Paranormal Activity, a hyper-low-budget haunted-house horror flick from first-time director Oren Peli, has changed filmmaking forever - if you believe the hype.

An impressive, not entirely successful exercise in minimalist filmmaking, the faux-documentary is about a twentysomething couple besieged by a demon.

It has an interesting one-man-with-a-camera gimmick and it delivers some real thrills - without any gore and virtually no violence.

That's no mean feat, considering that Peli shot the film entirely in his own house over seven days - using just a home video camera - for the ludicrous, bargain-basement cost of $15,000.

Ironically, the story behind his film has proven more interesting than the flick itself. If Paranormal is anything, it's a masterpiece of promotion.

The media can't stop talking about the film. It has been dubbed a phenomenon and compared to the 1999 low-budget sleeper hit The Blair Witch Project. (At $100,000 the budget for Blair was substantially higher.)

Stories have recounted with almost mystical awe how Dreamworks boss and mega-director Steven Spielberg was so moved (and frightened) by the film, he helped greenlight a big-budget remake to be directed by Peli. But producers were sufficiently impressed by test screenings, they opted to release the original version instead.

Paramount Pictures began a PR push in September by showing the film in 13 college towns across the country. It invited fans, via eventful.com, to "demand" it be released in their town. Once a million fans voted online for the film, it would get a general release.

By Oct. 3, the film was selling out at 33 locations in 20 markets. On Friday, the film, which had grossed $1.6 mil, was expanded to 44 markets, including Philly. It went on to become the fifth-highest-grossing film over the weekend, making $7.1 mil.

Paramount announced the millionth fan voted online for the film on Saturday, so the film will get a general release across the country on Friday.

The studio's carefully executed viral campaign created the powerful illusion that interest in the film was building entirely on word-of-mouth. (The intense media coverage didn't hurt, either.)

Some fans outside a screening Friday in West Philly said the flick had underground cred.

"It's an indie movie," explained Havertown's Anthony Schrader, 22. "It's had less filtering by Hollywood, which always suger-coats mainstream horror."

Isabelle Trudeau, 30, and Pablo Delion, 28, of Philly's City Avenue area, said they decided to see Paranormal after hearing radio coverage of the film-as-phenom.

Similar reports on MTV motivated self-described West Oak Lane horror film fanatics Tuesday Carroll, 38, and her three teenage daughters. "It looks really scary," Carroll said, laughing. "We heard it was like the scariest movie."

Fans were mostly positive. "I think she had her eyes shut for a lot of it," said Cody Felton, 23, of Quakertown, pointing to his companion, Tessa Horst, 22, who was visiting from Boston.

"Well, half of it," Horst said, laughing. "I've never seen a movie this scary before."

Felton, who heard about Paranormal on the radio, said the film worked because "it seemed so realistic, unlike your typical horror movie. It actually seemed as if it could really happen, which made it so much scarier."

South Philly's John Colter, 21, wasn't so convinced. "I didn't like it. I don't like movies that are like Blair Witch. It was just boring," he said. He admitted the film "was a little freaky. . . . [But] it was like, 'OK, the door moved a little.' "

Paranormal's success hangs on the suspense Peli builds around that very door and other everyday objects in the three-bedroom San Diego house shared by the film's heroes, Micah (Micah Sloat) and Katie (Katie Featherston).

As the film opens, Micah, a twentysomething day trader, has decided to use a video camera to record strange phenomena that seem to occur when he and Katie are asleep.

A psychic (Mark Fredrichs) tells the couple a demon is targeting them and advises they not fight or express anything that would emanate negative energy, avoid angering or goading the demon, and never try to contact it.

Of course, Micah breaks all three rules. Things get worse.

A lot worse.

Peli is to be congratulated for pulling off such an audacious project, but he needs a sharper sense of timing: The film's pacing is uneven, which weakens the suspense.

His characterization is also a bit off: Micah is an intensely unlikable hero, who acts like an obnoxious pubescent.

He seems to have an obsessive need to prove he's a virile man always in control. He dismisses Katie's very real fears and announces he'll beat the brimstone out of the demon. But, as Katie tells him at one point, Micah is as impotent as a man can get.

By the film's end, we pray the demon does something really nasty to him.

Paranormal Activity *** (out of four stars)

Directed by Oren Peli. With Katie Featherston, Micah Sloat, Mark Fredrichs. Distributed by Paramount Pictures.

Running time: 1 hour, 39 mins

Parent's guide: R (language, intense themes, Ouija board usage, suggested violence)

Playing at: area theaters

Contact Tirdad Derakhshani at 215-854-2736 or tirdad@phillynews.com.