The aliens have already annihilated a Pacific fleet of American aircraft carriers — and, worse, they’ve engineered it to look like China and North Korea orchestrated the attack. The president has ordered a retaliatory air strike, and only one naval vessel stands between the thermonuclear devastation and alien conquest of Earth. It’s a relic of a warship, on its last cruise before being turned into a museum, but its old weapons are still operational, and its captain is determined not to go down without a fight. As the alien ships circle, the captain lowers a pair of binoculars from his eyes and growls, “You won’t sink my battleship.”

This spring, Universal Pictures released Battleship, a $200 million Peter Berg action movie that pitted the American navy against extraterrestrial invaders. But that scene didn’t come from Berg’s Battleship. It came from something called American Battleship, an extremely low-budget picture that came to DVD and Syfy just as Universal’s Battleship hit theaters. American Battleship‘s captain was a far cry from Liam Neeson; it was Mario Van Peebles, the New Jack City star and director who’s spent most of the last decade toiling in television’s guest-spot graveyard. The alien ships look like blocky polygons pulled straight from a Sega Dreamcast animation. The aliens resemble floating rubber octopi. And the movie cost less to produce than 1 percent of Battleship‘s budget. Universal, as you might imagine, was not thrilled.

Before their version hit theaters, Universal filed a copyright-infringement and false-advertising lawsuit against The Asylum, the low-budget production company responsible for American Battleship. In exchange for dropping the suit, The Asylum agreed to change the movie’s title to American Warships. But it was still released, still presented to audiences as a Battleship-esque actioner, and Van Peebles still got to say, “You won’t sink my battleship.” In a press release about the lawsuit, The Asylum’s founders said, “We appreciate the publicity.”

Can you trademark an actual noun? The idea of a battleship?,” asks Boxoffice magazine editor Amy Nicholson. “The movie they should’ve sued over was [The Asylum production] Battle of Los Angeles, because they just replaced the colon in Battle: Los Angeles with ‘of.'”

The Asylum’s tactics are so effective, sometimes even the stars get confused about which movie they’re appearing in.

“A friend of mine was actually in Battle: Los Angeles,” says Battle of Los Angeles star Kel Mitchell, formerly one half of the Nickelodeon sitcom duo Kenan & Kel. “I was like, ‘Wait a minute, I know he’s on set right now. This doesn’t seem like the same movie.’ I was actually confused in the beginning … I actually started to promote with my friend. He was saying, ‘Hey, I’m in Battle: Los Angeles, and check out Kel in the remake!’ It was a lot of fun.”

It’s surprising that The Asylum doesn’t provoke more lawsuits like the Battleship case. In 2008, Fox threatened to sue over The Day the Earth Stopped, for similarities to the studio’s release The Day the Earth Stood Still. But since then, the California-based company has mostly avoided legal trouble while aggressively carving out a risky niche: The Asylum is the foremost home of the “mockbuster.” It’s a term that the company’s founders happily throw around: When a big Hollywood blockbuster production is announced, there’s a better than good chance that The Asylum will rush their own version of the same story, more or less, into production, tweaking the plot and the title just enough to avoid a lawsuit. With awareness high for the title, consumers stumble onto their product and, for one reason or another, spend their money on The Asylum’s productions. That moviemaking formula has yet to produce a classic, but it’s given us some titles that rival the greatest porn parodies: Transmorphers. Snakes on a Train. The Da Vinci Treasure.

“They’re like seagulls,” says Nicholson. “They’re cannily taking advantage of the marketing that other people are doing. It’s a smart move.”

The Asylum doesn’t have a patent on mockbusters. Brazil’s Video Brinquedo and the U.S.-based Gaiam have been making knockoff versions of popular kids’ movies for years; their respective catalogs include Ratatoing and Tappy Toes. But The Asylum is more prominent than either, and in using live-action blockbusters as their raw materials, they’ve put a human face on the enterprise. Like other straight-to-DVD studios, The Asylum never reveals its grosses, but Nicholson says, “They’re definitely the most infamous of the mockbuster makers, which would make me think they’re among the most profitable.”

