The first several weeks of 2012 has seen two found footage films at the top of the box office charts, both which look to have substantial returns on their budgets. The Devil Inside cost $1 million to produce and thus far has made $53 million domestically. (It doesn't appear to have been widely released abroad yet.) Even allowing for the fact that marketing that film easily had to cost $35 million, there'll still be a wide profit margin after international and DVD markets. (Don't worry, I'm sure some Paramount accountant is already cooking the books to "prove" this film is still in the red.)
Chronicle opened this week to an impressive $22 million on a $12 million budget. It's already made $12 million abroad, so it's likely to be a healthy performer by the end of its life. When you look at those numbers, it's easy to see the upside. It cost less than $10 million to produce ALL THREE Paranormal Activity films, which grossed over $575 million. That's half a billion dollars on an investment of $10 million.
In other words, expect "found footage" to be beaten into the ground. I wouldn't be surprised if many of you were planning on writing scripts in that genre. Pretty much since the first Paranormal Activity, I've seen an increase in those kinds of submissions, so here are a few things I'd keep in mind as you develop those ideas.
You'll notice that most "found footage" films tend to be negative pickups. This is a term for when the producers foot the bill for the film and then sell it to the studio upon completion. The advantage of this is usually greater creative freedom for the filmmaker. The advantage on the studio end is that they get to see EXACTLY what they are buying. (There are other kinds of negative pickups, but this is the scenario for most of the found footage films you've heard of.) This could be advantageous for the buyer as well, for if you have several studios interested, you can stoke a bidding war and drive up the price. The Sundance Midnight Movie V/H/S is a good example of a found footage film that had three interested buyers vying for the rights.
But I'm drifting... my point is, I don't know how much success you'll have by writing a found footage film on spec and then selling it to a studio as you would a more typical high concept spec. (I know there's at least one such found footage spec sale in the past year, but the specific title escapes me at the moment.) These sort of scripts don't always read well. The "reality" of the finished product comes from the "real" and mundane nature of some scenes, but on the page some of those moments are "dramatic death." (Imagine a transcript of most movies in this genre and meditate on how many scenes would feel lifeless and dead on the page without the texture of being seen through the camera lens.)
I'm just one reader, but the dialogue can be a real dealbreaker in this genre. Too "realistic" and it's a chore to slough through on the page. Too clever, and the events feel scripted and inauthentic. A found footage script is less likely to be a spec you sell than it is to be a spec you actually shoot yourself.
The second big thing to remember - you have to justify EVERY moment the camera is running. The longer this genre's around, the more people are going to become sticklers for this. In the past, audiences might have gone with the conceit that the guy with the camera "just wants to get a record of this incredible event" but suspension of disbelief is critical to this genre. You're trying to pass this story off as "real" so you can't use some of the cheats that a conventional film uses.
Never write a scene if you can't answer the question "Why is the person holding the camera shooting this moment?"
Third rule: Keep it short. 90 minutes or fewer is pretty much the sweet spot for this genre. If your found footage script is 120 pages long, odds are there's a problem. Cloverfield, The Devil Inside, Chronicle, The Blair Witch Project and Paranormal Activity are all under 90 minutes in length.
Fourth rule: Your ending will almost always shape the reaction to your film. For their occasional deficiencies and logic issues, The Blair Witch Project and Paranormal Activity have extremely memorable climaxes. The final scenes are shocking, disturbing and rather unsettling. That emotion stays with the audience as they leave the theater and it's that reaction which defines the buzz. In contrast, The Devil Inside had a terrible ending and made the film the target of a lot of critical and audience vitrol. (Those idiots still lined up to see it, though...)
So if you want to make a name for yourself in found footage, your ending has to be the best thing about your film - and it HAS to stir a reaction in your audience.
If there's a fifth thing to remember, it's that horror - or at least a concept with supernatural elements - is the hot genre for found footage at the moment. The comedy equivalent is the "mockumentary" but there's a clear distinction in the structure of a Christopher Guest film and something like Paranormal Activity. (And there's also the fact that most comedy mockumentaries don't usually go the extra step of using a visual asthetic that deliberately apes low-quality video.)
The breakout hits in found footage all have an element of the fantastic. They're "High Concept, Low Budget." Comedy mockumentaries often find their humor in the mundane. There's nothing wrong with that, but it won't have the box office resonance of something that scares the pants off the audience.
That's the way I see it. Your milage may vary.