By RICHARD CORLISS
http://www.time.com/time/arts/article/0,8599,1929648,00.html

Oh, sweet Jesus, that nice couple Katie and Micah are about to go to sleep again! They already suspect that their house is haunted. Micah has propped up his video camera in their bedroom to record any unusual phenomena, so they'll know what awful thing happened the previous night, while they were sleeping. The bedroom door moved a couple of inches and then ... moved back!

Big hairy deal, say cynics who were bred on gross-out horror movies. Show us heads exploding, chests busting, legs sawed off. Yet the packed audience at a late-night screening of Paranormal Activity in Times Square this past week didn't need gore effects to be scared witless. Yes, they knew it was only a movie — one that, like The Blair Witch Project and Cloverfield and plenty others before it, used "found footage" to give a patina of realism to the fanciful events that were dreamed up by writer-director Oren Peli and are endured by actors Micah Sloat and Katie Featherston (using their real names). But when that door moved, the crowd's collective gasp just about sucked all the oxygen out of the theater.

The campaign to bring Paranormal Activity to the public is already a movie-industry legend. Shot three years ago by Peli, an Israeli-born video maker, for $11,000 in a week in his house, the picture played a few fright festivals in 2007. While DreamWorks considered buying the rights to do a remake with stars, Steven Spielberg took a copy of PA home to watch it; when he finished his screening, he found his bathroom door inexplicably locked. (He thought the DVD was haunted.) Two weeks ago, Paramount started playing Peli's film at midnight in 16 college towns. Many showings were sold out. Sorry, come back next week, if you dare. No tickets created a hot ticket — the movie grossed $1.2 million in its early, limited engagements — and Paramount stoked the fever by urging fans to go online and "demand" a wider release. More than a million such requests came in, allowing Paramount's website to brag that PA was "the first-ever major film release decided by You."

This weekend, PA has expanded to all-day runs on 159 screens in 44 cities, and according to early reports, it's headed for a box-office breakout — perhaps the highest three-day gross of any film showing in fewer than 200 venues. "Look out, cuz there's a freight train coming," an executive from a rival studio told Deadline Hollywood's Nikki Finke, "and Paramount is going to make a TON of cash on this pickup. Cuz they ain't spending anything on it, and who knows where the ceiling is!" The box-office figures will make headlines, giving the movie more free publicity and luring bigger crowds that are eager to learn what all the screaming is about.

Beyond the viral ingenuity of the marketing, what's cool about PA is that it's not just a fun thrill ride; it's an instructive artistic experience. A horror-movie revisionist, Peli follows a less-is-more strategy. He knows that waiting for the big scary jolt does more damage to the nervous system than getting it. The tension builds slowly, as the apprehensive Katie, a student, and the skeptical Micah, a day trader, feel the first emotional tremors. The movie keeps us in its grip because we never leave the couple's haunted property and because all we see is what the camera has recorded when held by Micah or Katie, or when left on at night to monitor their bedroom. That claustrophobia creates a bond between the couple and the audience; they can't escape, and neither can we.

Peli downplays shock and emphasizes suspense: a shadow creeping across a wall or the ripple of an unseen form under the bedsheets. The gore scenes in splatter movies carry a sadistic punch, but those are outside most moviegoers' experience. What Peli is interested in is dread, a feeling everyone is familiar with. (Will I lose my job? Has she found someone else? Why hasn't our kid come home yet? What's that strange rash?) Movies take that anxiety, crystallize it and, because fiction demands an ending, resolve it. The threat is provided, the fear made flesh, the monster confronted. All gone — feel better? Horror movies provide vicarious psychotherapy in an hour and a half. PA is different. At the end, it doesn't let viewers off the hook. It leaves them hanging and dares them to turn that last shiver into a laugh of relief that the delicious ordeal is over.

PA has less in common with modern gore movies than with certain avant-garde films of the late '60s, like Michael Snow's Wavelength — a murder mystery in the form of a single, slow, 45-min. zoom shot through a room — and Morgan Fisher's Phi Phenomenon, an 11-min. shot of a wall clock without a second hand. In Fisher's film, viewers were meant to concentrate so intently that they could see the minute hand move. PA uses a similar strategy: the stationary camera in the overnight bedroom scenes has a time code at the bottom right of the frame. Sometimes the clock spins like mad to show the passing of hours between phenomena — and in one super-creepy scene, there is the image of Katie standing motionless, as if still asleep, for two hours straight. It's even more chilling a few nights later, when Katie, clearly the more haunted of the two, again stands still for hours but this time on Micah's side of the bed.

If you're a horror-movie fraidy cat, know that most of the spooky stuff occurs in the bedroom, so — as with The Exorcist back in 1973 — you can steel yourself when the couple goes to sleep. Then too, you may not be scared at all by Paranormal Activity; but as you sit in a movie house, you should feel some fraternal pleasure in noticing that the folks around you are preparing or pretending to be scared. And you should be heartened to realize that — in an age of YouTube, iPod and DVR, where people get their visual media one by one — watching a fictional narrative can still be a communal activity. A thousand people sit as one in the dark, as fretful and enthralled as a child hearing a bedtime story and wondering, What happens next? No, I can't bear it! No, I have to see!