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Why Are There So Many Bad Horror Movies?
You'll find far more B rated horror movies than you'll find B-level scifi (barring Ed Wood and a few old cult classics) or fantasy movies. Why are there more bad horror movies than you see in other genres?
Low Cost of Entry
Horror movies tend to be one of the cheapest genres - have a scary location and people who can kind of act or terrifying premise and decent actors and you have a good movie. Found footage style movies minus special effects can be done by enthusiasts; think "Blair Witch Project" or the first Jason movie. In contrast, there are very few low to no budget science fiction movies like "The Man from Earth" or "Another Earth" that look good because they don't need a lot of special effects, makeup or locations. Dark scifi/horror B movies exist, like Repo Man, and they rely more on violence, gore and fear factor to keep the audience versus a strictly science fiction movie like "Blade Runner" or "Star Trek".
And if you need props, blood and monster masks are found in the average costume shop. Used items and worn out locations are perfect for many types of horror movies. You don't have to stop downtown in a major city or create a replica of it in the computer as you might for a scifi movie or drama.
The low cost of making many horror movies leads to far more of them being made.
A History of High ROI
The horror genre tends to draw small film houses because you can make the movie for $100,000 or 2,000,000 and often recoup ten times that in sales. Even a modest ten million dollar ticket sales pays for the movie many times over – high return on investment or ROI. The Blair Witch Project holds the record for costing a couple thousand to make and earning hundreds of millions of dollars.
Because of that track record of making your money back on small movies and often multiplying it many times over, you get many horror movies trying to get that dollar. Including lots of bad ones, because the risk is less than a 20 million dollar. Combine this with the much lower cost of making science fiction movies or many dramas, and a film production company can afford to create ten horror films knowing most will recoup their low production cost and others will make many times that.
You cannot underestimate the impact of Halloween on the horror industry. It essentially leads to a public feeling that it is committed to watch horror movies to celebrate the holiday, guaranteeing a large consumer base for part of the year. And that is on top of the small segment of the public that consumes them year round. When you release a horror movie in late September or early October, you are almost guaranteed to earn enough money to pay back production costs unless you have poor distribution or an expensive film that doesn't break even.
And the film houses minimize this risk by spending as little as possible on films unless they have a horror franchise nearly guaranteed to recoup the millions spent on the film. Think Freddy, Jason, Hellraiser. So the public sees a flood of mediocre or downright bad films competing for customer dollars in October.
Horror Movie Marathons
Horror movie marathons are a staple of October television viewing, and that's aside from horror specific channels like "Chiller". These media channels need content, and they will show the B rated horror movies to fill in the time and provide novelty. The side effect of this is that a horror movie that didn't do well in the theater may become a cult classic, Rocky Horror Picture Show being the classic example of this. Others like Donnie Darko don't yet have a decades long track record, but the existence of these films and continued movie rentals/downloads generating constant income for them give movie houses hope that a horror movie that does poorly in the theater or had limited distribution may yet generate a profit, leading to more of them.
While the monsters we tell stories about may be culturally specific, nearly every culture has creatures that drink the blood of the living, the dead that come back to life but not in a good way, shape shifting creatures that harm or hunt people. And unlike a drama or a comedy, translation isn't nearly as important when horror movies rely on trope characters and readily understood threats to engage an audience.
Whether it is "Juan of the Dead" competing with "Shaun of the Dead" or the Japanese Ring movies versus the American remakes, the relative lack of dialogue or ease of translating it means you get more foreign films directly in the US market or low cost remakes of foreign horror movies that hope to make some money in other markets as well. Think of those who can watch both the American version and European version of "Let the Right One In" with little effort, because it is obvious which characters are the protagonists - the only uncertainty is their fate in most cases, unless the identity of the threat is to be determined. And in the latter case, that is revealed in spectacular fashion toward the end of the movie, little translation required.