Made for an estimated $11,000, Paranormal Activity follows the model set forth by The Blair Witch Project, utilizing non-actors, limited sets and a small handful of thriller moments to create a tense, if somewhat faulty, chiller. The central conceit of the film is simple: Micah and Katie (Micah Sloat, Katie Featherston) are haunted by a demon. In an effort to document their problems, Micah invests in a video camera and uses it nearly all the time. And that is how the first half hour of Paranormal Activity plays out, as an attempt to introduce the characters and situation to the audience. From there, writer/director Oren Peli slowly weaves in the scares, at first small sounds and eventually culminating in...well, that would be ruining it.
Perhaps by design, Peli doesn't allow either Micah or Katie to really develop as characters. There's nothing to really tell the audience what makes them tick or why they're actually together. It might not be completely necessary, though looking back at the classics in the horror genre, each have allowed their characters to become people as opposed to caricatures. (Blair Witch-this film's obvious inspiration-is an exception.) Why does this really matter? Knowing and therefore caring about the leads heightens the impact of each scare above and beyond what we'd experience otherwise. Again, this may be by design. Not knowing anything about the two adds to the anonymity, not to mention the alleged "true story" nature of the film.
Here's the rub on the way the film is shot. Everything we see comes from Micah's video camera, meaning he or Katie have to grab it whenever the action shifts to another location. I have to ask: if someone you care about is screaming bloody murder in another room, are you really going to stop to grab a camera before going to help? Even if you need hard evidence something is going on? Far more realistic is either calling a news crew with multiple cameras or buying them yourself to monitor all the rooms at the same time. Is that a nitpick? Probably, though even Katie takes Micah to task over his use of the camera, making it less of a nitpick and more of a conceit.
What the film does extraordinarily well is using night vision filming inside the bedroom. With the camera positioned at the foot of the bed, Peli is able to stage most of the scares very simply and easily. Night vision almost by definition means the room is seen in an eerie blue/green, heightening the scare factor. After all, that is why most horror movies take place at night: for the thrills to work, we can't see what's behind the door, in the next room or in the corner. Peli lets us "see" what's there, for lack of a better term, even if it doesn't help. This, I'd argue, enhances each scare. There are only a few things which could happen in the room and our eyes inadvertently dart from one to the other, simply waiting.
And that's the beauty of Paranormal Activity in the long run. The movie is a success based purely on economics, but it's also a triumph in viral marketing and expectation. Relatively little "scary" happens in the first part of the story aside from a false alarm and a couple house noises which may be completely normal. It lures us into a false sense of security, as if the entirety of the thrills come from benign little things so when the big stuff begins, it pales in comparison, effectively jolting the audience (not to mention Micah and Katie). As a function of the budget, the cast is kept extremely small and precious few sets are used. In fact, the camera only ventures outside once. The rest of the film takes place in their house. Not only are they trapped with this demon, but so are we. Based purely on the rules laid out in the story, there is nowhere they can actually be safe.
Now, with that being said, they can do a hell of a lot more to help themselves. Remember how, in older horror films, the nubile young female runs into a closet to escape the killer, with the audience knowing it was the wrong place to go? Also remember how Scream made fun of those conventions? No one runs the wrong way in Paranormal Activity, per se. That ends up being the biggest issue: characters performing well below audience expectations, especially when life and death hands in the balance. (Similarly, it doesn't help that the biggest and best scares come in the last 120 seconds of the film. The filmmakers are trying to play with our expectations, to be sure, ramping up what they show ever so slightly. But man...to make the audience sit through 90-something minutes of amateur home video like Cloverfield to get to the good part? Not the best idea.)