Production
Attempting to focus on believability rather than action and gore, Peli chose to shoot the picture with a home video camera. In deciding on a more raw and stationary format (the camera was almost always sitting on a tripod or something else) and eliminating the need for a camera crew, a "higher degree of plausibility" was created for the audience as they were "more invested in the story and the characters". Peli says that the dialogue was "natural" because there was no real script. Instead, the actors were given outlines of the story and situations to improvise, a technique known as "retroscripting" also used in the making of The Blair Witch Project. In casting the movie, Peli auditioned "a few hundred people" before finally meeting Katie Featherston and Micah Sloat. He originally auditioned them individually and later called them back to audition together. Peli was impressed with the chemistry between the actors, saying, "If you saw the [audition] footage, you would've thought they had known each other for years." During a guest appearance on The Jay Leno Show on November 3, 2009, Sloat and Featherston explained they each saw the casting call on LACasting. Featherston noted they were originally paid $500 for their work.
Principal photography took place at a private residence in Rancho Peñasquitos, San Diego. The film was shot out of sequence due to Peli's self-imposed seven-day shooting schedule. Sloat, who controlled the camera for a good deal of the film, was a former cameraman at his university's TV station. "It was a very intense week," Peli said, stating that the film was shot day and night, edited at the same time, and had visual effects applied as the acting footage was being finalized. Multiple endings were conceived, but not all of them were shot, and the final publicly released ending added by the studio after rights to the film were obtained.
The film was screened at 2007's Screamfest Horror Film Festival, where it impressed Kirill Baru, an assistant at the Creative Artists Agency, to the extent that CAA soon signed on to represent Peli. Attempting to find a distributor for the film and/or directing work for Peli, the agency sent DVDs of the movie to as many people in the industry as they could, and it was eventually seen by Miramax Films Senior Executive Jason Blum, who thought it had potential. He worked with Peli to re-edit the film and submitted it to the Sundance Film Festival, but it was rejected. The DVD also impressed DreamWorks executives Adam Goodman, Stacey Snider, and finally Steven Spielberg, who cut a deal with Blum and Peli.
DreamWorks' plan was to remake the film with a bigger budget and with Peli directing, and only to include the original version as an extra when the DVD was eventually released. "They didn't know what to do with [the original]", said Blum; they just wanted to be "in business" with Peli. Blum and Peli agreed, but stipulated a test screening of the original film before going ahead with the remake, believing it would be well received by a theatrical audience.
During the screening, people began walking out and Goodman thought the film was bombing, until he learned that the viewers were actually leaving because they were so frightened. He then realized a remake would be unwise and unnecessary. Paramount Pictures, which acquired DreamWorks in 2005, bought the domestic rights to the film, and worldwide rights to any sequels, for US$350,000. When the film was taken in by Paramount, several changes were made. Some scenes were cut, others added, and the original ending was scrapped, with two new endings being shot. The ending shown in theaters during the film's worldwide release is the only one of the three to feature visual effects, and it differs from the endings previously seen at the Screamfest and Burbank screenings. The theatrical release was delayed while Paramount initially put all DreamWorks productions on hold; however, a screening for international buyers resulted in the sale of international rights in 52 countries. Only after Goodman became production chief at Paramount in June 2009 did the film finally get slated for a Fall release.
