The horror film entered a period of transition and seemingly disordered development with the sunset of the great genre studios of American International Pictures and Hammer. Distinct trends or sub-genres are observable in this period. Three appeared very early and marked the transition between the second generation of horror classics, pursuing typically traditional, especially Gothic, themes and the beginning of the modern period (for lack of a better moniker).
The first of these became one of the strongest streams of genre evolution and may seem to hearken to the previous era, but it is truly a divergent trend. That is the occult film sub-genre, inaugurated by Rosemary's Baby and given its archetype in The Exorcist. The differences between the occult film and previous films of occult subject are the contemporary urbanity of the setting, the extreme skepticism, secular viewpoint and lack of faith on the part of the protagonists, and the truly cosmic, ineffable nature of the evil encountered. A parallel trend, similar to the occult film, is the paranormal or psychic film, beginning with Willard, in which uncontrolled power within man (as opposed to outside) is the menace. While both of these trends can be traced all the way back to 1957's Night of the Demon or arguably to even earlier films, the subject became immensely prolific in the 1970s.
The second trend, incipient evidence of which may also be seen back to the early 1960s (notably in Roman Polanski's Repulsion), is that of the psychological development of horror. While many films abandoned subtlety for raw and extreme horror, pushing the envelope for audience sensitivity, others such as The Stepford Wives and Magic explored the interior aspects of fear. Normally, films of this sort are devoid of supernatural trappings and classed as suspense-thrillers (a borderline example being The Eyes of Laura Mars), but there is a definite development in this period toward internalization of fear. Even Gothic subjects became infused with new psychological depths. Good examples of this are Ghost Story and The Awakening.
The third trend is difficult to characterize, but is instigated by The Night of the Living Dead. Certainly, gore became far more prevalent in the late 1960s and early 1970s, but this typifies the evolutionary development of the traditional human-monster film of the past. This last trend, made classic by Halloween, is seen most clearly in the antagonist of "The Shape", the unstoppable maniac, the boogeyman with a meat cleaver. The human monster has become a faceless, quasi-supernatural evil, void of identity, though human in appearance. The form spilled over in the sci-fi realm in The Terminator, which may be a horror film in spite of its sci-fi trappings. All of these threads of development share common elements, characteristic of the shape of fear inspired by the turbulent times of the late 1960s and the cynical mistrust of the 1970s.
Another trend which I will not treat further was the comic-porn-gore horror film, inaugurated probably by Hershel Gordon Lewis and others in the 1960s, furthered by films like Roman Polanski's The Fearless Vampire Killers, or Pardon Me, But Your Teeth are in My Neck as well as the unintentionally comical but pointedly pornographic last few Hammer films (Lust for a Vampire, Lady Frankenstein, etc.), and which reached its zenith (or nadir, as you may perceive the trajectory) in the two deliberately, abysmally absurd films by Paul Morrissey: Flesh for Frankenstein and Blood for Dracula in 1974. This trend has not entirely disappeared, but was blessedly never prominent, and has faded almost to obscurity.
Of course, traditional horror themes did not disappear, as a perusal of the following reviews will quickly reveal, but the supernatural Gothic film became very scarce for a time. The Universal remake of Dracula in 1979 at the height of the disco fever is a notable exception, but its traditional elements are infused with new life by the popular conception of aggressive sexual power, a reflection of the (already fading) age of sexual liberation. On television, the traditional subjects of horror were brought into the present and situated in the very midst of the metropolis with Kolchak: The Night Stalker, the forerunner of The X-Files, and several short-lived anthology series such as Circle of Fear and my childhood favorite, Rod Serling's Night Gallery. The message of these programs was that the underside of modern life still hid shadows of familiar older shapes of evil. In the mid-1980s the new contemporary Gothic emerged with films such as Fright Night, intended as a nostalgic spoof and tribute to the classics, and culminating in 1994's Interview with the Vampire, evidence of the new wave of pop-Gothic culture and especially of vampiric fascination.
This period saw the waning of the great studios and franchises into a twilight of B-movie trash and exploitation films, occasionally illuminated by respectable efforts, but ended at the close of the century (and the millenium) with another rise in horror movie interest, possibly an all-time high, that with the advent of video rental venues nevertheless remains challenged by a flood of junk cinema. Certainly, the horror film emerged from its worst episode of diminished relevance and filmcraft to flourish anew with the evolutionary changes seen in this period in terms of subject, psychological tone and ever increasing shock, but where it will go in the future is yet to be seen... in the next segment.