The Blair Witch Project (1999) has to have been real in this film.
In the beginning of this film, Lisa (the documentarian) provides some expository information about Heather Donahue and the documentary that she and her crew shot--and then this film's "editor" uses (what appears to be) actual footage from the first movie's final scene.
The first film claims, in the very beginning, that the film that you are about to watch is from footage that was found in the woods. The fact that it has been released is implied through text that implicates you, the reader/viewer, as the audience. It's the whole conceit of the film.
(Also consider: how else would "the editor" of Blair Witch (2016) have had the footage from the 1999 film if The Blair Witch Project weren't in wide release?)
And this is why Book of Shadows acknowledges The Blair Witch Project (1999) was fiction from the get-go...because otherwise a "sequel" would make no sense. Everyone knows it was fiction; and we, the audience, can no longer be implicated as part of the "documentary."
This fact is what makes Blair Witch (2016) COMPLETELY NONSENSICAL, since again, everyone knows (including the characters in this film) that the original Blair Witch Project was fiction. The whole idea of Heather's brother looking for his sister whom the entire world knows is a character in a fictional film is ridiculous.
After all, a group of millennials (one of whom has a search alert set up for...what, exactly?..."Black Hills witch"?) who have more than $30,000 worth of high-tech equipment (one of which is a drone) haven't done a Google search for "Blair Witch" or "Heather Donahue" and stumbled upon this very IMDb site?
We're not talking suspension of disbelief here. We're talking straight-up logical contradictions.
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