This is something I've been wondering, and it directly affects my career, but I already know the answer: How do you write horror that isn't horror? I hear over and over that "Horror doesn't sell," yet clearly major publishers are regularly printing books that are horror in most every sense but the label on the spine. Truth is, there is no loyal horror readership out there, at least not one that matters enough to influence the publishing landscape. People who read Stephen King obviously aren't embracing other horror authors with a similar passion. This could be because King is one of America's best writers in any form, and he just happens to enjoy writing spooky stuff, at least most of the time. And people enjoy good writing more than they enjoy ordinary writing.
Of course, Hollywood is the exact opposite, and films are more likely to undeservedly be labeled "horror" because the audience for the genre is very loyal and broad. A run of popular horror films have never really carried over or created interest in horror fiction, and I think it's safe to assume this will always remain true--with the recent National Endowment for the Arts study showing a continually declining readership, I believe there will never be a large horror book audience. That doesn't mean people don't read, or that people don't like scary stuff; horror is just as dead as westerns and big-bug monster fiction. Kind of makes you wonder why anybody bothers writing the crap...
Oddly enough, I'm not bitter about it, though I have not yet embraced the idea that I either need to write something else or cleverly disguise the weird stuff in my books. I just kind of fell into a groove, and I don't even read that much horror fiction myself. I don't even view it as a "problem." It's not like I can say, "You're stupid if you don't like horror" or "Everybody loves horror," because it's clearly untrue. It's just reality. Lucky for me, I've never had much use for reality.