A New Model: The Micro-budget Studio Picture

Paramount is doing something revolutionary, and it couldn’t be better news for aspiring filmmakers.

Last week, the studio announced the creation of its new arm, Insurge. Working with a mere million-dollar budget, the studio will produce ten films over the coming year, each with a budget of no more than $100,000. As this leaves virtually no money for print and advertising costs, the studio plans to promote the films via social networks like Facebook and Twitter, and most importantly through word-of-mouth.

In the last few years, specialty film distributors — New Line, Miramax, Picturehouse — have been rendered all but nonexistent as studios turned towards the potential blockbuster as a more effective way of making a quick and hefty profit. If it isn’t capable of grossing $200 million over the length of its run, if it doesn’t star a cadre of A-listers or boast incredible special effects, it’s generally not of interest to a studio. Just last year, Paramount shuttered its own specialty arm, Paramount Vantage, even though in the past it has released critically acclaimed films like “Oh Brother, Where Art Thou” and “There Will Be Blood.” So why the sudden change of plans for Paramount?

Two words: “Paranormal Activity.” The little thriller that could, shot on a mere $10k budget, took in $22 million its opening weekend and to date has grossed over $100 million dollars. It has spawned a series of copycats and Brian de Palma’s even rumored to be directing the sequel. Suddenly the question on everyone’s lips became, “How do we replicate this success?”

Paramount’s answer to that question is Insurge, and while they may have their eye on the bottom line, implications for unproven filmmakers — working on borrowed time and favors — can’t be overstated. Paramount has publicly stated that it will be scouting new teams of filmmakers to produce new, original films, mostly in the relatively low-budget genres of horror, comedy and animation. Some may be released theatrically, others remade with bigger budgets, still others useful primarily as a calling card for the filmmakers as they attempt to attach themselves to projects elsewhere. The LA Times goes more into depth about Paramount’s plans here.

Insurge isn’t in the business of acquiring already produced films, by the way, as is the norm with specialty film distributors looking for product on the cheap. They aren’t looking to pick up low-budget movies at film festivals or through word-of-mouth for distribution, as “Paranormal Activity” was. This is original content, developed and produced for Insurge at absolute minimal cost, and distributed by Paramount. It truly is a unique business model.

The real test will come when it comes time to see how said model works. Will social networking and conversations in classrooms and over coffee cups be enough to fuel interest in a movie that has no way of marketing itself through traditional means like television spots and giant billboards? Was “Paranormal Activity” lightning in a bottle, or the first sign of a sea change? Studio executives — and the rest of us — wait with interest to find out.