The Asylum doesn’t just make mockbusters. They’ve done ace work in Z-grade schlock genres: giant-monster movies (Mega Shark Vs. Giant Octopus, Two-Headed Shark Attack), ’80s-style sex comedies (Bikini Spring Break, 18-Year-Old Virgin), a series of 2012-themed Mayan apocalypse movies that, the company’s founders are quick to point out, predate Roland Emmerich’s Columbia-financed 2012. While Netflix, Blockbuster, and Redbox have been their primary carriers, a change in strategy has begun. Many of their movies have begun to debut on Syfy; last year, they even produced a Lifetime movie, Born Bad. But the video mockbuster business defines the company’s identity, if only because no other movie house displays anything close to their shameless mercenary gall.

The Asylum wasn’t always in the mockbuster business. After years of nibbling around the periphery of the film industry, former Village Roadshow Pictures executive David Rimawi, magazine publisher David Michael Latt, and screenwriter Paul Bales united to form a production company in 1997. They wanted to make their own movies, but they got their start editing trailers for other companies’ films, and then by distributing no-budget indie films like Burnzy’s Last Call and I, Zombie: The Chronicles of Pain to Hollywood Video. When they finally got around to their own films, they started with horror; their first was 2003’s King of the Ants, from director Stuart Gordon, famous for cultish grossout fare like Re-Animator. But there was a lot of competition in low-budget horror — Rimawi claims that Lionsgate, on the heels of Saw‘s success, was flooding the market — so they quickly moved on to sci-fi movies, figuring that they’d find concepts with a built-in audience if they based their movies on works in the public domain.

In 2005, the trio was considering an adaptation of H.G. Wells’s War of the Worlds when they learned of the impending mega-budget Steven Spielberg version, starring Tom Cruise. “We thought, Well, there goes that. Nobody’s going to be interested in seeing a million-dollar version when they could see a hundred-million-dollar version,'” Rimawi, 49, says. “But we asked our Blockbuster buyer at the time, and he said no, on the contrary, that there’d be a huge interest.” The Asylum version of War of the Worlds turned out to be far more successful than their other movies to that point — and a business model was born.

The Asylum’s War of the Worlds starred C. Thomas Howell, the veteran actor who co-starred with Cruise in The Outsiders. (Rimawi says that was a “complete coincidence,” not some deep cineaste in-joke.) And before Howell landed a role on the acclaimed TNT cop show Southland, he starred in The Asylum’s The Day the Earth Stopped.

Howell is probably the ur-typical Asylum regular, but plenty of other still-kinda-famous types, working actors circling the rim of Hollywood, have found consistent work (and a regular paycheck) in these shadow productions: sci-fi lifer Bruce Boxleitner; lunatic scion Jake Busey; ’80s teen-pop stars Tiffany and Deborah Gibson. Former Baywatch star David Chokachi has appeared in several Asylum movies. “These cats are the absolute coolest,” Chokachi says. “They’re just a mellow group of guys, and it’s a fun company to work for.”

The Asylum occasionally scores a minor casting coup, like Ving Rhames, who appeared in last year’s Zombie Apocalypse. But this is a universe where Reginald VelJohnson, best known as Family Matters‘ paterfamilias Carl Winslow, is an above-the-title star — and the only face in the cast that’s even vaguely familiar. “We know not to go after Johnny Depp,” says Latt, 46. “But we’ll go after Johnny Depp’s cousin. That’s fair game.”

From the looks of things, they also go after the cousins of the Pirates of the Caribbean special-effects team. Asylum movies typically feature computer-generated effects, but they’re not good effects. At their best, Asylum’s in-house effects team can manage something slightly more lifelike than what you’d see on the average Hercules: The Legendary Journeys episode. At worst, well, it’s bad. But what they lack in dynamism, they make up for in sheer gonzo absurdity. The huge Hitler-headed killer robot from Nazis at the Center of the Earth isn’t especially well rendered, but it’s an image you won’t soon forget.

