I am loathe to prognosticate about the directions that the horror cinema will take in the coming decades, what trends will emerge. A very few can see the artistic elements of their time which will coalesce into the most significant themes and stylistic directions. It is far easier to look back. And how many directions the cinema of dark fantasy has taken in the last 30 years! When I note threads of evolution, these things are simply those that strike a chord within my psyche. There are doubtless others of equal importance.
Were I to offer my guidance for the new millenium it would be this: to turn away from a dependence upon special effects (however understated) and technological devices for inducing a quick thrill, away from cliched characterization and plotting of the "monster-on-the-loose" variety, away from attempts to meld horror and tasteless humor, away from self-serving ideologic soliloquys and the all too frequently encountered mantras of the self-righteous (read Stephen King's examination of the horror story as an expurgation of the non-conformist in society in Danse Macabre), away from pathetic remakes of classics. My hope is for films which pursue the things that genuinely create fear, not the sudden shock but the creepy growing unease, by the development of characters which we both identify with and care about (not regard with disdainful antipathy and experience some perverse homicidal pleasure in their demise), by withholding the revelation of what is feared, by internalizing the dynamic (action spoils fear) and by effective cinematography and direction.
Independent film efforts have recently experienced tremendous success while many expected blockbusters have proved to be financial disasters. There is reason to believe that this trend may lead to a revival of good filmmaking as a matter of necessity (as budgets shrink). At the same time, there is a strong sense of nostalgia for the classics of yesterday resulting in a trend toward big production remakes of "sure hits" which generally lack substance and can't hold a candle to the originals.
Most of the above was written ten years ago. At the close of the first decade of this new millenium, the strongest emergent trend is that foreign films dominate the genre. Imported horror films from Japan, from Europe and even from South America have proven to be far superior to the efforts of Hollywood and, despite their relatively low budgets and straight-to-video distribution, have engendered a strong following among US viewers. That a couple of these have been remade (and made well) by Hollywood is perhaps the most damning evidence yet that the American film studios are by and large bankrupt of original imagination. Given the dearth of creativity, it seems a natural inevitability that comic treatments of horror would thrive and indeed spoofery is on the rise.
Another lamentable trend already in evidence as this first decade of the new millenium wears on is that of the torture-sadism film. Also known as torture porn, these films are typified by not only graphic depictions of violence, but the psychological aspects of torture ranging from the creation of terror in a victim to the infliction of mental cruelty. What makes these exploitation films different from a stock horror film is that (as with many slasher films) the audience is permitted to identify and sympathize with the torturer, rather than the prospective victims. These are vicarious explorations of human barbarity and the popcorn munching legions adore them, as witnessed by the flurry of sequels in the Saw series, as well as Hostel and others. Saw was a film with much promise, a great cast and clever plot that was spoiled by a gimmick ending that required a suspension of disbelief more profound than a typical supernatural film; it was just incredible. The sequels are mere profit vehicles. The 1960s saw a sub-genre of this sort of thing among the films of Hershell Gordon Lewis and other cult films. Perhaps this fad will pass as well.