The producers of "Paranormal Activity" have found a new way to scare horror fans. Director Barry Levinson's found footage film "The Bay" is heading to theaters later this year. Lionsgate has picked up the U.S. distribution rights.

The eco-horror film centers around a biological disaster originating in Chesapeake Bay, where a disease-ridden parasite is transferred from fish to human hosts. Like "Paranormal" (and "The Blair Witch Project" before it), the horror plays out on simulated home video and streaming Internet footage.

Levinson co-wrote the script with Michael Wallach. Levinson also produced, with Jason Blum, Steven Schneider, and Oren Peli. Brian Kavanaugh-Jones, Jason Sosnoff, Colin Strause, and Greg Strause acted as executive producers. 

Although mostly known for comedies such as "Diner" and "Good Morning Vietnam," Levinson tackled sci-fi/horror before with his 1998 adaptation of Michael Crichton's "Sphere." He won an Oscar for directing "Rain Man" in 1988. Levinson was also nominated for an Emmy last year for the HBO film "You Don't Know Jack," starring Al Pacino.

"Ingenious genre films are and always will be a specialty at Lionsgate," said Lionsgate's Joe Drake in a press release. "'The Bay' is a shining example of the kind of truly fresh horror film that audiences are always ready for, and that we excel at eventizing with them. Thanks to Barry, we'll all be afraid to go in the water for years to come."

"We have been big admirers of Jason Blum, Steven Schneider and Oren Peli since their breakout hit 'Paranormal Activity,' and are thrilled to be in business with them," added Lionsgate's Jason Constantine. This film works so effectively because it establishes a very natural, everyday world, places the audience intimately within it, and then sits back as everything takes a horrific turn. Barry has incorporated found footage to the most satisfying possible effect, and it's all the scarier for not relying on anything supernatural."

"It's exciting to see a company like Lionsgate embrace 'The Bay' so enthusiastically. The found footage/multiplatform approach opened up the film to creative possibilities I hadn't encountered in my previous films, and I think these sorts of films will only continue to push boundaries as the technology changes," said director Levinson.