It's a chilly night in northern Wales, and on the set of the upcoming movie Sherlock Holmes, the famed detective is scampering around a candlelit, 400-year-old stone barn, trying to stab a robot. This is supposed to be one of the film's most gripping moments: a plot-twisting showdown that finds a sword-wielding Holmes battling a homicidal steampunk droid. But because it was choreographed at the very last minute — and because the robot costume is made of plastic and leather — the scene is falling flat. It's hard to think of anything more anticlimactic than the thup of fake steel hitting fake metal.

Today's shoot will ultimately stretch to nearly 16 hours — a grueling schedule for the Sherlock crew members, who, between takes, offer a litany of complaints. The pay is abysmal. The food is lousy. The Welsh marijuana is terrible (and hard to find). And though only a handful of people on set appear to have read the script, those who have grumble that it makes no sense. Especially the part with the dinosaur.

As you may have guessed, this is not the Sherlock Holmes film hitting theaters this Christmas. That version — which cost millions to produce, stars Oscar nominees Robert Downey Jr. and Jude Law, and presumably includes not a single robot fight — is being released by Warner Bros. on thousands of screens across the country. The version I'm watching, also tentatively titled Sherlock Holmes, will cost less than $500,000, stars no one you'd recognize, and goes straight to video this month. This Sherlock bears little resemblance to the detective's literary adventures, unless Arthur Conan Doyle wrote a book titled Sherlock Holmes vs. the Robot, the Dinosaur, and ... I Dunno, a Giant Squid?

The gonzo Sherlock, which you'll be able to find at major rental chains like Blockbuster and Hollywood Video, is the creation of the Asylum, a low-budget studio specializing in shamelessly derivative knockoffs that are not-so-affectionately dubbed "mockbusters." B-movie producers have been cribbing from Hollywood for decades, but none have done so as brazenly or efficiently as the Asylum, which for the past six years has churned out titles like Snakes on a Train, Transmorphers, The Terminators, The Day the Earth Stopped, and, of course, last summer's Transmorphers: Fall of Man. These are uniformly dreadful films, notable mainly for their stilted dialogue, flimsy-looking sets (which are frequently recycled), and turns by faded stars such as Judd Nelson and C. Thomas Howell — actors whose careers crumbled around the same time as the Berlin Wall. Asylum films are ignored by critics and derided by viewers, who clog the Web with negative reviews (and fire off angry missives addressing the Asylum's owners as "bitch turds").

Yet, at a time when major studios are scaling back production, Asylum is thriving — or, at least, surviving. The company's 2009 revenue is estimated at $5 million — an amount that would barely cover Michael Bay's volumizer per diem but enough to make Asylum a reliably healthy business. And the studio is growing. It recently signed a series of deals to air more than 20 films — both "vintage" mockbusters and new titles — on the Syfy network and other NBC Universal cable channels, and it moved to a new production facility in Burbank, California.

The Asylum has even had a hit of sorts: Mega Shark vs. Giant Octopus, a tongue-in-cheek, non-mockbuster monster-mash starring Lorenzo Lamas and former teen pop star Deborah Gibson. Released last spring, the Mega Shark trailer — which ends with a shark devouring an airplane — went viral, garnering nearly 2 million views on YouTube. This helped Mega earn enough of a following to warrant a screening at LA's cineast-approved ArcLight Hollywood theater.

Mega Shark and Sherlock may sound like kitschy B-movies designed to evoke Mystery Science Theater 3000. But in general, the Asylum's films aren't ironic or campy, and they're certainly not parodies. They are actually unnervingly earnest (at least as earnest as a giant-crocodile movie can be) and shrewdly designed to satisfy the predictable cravings of the video rental market. Unlike most film studios, the company's development slate is not dictated by directors and scriptwriters but by distributors, who essentially commission the studio to make movies that hew to a particular genre or theme.

Using cheap digital technology and even cheaper talent, the Asylum can turn around such requests in as little as four months (the Sherlock shoot — one of the Asylum's longest — was 14 days). And though the majority of its films are sci-fi or horror, the company has lately expanded into biblical-disaster movies (The Apocalypse), teen-sex romps (18-Year-Old Virgin), and even family fare (Sunday School Musical). It's a new kind of B movie: low risk and made to order. "I said, 'Make me a T&A movie in 3-D,' and they did that with Sex Pot," says Keith Leopard, director of content acquisitions at Blockbuster. "They're constantly delivering good little filler products for our customers."

This doesn't mean the Asylum can simply coast by on gilded reptiles and optically enhanced boobs. Because its films have minimal marketing, almost no theatrical footprint, and few bankable names, the studio makes most of its money from the people who wander the new-release wall at 11:45 on Friday night. "What sells our films is the fact that you've got a DVD box with some cool art, and it's sitting right next to the studio movies," Asylum partner Paul Bales says. "We've always been in the pretty-box business."

Knock It Off! ————-

Asylum's movies, with their borrowed plots and cheap effects, form a cosmos of knockoffs and tagalongs that try to dry-hump the zeitgeist for all it's worth.

The knockoffs (clockwise from top left): Snakes on a Train, Mega Shark vs. Giant Octopus, Sex Pot, The Land That Time ForgotBut now that movie fans are ditching video stores for the Web — and video-box art is being reduced to the size of a comic-strip panel — those impulse customers are becoming harder to find. This means the Asylum needs to devise another way to make its movies stand out. Throwing in a skulking dinosaur — whether it's a T. rex or Lorenzo Lamas — simply won't cut it anymore.