There’s a reason so many of The Asylum’s mockbusters have a familiar ring. The company emphasizes public domain projects for the same reason as established studios: They can use famous names and ideas already ingrained in the public consciousness without paying for the use. But The Asylum is even less reverent of its source material than is traditional Hollywood. Witness, for instance, Asylum’s Sherlock Holmes, in which Holmes and Watson fight a dinosaur. Or Almighty Thor, where we’re asked to believe that Richard Grieco is a Norse deity. Rimawi says his films are part of a companion initiative.

“We don’t pose any threat to the revenue that’s generated by these giant films,” Rimawi says. “We look at ourselves as being a part of the release of the other movie, not detracting from it.” Though Rimawi’s motives are suspicious, there’s something to his line of thought; a movie seems like a marginally bigger deal when it’s got a mockbuster to call its very own.

From a distance, The Asylum has built a business model around confusion and deceit. But the founders insist that this isn’t the case. “Certainly, you can find anecdotal evidence of someone, usually a senior citizen, who didn’t understand that Transmorphers wasn’t their grandson’s favorite movie,” says Rimawi. “But that’s exactly what it is: It’s anecdotal. We know that there are people who seek out our movies, and they get it. They have fun with these movies, just as we do. I think that’s most of the people who are choosing our product.”

If there is any confusion, Boxoffice‘s Nicholson points out that it is as much the fault of the major studio as The Asylum. “If they’re spending $209 million making Battleship, and they think a movie that cost less than a million can be confused for it, they’re probably doing something wrong.”

The idea, as The Asylum’s founders put it, is that at least a few of the people who want to see a big-budget Hollywood version of a story will also want to see its no-budget equivalent. “If you are a fan of giant transforming robots, you are going to find everything you can about giant transforming robots,” says Paul Bales, 48. “You are going to see everything that has anything to do with that. I believe very strongly that that’s why our films are successful, not because anybody is fooled into thinking that the movie they got at the video store is the same one that came out in the theater on the same day.”

Chokachi played a villain in The Asylum’s 2011 version of 3 Musketeers, which reimagines the swashbuckling Alexandre Dumas novel as a thudding modern action movie and which was released at the same time as the Summit Entertainment version that failed to reignite Orlando Bloom’s career. It wasn’t until after he’d finished filming that Chokachi realized his version was pegged to the release of a bigger movie. He also doesn’t much care.

“With this whole mockbuster thing, if you ask me, who really gives a shit?” says Chokachi. “It’s still a movie; it’s entertainment. It’s like the amount of crap we used to get for being on Baywatch. They gave us crap for being on that show, but look at how many people watched it. Billions of people watched that show. There’s an audience for everything.”

According to Nicholson, The Asylum is actually more attuned to what its audience wants than the big studios. “Everyone expected that Snakes on a Plane was going to be this great, schlocky thriller, and it has this predictable ending,” she says. “But Snakes on a Train, the ripoff, at least ends with a giant snake swallowing a train. That’s what people who see that kind of movie want to see, and studios don’t have the guts to do it.”

After his Battle of Los Angeles experience, Kel Mitchell became a fan of the studio’s formula: “I laugh out loud when I see that a film is coming out; I wonder what The Asylum is going to do with it. They’re going to remix that name and put it out.”

Chokachi is just impressed that The Asylum has found a way to keep its films in production. “In our business, it’s so hard to get movies done,” he says. “If they’ve found a way to make it work and make it profitable, I’m all for it. They’ve figured something else out; let them have it.”

Bales stresses that The Asylum’s movies have their own scripts and ideas, and that they don’t borrow anything other than concept and title: “You can certainly argue about the quality of our films, but they do have artistic and creative merit. They’re original stories in their own right. People ask if we see the scripts of the studio films, if we have spies, and we don’t. It’s a matter of the concept, and that’s it.”

And the big studios aren’t the only companies who get the Asylum treatment. One of the company’s biggest successes, Mega-Piranha, was released four months before 2010’s Piranha 3D.

“There was an awareness that piranhas were coming back,” says Rimawi. “But what helped us greatly in making that one of our best-performing movies is that we’d previously released a movie called Mega Shark Vs. Giant Octopus. So in a way, our own movie helped push the interest and success of that film. Sometimes, we rip off ourselves.”

