There is nothing scary about most of what they experience, and what would be scary if it happened in real life wasn't scary to see on film.
OH NO...HER CAR KEYS ARE ON THE FLOOR!!!!!!! AND THE CHANDELIER IS MOVING A LITTLE BIT!!!!!!!
I wish I was over exaggerating, but that kind of fright is about 2/3 of the movie. The rest of the film is the characters making ridiculously, unbelievably bad decisions causing their situation to get worse, and once it gets worse it stops being believable at all. When the basis of your film is that this is found home video footage, you dont veer off into the realm of the stupid, or you lose that connection you were trying to have with the audience.
Furthermore...not to reveal spoilers...but every commercial I've seen for the film showed a scene that turned out to be in the last 10 seconds of the film. I knew that scene was going to happen...and when the scene was set up, I KNEW it was about to occur, so when it did I was not at all scared by it, having seen it dozens of times already. This was supposed to be the scariest part of the entire film...except for what happens after, which is just silly and stupid.
The Blair Witch Project was not scary, but it kept me interested...convinced that something scary was about to happen...and then the end was pretty cool. This movie accomplished neither.
Oh...and what was the deal with the noises?? Not only did the film not have any true horror, it didnt even have cheap surprise scares, as several seconds before EVERY supernatural event, it announced it's presence with noises...eliminating any chance of me even being startled by one of the lame frights in the film (not that I would have been scared by a moving blanket anyway).
When my full theater emptied, not a single person said they thought it was scary, and every comment I overheard was that it was a waste of money and over hyped.