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Supposedly, this is a true story (I've heard it from two sources, at least): In 1982, Samuel Z. Arkoff, the famous producer of B movies, was in the midst of promoting one of his most recent projects, Larry Cohen's Q: The Winged Serpent - in which New York is terrorized by a giant flying dinosaur that may or may not be the Aztec god Quetzalcoatl - when he was approached about the film by critic Rex Reed. Opined Reed: "What a surprise! All that dreck - and right in the middle of it, a great Method performance by Michael Moriarty!" Arkoff is said to have offered a "thank you," adding, "The dreck was my idea."
Q, in case the era and plot description didn't make it obvious, is from the tail-end of what were called "grindhouse movies." These days, it seems like everybody wants to make grindhouse movies.
Okay, maybe not everybody, but lots of people. Movie people, I mean.
Grindhouse, of course, also refers to that Quentin Tarantino/Robert Rodriguez movie that everyone discovered was awesome about a month after it was too late and the thing had already died in theaters. (Way to go, America.) But more importantly, it refers to the movie subgenre it both mocked and celebrated.
For those who have little to no idea what I'm talking about: Back in the day (well before mine, even), instead of multiplexes you had thousands of single-screen movie theaters all over the place. As such, not every theater was necessarily showing the same big new hit every week; instead, some would run older movies ("revival theaters"), others (for a time) would run pornography and some - mostly in sparsely populated rural areas or "unsavory" urban communities - specialized in the type of low-budget/gimmick-oriented work commonly called "exploitation films." These were the grindhouses, and as such "grindhouse movie" basically refers to any sort of film that would've played there. Kung-fu, Italian horror, sex comedy, Mexican wrestling ... if it was low-end, it was there.
Mssrs. Tarantino and Rodriguez are, of course, of the generation old enough to have seen grindhouse movies in their native environment, whereas I'm of the second wave: the children of the '80s who enjoyed grindhouse/exploitation movies on VHS. See, in the early days of video, most big Hollywood movies weren't available right away. Studios would wait years in between theaters and rental, and some of them didn't want to do VHS at all for fear of lowering ticket sales. This meant that your average mid-'80s video stores filled their shelf-space with low-budget genre films, including tons of the old grindhouse "classics" plus "new" stuff released straight to video.