Studio Horror
The summer of love was over and destroyed by the Manson Family killings and the new grim outlook of the decade. The party of the 60's was over; Woodstock was over, Hendrix and Joplin were dead, The Beatles split up, Vietnam was still going on, there were oil strikes, recession, and Watergate. The 70's were not about sexual exploration or cultural revolutions. But when the world is in turmoil; great Horror films are made.
The 1970's saw a return of the big budget studio Horror film as well as a boom of independent Horror films making a huge impact on mainstream culture. Horror films were being taken seriously in the 70's thanks to a famous late 60's film Rosemary's Baby. Thanks to this film having mainstream appeal, critical acclaim, and a highly regarded director (Roman Polanski) and lead actress (Mia Farrow), studio films like The Exorcist in 
1973, Jaws in 1975, The Omen in 1976, and Alien in 1979 (all with famous directors and higher profile actors/actresses) were able to be highly successful at the box office and with critics as well as a few of them being nominated for Best Picture at the Academy Awards.
Films like The Exorcist, Jaws, and Alien are now among lists of greatest films ever made and spawned franchises – unfortunately with the first two, but not so much the case with Alien 
spawning a fantastic sequel (that some say is a better film) and a few decent sequels. Alien is an interesting film because it takes the Science Fiction craze of the late 60's and 70's thanks to 2001: A Space Odyssey, Star Wars, and Star Trek and essentially creates a haunted house thriller on a space ship. Many debate whether or not Alien or Jaws are Horror films, but in essence they contain the elements needed for Horror.
Independent New Wave
Under the surface of the big budget studio films there was an explosion of Independent Horror films made for shoe string budgets with huge box office returns or cult status. These films were very much focused on the inner horror or the fear of those around you instead of a monster or a 
pending threat from another world. Films like 1972's The Last House On the Left had a huge impact on the tone of the films of the decade including the recurring theme of censorship of graphic films. This film as well as 1978's I Spit On Your Grave created the “rape and revenge” genre which was not exclusive to Horror as it included films like Death Wish (1974) and Sudden Impact (1983).
1974 saw some of the first Slasher prototype films with Tobe Hooper's The Texas Chainsaw Massacre and Bob Clark's Black Christmas. While neither of these films relied on heavy gore, the 
archetype of a mysterious killer is present with the film's protagonists being murdered one by one. Both of these films were made for $300,000 and $620,000 (respectively) and grossed millions of dollars; Texas Chainsaw grossing $30.8 million. The 70's continued on giving the US more and more independent gems such as Alice, Sweet Alice (1976), Carrie (1976), Eraserhead (1977), and Phantasm (1979).
Two of the most important American independent Horror films in the 70's were John Carpenter's 1978 film Halloween and George A. Romero's 1979 film Dawn of the Dead. Both highly influential, highly regarded, and successful financially. Halloween, for many years, was one the highest grossing independent films made; with a budget of $300,000 and grossing $70 million. The film went on to influence the Slasher genre in the 1980's by providing the tropes of the silent and slow
walking killer in the form of the legendary Michael Myers (which can be traced back to the Universal Mummy films or zombies in Night of the Living Dead), the final girl trope, and sexually promiscuous and substance abusers are killed off. Halloween, of course, handles these tropes far better and in a much more subtle manner thanks to Carpenter's influence from filmmaker's like Howard Hawks and Alfred Hitchcock instead of the carbon copies that followed. Even though there are Slasher-esque films like Psycho, The Texas Chainsaw Massacre, and Black Christmas predate Halloween; historians usually attribute it a the first true Slasher.
Dawn of the Dead is the sequel to Romero's debut film Night of the Living Dead and unlike many gore staples of Horror, Dawn received initial critical acclaim upon release instead of over time. The film carries itself with social commentary on consumerism (being set mostly in a mall) and modern society at the time, while also not taking itself too seriously having a sense of humor. The
film features makeup and practical effects from the legendary Tom Savini– who also appears in the movie as the leader of the biker gang that attacks the mall. Most people consider it to be the best of Romero's Dead films or the best zombie film in general. The film was released internationally, which helped its financial success, thanks to the help of Italian filmmaker Dario Argento who collaborated with Romero on the international cuts of the film (retitled as Zombi) as well as financing for the budget. The film was made with $1.5 million and grossed $55 million and spawned many sequels from Romero himself as well as an unauthorized sequel in Italy directed by Lucio Fulci, titled Zombi 2.
Italian Horror
Italian Horror is widely regarded as some of the best in the genre with filmmakers such as Dario Argento, Mario Bava, Umberto Lenzi, and Lucio Fulci churning out classics from the mid 60's to the late 80's. Italian Horror is usually characterized by a very distinct cinematography, stylized violence and surreal music. Italian Horror is pretty broad in nature ranging from Gothic tales to serial killers to zombies to cannibals. It is incredibly important to note is the Italian creation of the “Giallo film.” Giallo is a genre of literature and film that contains elements of mystery with slasher, supernatural horror and/or crime fiction elements. Giallo films are a genre worthy of an entire book there are so many made in the 60's, 70's and 80's with some small pocket resurgence in modern times.
