Before we get into the meat and potatoes I have to thank some people. Thank you to my parents who have always encourage my love of horror movies. Thank you to my boyfriend and friends who watch them with me and big, huge massive thank you to everyone who reads and comments on this site. Thank you for giving me a soap box on which to stand.
Found footage films have existed since 1980 with Cannibal Holocaust but didn't gain enough traction to become their own genre until 1999 when the Blair Witch Project made more money than anyone could imagine and because of it's next to nothing budget, yielded huge profits. And I mean HUGE! Authors have been trying to imbue their works with a sense of realism since Mary Shelley's Frankenstein and Bram Stoker's Dracula where both written in diary and letter formats. But presenting a horror film as real is where the money is (sorry estates of Stoker and Shelley), and let's not forget how they are presented. The Blair Witch Project was real, real, real! There was even a TV special to go along with the film called the Curse of the Blair Witch which went more in-depth exploration of the Blair Witch mythos.
Everyone kept telling you it's real. Well, all the marketing and people who believed the marketing did anyway... A lot of people got wise to the conceit but it's a fun ride to take anyway. (though there was a girl in my MA class who still believed it was real) But lo, it was not real.
The Blair Witch Project is an interesting phenomena because of the pre-release run up of these films. So much emphasis was place on the film being real that people seems to forget that there is a darn fine scary movie at it's core. Many people were angry at the fact they had been duped into believing it was real. But films today still haven't learned the lesson that if you make a solid scary movie - people will come.
The most recent case of this was the turgid mess that was The Devil Inside. What starts with a great premise is quickly turned into a big middle finger to the audience when the film ends abruptly and the audience is given a website to go to if they'd like to learn more. Unless that website tells me how to get my money back then I do not care for such a website, I say good day, sir! It was a film that was seemingly designed to perpetuate the viral marketing strategies that some firm had put in place. Viral marketing had superseded the the film it was meant to promote. Granted that didn't stop The Devil Inside from making a fair amount of coin and debuting at #1 but it also led to awful word of mouth and quickly leaving theatres.
Another approach to the low budget genre is that of getting fan to demand it, which has been used very effectively by the Paranormal Activity series. They played the tactic that Paranormal Activity was too scary and too unlike anything anyone had ever seen to warrant a big studio getting behind it so fans had to demand it. And if you demanded it enough it would play in your city at a super edgy cinema like the .... AMC 24 .... yeah... like that one. More recently V/H/S is going the route of audience demand, even though everyone I know who's seen it has uttered a resounding "meh" at the whole endeavor.
I know a lot of people don't like these films. They simply don't work for them and that's fine. I love them. They usually freak me out and I love the creation of a mythology that they have to do. Unfortunately for those that don't like them, we'll be seeing a lot more of them. Because they cost so little to make they almost always turn a profit. As our culture becomes more voyeuristic and self-promotional, these films will always resonate.