"I think Black Christmas has the best character development I have ever seen in a slasher.. "
Indeed, and that's a gigantic part of why that one works so well.
People go on and on about how much character development Halloween has, how well drawn the characters are, etc. Like it's a Chekov play. Just because we spend seemingly endless amounts of time with those characters doesn't mean they're developed or three dimensional.
Personally, I think one of the strengths of The Prowler is it's economy. It's pared down style definitely helps the pace of the film, the building tension of the stalk and slash sequences, etc. It's to the detriment of any true character development, sure, but this isn't a movie about getting your heart broken because you've fallen in love with the co-ed knife fodder. It's just supposed to be a white knuckle tense slasher movie and on those grounds, it delivers. How much do people really want to get to know any of these characters? Their hopes, their dreams, their secret longings? It doesn't effect what this kind of movie does. Usually, attempts to do that ring hollow and disingenuine, or have a reverse effect. Spend too much time with a character (Jamie Lee Curtis in Halloween, Neve Campbell in Scream) and you start rooting for the killer to just shut them the hell up.
It falls to an actor to make a character likeable or relatable with limited amounts of material - but slasher flicks, even the best ones, are roller coaster rides. And to further the analogy, if the car (the protagonist) is solid then the ride (movie) is a blast. But you don't always want to spend two-thirds of the ride getting a feel for the car, and if you do it too much you might start to see some serious cracks and the ride becomes a whole other kind of scary.
There's a place for character study horror, but it doubles back on itself in several ways in slasher movies. For one, there are always a lot of red herring characters that need to be a little ambiguous. You don't want to over write that, it tips your hand one way or another. Same goes for who ends up actually being the killer - you don't want to do anything that indicates anyone one way or the other when the crux of your story is predicated on the mystery element. There are graceful ways to write good character moments minimalistically, but it's a tightrope walk not to alienate your audience by giving too much away or destroying the pace. You run the risk of the material becoming parodic. Give every character a profound arc and it's a soap opera, and that's even worse than thin characters.
This is one genre where a lack of character development isn't necessarily a minus. It can actually be used to finesse a plot or mislead the audience. I've found that if you make a character likeable, just likeable, it works better than dramatically dimensional or complex. Some of the finest instances of this occur in what are ostensibly labeled horror comedies, because if somebody's funny, they're often endearing. And if the horror is cranked as high as the comedy - it's hard to take the hit when a funny character bites it. I know it's a weird example, but Club Dread pulled it off really well. You don't need well rounded development to become attached to a character and feel for them. And if the movie is technically well done (like I thought The Prowler was) then you can't help but get wrapped up in the tension and that should make you emotionally involved.
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