. Because, you know, he was like, so friendly, that we're just having, you know, a nice flowing conversation about a whole bunch of stuff. So it was definitely a great meeting.

Scott Mcmahon 1:34:13
Good God, how long was the meeting like an hour? Or

Oren Peli 1:34:17
A more, probably more or less? No and a half to two over lunch?

Scott Mcmahon 1:34:22
Good for you how I can I'm just I just want to scream go. Orange. Congratulations. It's, it's been a pleasure having an opportunity to work with you so many years ago, and you showing us kindness and support and just enthusiasm for what we wanted to try to do. And then to see your story develop is inspirational. It's, it's it was like when I heard about it when I was following it. And you know, I know that my younger brothers was closer to you. So he was just filming in these things. I'm just and it was just so I don't know, it's just it's, it's, it's an uplifting. So, all the successes, duty and keep going and maybe I'll get an opportunity to do like a follow up interview, as you know, maybe another project comes up or something, but I can't thank you enough for your time today. And just really kind of, I honestly, I'm a fan of all these types of interviews, but I never hear anybody get into the nitty gritty like this, which is why I wanted to kind of go through it kind of step by step and get into the emotion stuff. Because you never hear about you always hear like the gloss over, like, like to hear your gloss over, like, oh, you know, he worked on this Amiga program. And then he then he made this little film, and then he got this distribution deal and in there, and they got this huge franchise, like, that's kind of like the gist of it, but like, hearing what you had to go through and the emotional ride of it. It's just impressive. Anyway,

Oren Peli 1:35:43
Maybe in a few years, I can give you even more, you know, juicy details that, you know, still can't talk about but yeah, I'm definitely glad to help. Like I said, you know, I, my experience at Sony, especially the last year was was very miserable. There was so many douchey people there, you know, like when the watch shows, like, office space or Silicon Valley, you know, the new ones from like, judge or the office, they were like, so many nasty characters that I recognize from you know, my own life. And I definitely remember you know, you and your brother being the good guys, so very happy to help

Scott Mcmahon 1:36:22
Thank you so much. And I agree like it's weird in the corporate world because when it gets stinky and and and illness like it's weird, like just true colors of everybody sort of just reveals themselves. And it's you can you can feel the stench, and it's a terrible place to go into when, you know, sort of like that death of like, eventually somebody or everybody or half the people are getting Blekko, you know. Anyway, but hey, well, thank you so much. Have a great Friday and a great, you know, just weekend and I I'll ping you when this is up, and I'll just clean it up a little bit. But thank you.

Oren Peli 1:37:01
No problem. Have a good weekend.

Scott Mcmahon 1:37:02
Okay. Thanks for watching. Bye bye.

Alex Ferrari 1:37:06
I want to thank Scott so much for doing such a great job with this episode. If you want to get links to anything we spoke about in this episode, head over to the show notes at Indie film hustle.com forward slash 670. Thank you for listening guys. As always, keep that also going keep that dream alive. Stay safe out there. And I'll talk to you soon.