Perhaps this one’s a little far afield, as it’s not a horror film, but it is in a neighboring genre. I think. This is the description:

Two friends are spending a week, day/night crossing London inside a black cab and reading a science fiction book. In the story their imagination is so powerful that they are able to become the characters from the book and re-create new and better realities around them in 3D and in blue.

But mostly in blue:

Also note:

This product is manufactured on demand using DVD-R recordable media.

I’m really, really surprised.