Low-budget horror refers to films produced with minimal financial resources, often relying on creativity and innovative storytelling rather than expensive special effects. These films typically feature simple plots, limited locations, and a small cast, allowing filmmakers to focus on building suspense and atmosphere. Many low-budget horror films have gained cult status, showcasing the potential for success despite financial constraints. Notable examples include The Blair Witch Project and Paranormal Activity, which achieved significant box office success and influenced the genre. This approach often encourages unique ideas and fresh perspectives, making low-budget horror a vital part of the film industry.