How ‘Lights Out’ Went From Viral Horror Short to Major Studio Scare-Fest

·Senior Correspondent, Yahoo Entertainment

Teresa Palmer in “Lights Out.” (Warner Bros.)

This weekend, the horror movie Lights Out will attempt to scare audiences silly with its tale of a woman (Teresa Palmer) trying to protect her younger brother from a malevolent spirit that only comes out in the dark. Helmed by first-time Swedish director David F. Sandberg, it’s got an excellent horror pedigree with Saw, Insidious, and Conjuring director James Wan serving as a producer. It’s also got something else going for it: a fascinating origin story that starts with a terrifying two-and-a-half-minute viral video.

Lights Out’s journey to the big screen began one night in 2013, when aspiring filmmaker Sandberg and his wife, Lotta Losten, shot a chilling horror short. They had no budget to speak of, used their Gothenburg apartment as a set and Losten herself as the star, and built a camera dolly with lights, rubber, and wood from (naturally) IKEA. Sandberg had been making animated shorts and working on documentary crews since 2006, but he was eager to break into horror and thought he had just the right scary idea: a story about a woman haunted by a shadowy figure who appears every time she turns off the light. (Sandberg created the onscreen special effects using Photoshop.)

“I’ve had that happen a lot, when you turn off the lights at home and you think you see like a shadow, or someone standing there, and you have to turn it back on,” Sandberg told Yahoo Movies. “It’s nothing, but you think, ‘Hmm, what if there actually was something in the dark every time you turned off the lights?’”

Sandberg entered the short in Britain’s Bloody Cuts Horror Challenge. It didn’t win — it wasn’t even a finalist — but Sandberg was named Best Director. Yet a far greater prize came in the months that followed: The short went viral on Vimeo, YouTube, and other video platforms, racking up more than 20 million views. Watch it here — if you dare.

Soon Sandberg was being bombarded by calls from managers, agents, producers, and studios. “It was insane how much attention a two-and-a-half-minute short could get,” he recalled. “I had to make a spreadsheet of everyone I talked to just to keep track of everyone and what everyone was saying.” One of those suitors was Lawrence Grey, a former Fox Searchlight executive who has since produced films like Hope Springs and Last Vegas and discovered the short film on Reddit in early 2015.

“It was one of those things that just blew me away,” said Grey. “I watched it in my office during the day on a bright and sunny L.A. morning — I shouldn’t be scared at all. But I jumped every time. I went to bed that night seeing that thing in my dreams.”

The next day Grey tracked Sandberg down. Sandberg said he and Losten had no intention of turning the short into a full-length feature, and even Grey wasn’t sure it was possible. But Grey and Sandberg hit it off and started workshopping the concept, based on the premise of an adult having an imaginary friend, who turns out to be the spirit going bump in the night.

Grey also had the perfect collaborator in mind — horror hitmaker James Wan. The two had known each other since the early ’00s, when Grey attempted to bring the then unknown Wan into the Searchlight fold for a microbudgeted film he wanted to make called Saw (which, like Lights Out, was based on a short). Searchlight ultimately passed, and of course Saw — and its six sequels — went on to make over $400 million. But Grey and Wan had kept in touch. “I said, ‘You know, James, I’m thinking back to when you and I first met when you showed me Saw, and I think I might have a guy who’s like you, 10 years [earlier],’” recalled Grey.

Wan had seen the short, and while he was skeptical Sandberg could make the jump to a feature film, he was impressed by the treatment they created. “What I really liked about it was the simplicity of the concept,” Wan said. “The idea is very universal: people afraid of the dark.” Wan made Lights Out one of the first films he’d produce under his new production banner, Atomic Monster.

Grey recruited screenwriter Eric Heisserer (who wrote the Thing and Nightmare on Elm Street remakes) to pen the feature version. The filmmakers cast Teresa Palmer as a young woman who has to care for her younger brother (Gabriel Bateman) while attempting to save her mentally troubled mother (Maria Bello) from the evil spirit named Diana. Warner Bros. signed on to distribute, and Lights Out went into production with a $4.5 million budget (meaning, no more IKEA-based equipment).

Watch the trailer:

Wan said one of the reasons he launched Atomic Monster was so he could give young genre filmmakers the tools they needed to make names for themselves. “I’m very thankful for the opportunity I had starting off, and I want to do the same,” he said. “I’m not going to give [them] a lot of money, but what I think it does is it allows them to be very creative as a new, upcoming filmmaker.”

Warner Bros. is obviously satisfied and the reviews so far have been solid. Sandberg has already gone into production on another one of the studio’s tentpole genre films, Annabelle 2, the sequel to the hit 2014 Conjuring spinoff that is currently shooting in Atlanta. (The film is again being produced by Wan.) “It just went really fast and really smooth and people keep telling me, ‘Don’t get used to that,’” Sandberg said. “‘Because that’s not usually how it happens.’”

Lights Out opens July 22.

Watch Teresa Palmer talk about her own haunted house: