The problem is, on both a filmmaking level and a storytelling level, most found footage movies don’t work. Don’t get us wrong; they can. “Chronicle” is a recent, and superb, example of a screenwriter and a director using the conceit to make a genuinely affecting movie.
But it was also largely a movie that broke the “rules” of found footage. “Chronicle” was heavily planned from the ground up to break away from the problems these kinds of movies presented. Most, unfortunately, aren’t.
#5) They Tend To Be Poorly Directed
Actually shooting footage the way a normal man on the street shoots video, while actually communicating to the audience what you need for them to understand the movie, is really, really hard. “Blair Witch” is a great example: how many people had to have the ending explained to them?
Adding to the problem, you’re mostly shooting the movie from one character’s point of view for the entire movie, which means you’re limited to one camera, you have to work overtime to hide microphones and lights, and so on. And usually it’s the actor shooting, meaning they’re not a professional cinematographer, and also limiting what you can do with the footage in post.
Usually the excuse is “It’s not supposed to look professional”, which is garbage. It’s supposed to present an illusion of being roughly shot, not look like crap.
#4) It Makes It Difficult to Make the Characters Relatable
Restricting a script to a single character’s point of view means that unless you have only one or two characters, developing your characters and making the audience care about them is really hard. “Cloverfield” is a perfect example: why are we supposed to care about Hud, when all we know about him is that he’s horny, stupid, and invests in some powerful camcorder batteries? It makes the romantic interlude of the movie ridiculous, because the actress isn’t staring at some guy, but the camera he’s shoving in her face, for no explicable reason. Which brings us to…
#3) The Conceit Is Hard to Maintain
In most found footage movies, there does come a point where the entire audience is wondering “So this idiot hasn’t dropped the camera and sprinted away why now?” And if it isn’t that, it’s something else: “Blair Witch”, for example, stops being scary and starts being stupid when they cry about not finding any sign of civilization. All of this and there’s quite obviously a road right behind them.
Directors have gotten better at this: “Paranormal Activity”, “Apollo 18”, “Chronicle”, all used multiple cameras and thought out how the footage would be recorded. It’s still, however, a problem.