Comparing the low-budget horror sensation to its even lower-budget knockoff.

It is difficult to feel much in the way of empathy for the people behind Hollywood blockbusters. But let's give it a shot. Let's forget that these are the people responsible for Jerry Bruckheimer's garage full of diamond-encrusted Lamborghinis, and for the fact that actual deals have been struck for movies based on, for instance, the Magic 8 Ball, the board game Battleship, and that jerky day-trading baby from the E*Trade commercials. Studio decision-makers are not doing all this because they're bad people. These films (and their inevitable sequels) are getting made because of Hollywood's fetish for "pre-awareness." You may not have ever wished that someone could take the pulse-pounding excitement of playing Battleship and translate it to the big screen, but you probably know what Battleship is. In marketing an expensive product, that's a huge consideration.

It could be argued that the power of pre-awareness is the biggest factor behind the success of the Asylum, a disconcertingly prolific B-movie house that specializes in knocking off Hollywood blockbusters with mind-boggling speed. But the story of how this defiantly cheesy mini-studio became a low-key Hollywood success is more complicated than that.

The Asylum has been pumping out direct-to-DVD movies at an eye-popping rate for several years now. It either produced or distributed an astonishing 15 films in 2009. While there are some hard-to-figure titles on the Asylum's credit list—what was the target audience for 2006's feature film realization of The 9/11 Commission Report?—most of the company's output falls into one of two categories. There are the straight-to-DVD genre films produced for the rental market—your Sex Pot, your Princess of Mars—and then there are the mockbusters. The latter have names like Transmorphers and The Day the Earth Stopped and Snakes on a Train. These lessons in the power of pre-awareness are the movies for which the Asylum is best known.

Just about all of the Asylum's films cost less than a million dollars to make, and all of them make at least some money. The company has a deal with the SyFy Channel, which can't seem to get enough of the Asylum's genre pictures, especially the larger-than-average-animal line of films that includes Mega-Shark Versus Giant Octopus and Mega Piranha. Mockbusters such as The Da Vinci Treasure and The Terminators—which is sadly not a family-sitcom take on Terminator—do perplexingly well in the rental market. The fact that mockbuster DVD releases are timed to the cinematic openings of their big-studio counterparts presumably helps lure multiplex-averse viewers, while the lawsuit-begging titles perhaps ensnare the less-than-careful readers among Blockbuster's clientele. Whatever the thinking behind the Asylum's mockbusting, it's working. Variety has reported that the company earns about $5 million in annual revenue. *

The Asylum's mockbusters—producer David Rimawi apparently prefers "tie-ins"—aren't terribly enticing unless you're a big C. Thomas Howell fan. (If you are, you probably already know that Howell has starred in five Asylum features and directed three.) Yet despite their minuscule budgets, ultra-collapsed shooting schedules (about 12 days for a full-length feature of Mega Shark proportions), and off-the-cuff plotting, the movies still seem to meet their viewers' presumably modest expectations. While some people doubtlessly hoped for a transcendent action-movie experience from Terminator: Salvation, most viewers of The Terminators will likely be satisfied if former L.A. Law star A. Martinez manages to keep a straight face during his scenes.

These lowered expectations have surely been a boon for the Asylum, but a recent release provides a unique opportunity to see how the mockbuster-meisters would perform in a fair fight. The 2009 no-budget horror hit Paranormal Activity made more than $107 million domestically on a reported $10,000 budget. The film's huge success evidently surprised the Asylum as much as it did everybody else, but the studio recovered in time to have a knockoff version, Paranormal Entity, on shelves a week before Paranormal Activity's DVD release.

The movie blogger Matthew Abrams has calculated that if Paranormal Entity had been budgeted according to the Asylum's usual mockbuster-to-blockbuster ratio, it would have been made for $18.75. Paranormal Entity does indeed look as if it was brought in on a budget that allowed change on a $20, but while the Asylum is generally closed-lipped about its budgetary specifics, it seems safe to assert that both Paranormals were made very cheaply. Having watched both, I can attest that their budgets are about the only things the two films have in common.

Paranormal Activity is a little masterpiece of filmmaking form following budgetary function. Director Oren Peli's choice to let the movie play out largely in long, still shots not only saved money by turning a tripod into his cinematographer, but also helped to create an authentically nightmarish tension. "[Peli] knows that waiting for the big scary jolt does more damage to the nervous system than getting it," Time's Richard Corliss wrote, which is exactly right. With little more than some crafty pacing, a pair of committed performances from lead actors Katie Featherston and Micah Sloat, and a special-effects budget that seemed largely to have been spent on fishing line—the better to "invisibly" pull doors closed—Peli created a minimalist horror classic.

Paranormal Entity borrows Activity's largely improvised style and found-footage storytelling conceit—one scene makes an explicit visual nod toward The Blair Witch Project, the jittery-videography-at-night genre's ur-text—it doesn't make much of an effort at replicating Paranormal Activity's almost sadistic patience. Given the grammatical and typographical errors in Paranormal Entity's title cards, it could be argued that not much effort was made at all.

Paranormal Activity got remarkable mileage out of the spookily static tension of showing its haunted couple sleeping, shrinking its single set into an increasingly claustrophobic kill zone. Paranormal Entity, by contrast, regularly sends director/co-star Shane Van Dyke—yes, the grandson of Dick—wandering around the house, breathing into the camera's mic, opening doors into (spoiler alert) empty bedrooms and setting tripwire-style booby traps for the titular entity. Paranormal Entity has its share of sleeping scenes, but a disconcerting number of them capture midday naps. I've never seen a film with as much day-sleeping in it. Where Paranormal Activity inspires you to yell, "Get out of the house," Paranormal Entity encourages you to do so yourself.