As it happens, 2012 has been a strange year to be in the ripping-off business. The summer’s three biggest movies were all based on comic book superheroes. And with the exception of Almighty Thor — a rare case of a superhero (and mythological Norse god) that is also found in the public domain — The Asylum has shied away from that particular genre. Rimawi’s explanation is simple: People who go to superhero movies go because they love the characters, not because the movies will be good: “They know who Spider-Man is. I just don’t think that if we made Spider-Dude it’d have the same impact. People are going to see movies about characters that they know and love.”

That’s probably true, but it left The Asylum with a relatively uninspiring summer slate. Their two big efforts were American Warships and Abraham Lincoln Vs. Zombies, both of which were inspired by what became studio flops. And, unsurprisingly, their movies perform better when the corresponding studio movies are hits.

Though The Asylum heads allow that those mockbusters’ performances were “soft,” they insist that the movies still have a built-in, genre-based audience, and that that audience will keep them in the black. “When we’re predicting whether a studio film will do well, it’s not because we look at the cast and the filmmakers behind it; we look at the performance of that particular genre,” says Rimawi. “It isn’t too much of a concern for us because they aren’t just mockbusters; they’re movies in a particular genre. American Warships is an action-adventure with some sci-fi and war elements. Abraham Lincoln is a zombie movie. If you make an independent movie that’s an action-adventure/sci-fi or a zombie movie, they’re going to perform in a certain way. They just perform that much better if the movie we mockbust does well.”

Still, The Asylum missed one huge opportunity this year: the eminently mockbustable The Hunger Games. When I mention The Hunger Games, all three partners sort of quietly sigh. Rimawi: “Yeahhhhh, we … Yeah. We haven’t talked about it internally, but if I had a chance to do it again, I probably would’ve [made that movie].” Latt: “We need to pay more attention to teenage girls and look at books. And if we can figure out a title for a mockbuster of 50 Shades of Grey, we’ll be billionaires.”

The Asylum’s founders don’t take themselves too seriously. They actually use the word “mockbust” as a verb in conversation. They’re self-deprecating, too — they casually talk about waiting for their Oscar recognition or for Meryl Streep’s people to call back. They are entirely aware of the ridiculousness of their mission. But things get just slightly uncomfortable when I ask them which of the company’s movies they’re proudest of artistically.

After a noticeable pause, Rimawi says that while a handful of their movies do have “artistic elements,” that’s just not something they’re concerned with. The Asylum wants its movies to be entertaining and, more to the point, profitable. These movies are low-risk, low-reward business ventures, and they never pretend or attempt to be anything more. The Asylum is not in the auteur business.

There’s a natural parallel between The Asylum and Roger Corman, the legendarily prolific B-movie producer, particularly when you consider that latter-day Corman productions like Sharktopus look a whole lot like Asylum movies. But Corman has been instrumental in launching the careers of important filmmakers like Martin Scorsese, Peter Bogdanovich, and Jonathan Demme. When I ask if The Asylum has helped build any similar success stories, Rimawi says, “You know what? We’ve noticed that Corman had more success launching major auteur careers.” The best example they can come up with: Dick Van Dyke’s grandsons Shane and Carey, who wrote and directed 2009’s Paranormal Entity and 2010’s Titanic II before co-writing this year’s Warner Bros.–backed horror film Chernobyl Diaries.

It’s obvious why this company hasn’t produced an important filmmaker. It’s hard to imagine a studio executive watching an Asylum product and gleaning artistic intent. This is smash-and-grab filmmaking, fast and cheap and loose. Asylum has a house style, one characterized by wooden acting, unforgiving lighting, and those brain-wreckingly crude CGI effects. In short, The Asylum has done everything possible to minimize time and maximize profit.

That formula has turned the company into an efficient moviemaking machine, one that doesn’t waste time or money and generated a reported profit margin of $5 million last year. “They have a system down that just works,” says Chokachi. “The way for them to make it work is that they have to make a certain number of movies a year. They just go about getting their material, getting their cast, putting their team in place … They plan their days, every day, so there isn’t any overtime, and they finish their movies on time, which is unbelievable.”