Among the most famous Italian Horror directors the two most influential are Dario Argento and Mario Bava. Both are acclaimed and have brought classic films the the Horror universe. Bava is usually credited as the “Godfather of Italian Horror” with films like Black Sunday in 1960, Black Sabbath (which inspired the famous Heavy/Doom Metal band) in 1963, and the giallo film Blood and Black Lace in 1964. Bava thrived in the early 70's with films like Hatchet For the Honeymoon in 1970, Bay of Blood in 1971, and Baron Blood in 1972 but was disheartened by his increasing decline in critical favor and financial success. Bava died of heart failure in 1980 sadly ending his career.
Mario Bava paved the way for the legendary Dario Argento to transition from his early work as a screenwriter, most famously on Sergio Leone's masterpiece Spaghetti Western Once Upon a 
Time In the West, to a director with his debut film The Bird With the Crystal Plumage in 1970. This film is known as the first in Argento's “animal giallo trilogy” followed by The Cat o' Nine Tails in 1971 and Four Flies On Grey Velvet in 1972. Argento took some time off for a few years doing television and comedy but returned in legendary form with 1975's Profondo Rosso (Deep Red) which is often considered by most critics to be the greatest giallo film ever made. The film is also famous for introducing the classic collaboration of progressive rock band Goblin doing the score for Argento films. Argento followed Deep Red in 1977 with what many consider to be his masterpiece – Suspiria. The film is a stylistic showcase of incredible cinematography, haunting and chilling atmosphere, and memorable progressive music score from Goblin. Suspiria has some conventions of giallo films but mostly strays into the realm of supernatural following a coven of witches that reside in a European dance studio. Argento's classic artistic era continued into the 80's with Inferno (1980), Tenebre (1982), Phenomena (1985) producing and writing Demons (1985) which was directed by Mario Bava's son Lamberto Bava, and Opera (1987) before his decline in quality in the 90's to the present day.
Aside from the big two, other Italian directors and films made a large impact on the genre such as the unofficial sequel to Dawn of the Dead titled Zombi 2 directed by the “Godfather of Gore” Lucio Fulci who also brought Don't Torture a Duckling (1972), The Black Cat (1981), The Beyond (1981), The House By the Cemetery (1981), and The New York Ripper (1982). Also worth noting are the films Torso (1973), Beyond the Darkness (1979), Black Belly of the Tarantula (1971), and
the notorious Cannibal Holocaust (1979). Directed by Ruggero Deodato, Cannibal Holocaust has been called a cannibal film and an exploitation film – but it is also the first found footage film and was in fact charged with being a snuff film due to rumors that actors were truly killed on camera.
International Horror
UK
Not only was the United States and Italy churning out high quality Horror films, countries all over the world were throwing their hats in the ring. In the UK the Hammer Horror series was still going strong with Taste the Blood of Dracula (1970), Scars of Dracula (1970), The Horror of Frankenstein (1971), Lust For a Vampire (1971), Dracula AD 1972 (1972), Blood From the 
Mummy's Tomb (1972), and The Satanic Rites of Dracula (1973). Depending on who you ask, the Hammer Dracula films either got better or sillier in the 70's. Other British Horror films include the classic Folk-Horror tale The Wicker Man (1973) which also featured Dracula himself - Christopher Lee as the film's main antagonist as well as the overlooked film Frightmare (known as Cover Up in the US) in 1974. A lot of Horror films were coming out in Great Britain in the 1970's but most of them are considered to be pretty good by today's standards, even the plethora of Vincent Price lead films around that time aside from a few standouts such as The Abominable Dr. Phibes (1971), Theatre of Blood (1973), and Madhouse (1974). Madhouse is specially noteworthy because it brings together both Price and Peter Cushing.
Other European Horror
Germany hadn't been prolific in the world of Horror since the German Expressionist era - the 70's wasn't much different, but there are a few noteworthy films produced at the time. The films mainly stuck to the old style of Horror with Gothic stories and supernatural elements like vampires and witches. Mark of the Devil - German title Hexen bis aufs Blut gequält (1970) features Udo Kier as an apprentice witch hunter to Herbert Lom in a story that contains themes of religious struggle, corruption, and violence. The most prominent and well known German produced Horror film is the
France never was prominent in Horror until the French New Wave of Extremity, but in the 70's there were a few films worth mentioning such as Roman Polanski's The Tenant (1976) - a psychological thriller dealing with themes of doomed cycles, loss of self, social assimilation, and repression with Polanski starring in the main role of Trelkovsky. The Tenant is the third and final film in Polanski's "apartment trilogy" which features Repulsion (1965), Rosemary's Baby (1968), and The Tenant (1976). Another film that's often over-looked is 1971's Don't Deliver Us From Evil which is loosely based on Parker-Hulme murder case in 1954 dealing with satanic and rebellious
