What was the main reason this movie made so much money?

Probably the first true case of successful viral marketing. Like you said, there was a buzz.

And how on earth did a low budget movie make it onto the big screen anyway?

The hype behind this movie was not like anything I had seen before, false documentaries being shown on TV that were made to look real and the way the film went viral on the internet was a phenomenal at the time.

To make a great film you need three things - the script, the script and the script -Alfred Hitchcock

Many were duped by the phenomenal market. Many weren't. For me it was that I'd never seen anything like it, which is what made me go see it at the theatre. I loved horror films with people stranded in remote locations, but the (then) novel and unique idea of using the amateur film gear by the actual people making the movie just made it seem so real, despite knowing it wasn't.

It was originally shown at a festival and the audiences loved it and the response was so great that artisan picked up the movie for like a million dollars or something like that and then they invested way more money than the movie was made for into the marketing campaign to make the fake documentaries and get them shown on the sci fi channel etc. It was a great strategy but the movie is a masterpiece without all that either way, I didn't have cable back then and hadnt seen the curse of the blair witch and knew it was just a movie and I still love it to this day so I feel that only a select few of people actually thought it was real, I think nowadays thats kind of folklore on the internet that "everyone thought it was real". Ive met one person in real life who thought that and lets just say shes not the sharpest tool in the shed the rest of the people I ask about it just say "oh it was boring or it sucked" and knew it was just a movie.

It was different. Groundbreaking. Not sure how it would have succeeded made 5 yrs prior. Internet myth marketing was surely the boost above 20 million! So much chatter yet no-one knew what the fukk this is all about! Pop culture!
I rather have anything clever on low budget exploding like this than James Bond, Star Wars, Avatar or the entire Marvel Superhero Shit with a crazy bat-shit triple-million budget and top-to-botttom main stream media marketing literally forced upon you and still hardly making gross!

To me it marked the end of the 20th Century entertainment epitome! Everything became un-original, boooring and soulless in 21st Trash Millenium! 🗑️ 💩

Because ppl thought it was REAL.
Me included.
We were all so naïve back then.

First found footage horror movie....It was so original and different...It was not another ghost movie or slasher movie. Since it was so original the type of horror movie is why it was so popular. Plus the budget was dirt cheap.

The viral marketing contributed a lot, no question

The people who still thought it was 100% real probably put butts in the seats, as did people who'd heard the story behind the filming (i.e., that it was completely improvised, shot exclusively by the actors who really did camp out in the forest for days, etc.)

But that only worked for opening weekend. It did well afterwards because it was well made and told a compelling "lost in the woods" story.

It's worth note that this film was "made" in editing (same as nearly all films to be fair). By that I mean, they would show it at a film festival, getting lots of feedback, then re-edit and show it at another film festival.

By the time Artisan picked it up, it had been shown and re-shown so often that it was effectively audience-vetted and ready for the big screen.

It's kind of fascinating, not just for its guerrilla film-making but its guerrilla editing and guerrilla marketing.