Once upon a time, that brisk efficiency at the expense of quality would have meant that The Asylum’s movies went from production straight to drugstore-rack obscurity. But in recent years, the B-movie landscape has seen a small boom; standards are rising. We’ve entered an era in which those movies are sometimes stronger and more memorable than their theatrical predecessors. Consider, for example, the directors Isaac Florentine and John Hyams, who have made minor visceral classics out of their straight-to-DVD sequels to, respectively, the Wesley Snipes prison-boxing movie Undisputed and the golden-era Jean-Claude Van Damme zombie-military picture Universal Soldier. Neither Florentine nor Hyams is the next Scorsese, but they traffic in seriously intense and enjoyable genre movies. The Asylum’s house directors never give that impression, since half-decent budgets are effectively unthinkable in their universe.

Unlike their contemporaries, The Asylum’s movies are also not campy fun. Sure, Nazis at the Center of the Earth has its moments of inspired lunacy. But they tend to be more fun to think about than they are to watch. With these movies, the question isn’t even about quality; it’s how well they impersonate their inspiration. Grimm’s Snow White, it turns out, does well enough. The story is adequate, the set design is strong, and star Jane March gives a commendably icy performance. Those virtues coexist alongside Prince Alexander fighting giant, terribly rendered CGI dogs, but they’re virtues nonetheless. On the other hand, the starless Fast Five mockbuster 200 MPH doesn’t even make a passable fake movie. Its IMDb page is riddled with posts from car enthusiasts incensed at the basic automotive facts that its script mangles — mistakes that seem especially glaring because there’s barely a movie there to distract from them.

It might not make for great movies, but Nicholson points out that the studios could learn something from The Asylum’s frugality: “If you can spend less than a million dollars to make a film that easily makes back its money, it makes you wonder why the studios are doubling down on these $200 million budgets, where they really have to struggle to make their budget back. If Battleship cost $209 million and made just over [$300 million internationally], it really didn’t break even, when you add in all the marketing costs. I think that what’s going wrong in movies now is that studios are spending too much and investing too much in one product, in one film every season. And because of that, they’re playing it safe, being cautious. These films are really easy and unambitious. And if they lowered budgets for films like The Asylum has shown you can do, studios would feel free to take more of a risk. I’m not going to say The Asylum is where good movies are being made, but at least they’re making interesting movies.”

And even if most of The Asylum’s movies are functionally unwatchable, there’s a joy in witnessing its no-budget machine in motion. It takes a certain punk-rock panache for a company to unapologetically position itself as a parasite on the movie business. Most of the company’s recent releases start with a promo reel that features giant sharks eating airliners and CGI robots marching through city streets. Its text might best encapsulate this company’s quixotic swagger: “15 years, 100 films. You’re welcome.”

That’s an overblown message, but there’s something true in the sentiment. Whatever you may think of its work, The Asylum indisputably makes movies. And they plan to continue making movies for as long as possible. “In 10 or 15 years, I hope we’re doing exactly what we’re doing now,” says Rimawi. “It’s what we always wanted to do when we were kids. Whether they stay the same or get bigger, it doesn’t change that we’re creating in the business that we want to be in.”

The Asylum isn’t planning on any swings at respectability anytime soon, though just last week their first-ever theatrical release, an original horror movie called #holdyourbreath, starring peripheral 30 Rock beauty Katrina Bowden, hit select theaters. But make no mistake, The Asylum is still very much in the mockbuster business. Other upcoming projects include Age of the Hobbits (a “companion” to Peter Jackson’s The Hobbit: An Unexpected Journey) and Atlantic Rim (a mockbust of Guillermo del Toro’s forthcoming Pacific Rim).

When I ask about the rest of their plans for 2013, Rimawi says they’re unsure.

“As soon as the studios release their slates, we’ll let you know.”

Tom Breihan (@tombreihan) is the senior editor of Stereogum. He has written for the Village Voice and Pitchfork. This is his first piece for Grantland.