Which helps explain why the Asylum's Sherlock Holmes is so overstuffed — not just with robots, dinosaurs, and squids but also with hookers and a bomb-tossing dragon. It's quite possibly the most asinine Asylum offering yet, but as I watch Holmes chase an increasingly weary-looking robot around an English estate on this long, cold night, I wonder: Will it be asinine enough?

"You should have been here a couple of days ago," one of the crew members says between takes. "We were on a boat, watching a guy get hit with a giant tentacle. It was much, much warmer."

The Asylum is headquartered in a single-story building about a 10-minute drive from the Warner Bros. and Disney lots. When I visit, there's a stuffed dinosaur and a fake whale carcass sitting unwanted in a prop room. Down the hall is the office shared by the company's partners: Paul Bales, 45; David Michael Latt, 43; and David Rimawi, 46.

The studio was founded in 1997 by Latt, who'd been making interactive CD-ROMs, and Rimawi, a former sales exec at Village Roadshow Pictures, the production company behind The Matrix. After a third partner left, the studio hired Bales, who was then a liaison between the Screen Actors Guild and the indie-film community. Latt makes the movies, Rimawi oversees marketing and sales, and Bales balances the budgets, but the three men's responsibilities often overlap (Bales has written several Asylum screenplays, including Sherlock).

The company started as an art house distributor, but when the indie craze subsided, the Asylum moved into producing straight-to-video horror films. A few years later, the major studios began releasing their own torture-porn and shock-gore titles, glutting the market.

In late 2004, as filming for Steven Spielberg's War of the Worlds was wrapping up, the Asylum discovered that the copyright on the H. G. Wells book had expired (as has happened with the Sherlock Holmes stories). So it decided to produce its own version, directed by Latt and starring ex-Outsider Howell. The slapped-together movie became an unlikely rental hit — particularly at Blockbuster — and the partners began looking for other mockbustable targets. Within a year, they released knockoffs of King Kong (titled King of the Lost World) and When a Stranger Calls (rechristened When a Killer Calls). "Initially people's jaws dropped, because we're a little audacious in terms of how we tie into other movies," Rimawi says. "But this practice has been in the film business for a long time."

Though mockbuster is a fairly recent term, the dubious art of piggybacking on another franchise is a time-honored Hollywood tradition. In the early 1950s, for example, a young script reader named Roger Corman sold a screenplay he'd cowritten, The House in the Sea. Shortly before the film's release, the producers changed the name to Highway Dragnet, a last-minute attempt to cash in on the famed TV series. The movie did well, proving the wisdom of linking your product to a better-known entity. (No one learned this better than Corman, who went on to produce nearly 400 titles, including Bloody Mama in 1970 — released after the success of Bonnie and Clyde — and 1993's *Carnosaur,*which came out a few weeks before Jurassic Park).

In fact, it's hard to think of a hit that hasn't been plundered, whether with a misleading title, a look-alike poster, or an entire plotline. The Jaws franchise spawned an entire subgenre of underwater-attack films, from 1977's Tentacles (starring a soused-looking John Huston) to 1984's Monster Shark (which isn't even really a shark). Star Wars inspired such homages as Starcrash, a 1978 goof starring David Hasselhoff, and the cult hit Turkish Star Wars, which spliced in actual footage from A New Hope. The success of E.T.: The Extra-Terrestrial led to Mac and Me, about an alien who eats Skittles, break-dances, and befriends a boy in a wheelchair.

While mockbusting may seem disreputable, it's merely an extension of the sort of cultural cannibalization that fuels the entertainment and media industries. Every hit property, whether it's American Idol or Twilight or Harry Potter, spurs its own parallel economy, a nebulous cosmos of TV specials and publications that attempt to dry-hump the zeitgeist for all it's worth. Some of these efforts are subtler than others — putting a sitcom star on a magazine cover, for example — but all take advantage of a cultural momentum they didn't create. In the end, is there really much difference between the Asylum's Da Vinci Treasure and the countless unsanctioned Da Vinci Code TV specials, books, and tours?

And while the Asylum's founders readily acknowledge their artistic devolution, they also point out that, whether respected or not, they're making movies that actually get seen — no small accomplishment. "It's fun to tell a story, in any capacity," says Latt, who made Super-8 films as a kid, including a proto-mockbuster titled The Six Million Dollar Boy. "I'm living the dream."

Knock It Off! II —————-

Asylum's movies, with their borrowed plots and cheap effects, form a cosmos of knockoffs and tagalongs that try to dry-hump the zeitgeist for all it's worth.

The knockoffs (clockwise): AVH: Alien vs. Hunter, Dragonquest, 2012: Supernova, Transmorphers: Fall of ManAccording to the Asylum, even its lesser-performing titles have made a profit, however middling. This raises the question, what exactly drives a person — even bored on a Friday night — to rent AVH: Alien vs. Hunter over AVP: Alien vs. Predator? Certainly it's sometimes just mistaken identity. But if that were always the case, video stores would be inundated with complaints, and they aren't.

Probably the best explanation for the Asylum's success is its exquisite timing. Multimillion-dollar marketing budgets create the hunger for a certain type of movie, and the Asylum can get something that satisfies this demand into the hands of home viewers at just the right moment. Thanks to advances in digital video equipment, the company can even make the product look, if not quite Weta-worthy, at least passable: It has never been easier to put a marginally convincing-looking pteranodon onscreen.

It helps that, over the past decade, megamovie filmmakers like Roland Emmerich (2012) and Michael Bay (Transformers) have made it easier for us to accept — and forgive — the sort of strident malarkey found in the Asylum's films. Take away the effects budget and A-list stars, and most blockbusters are no less ridiculous than their Asylum counterpart. (Lest we forget: Bay's first Transformers film centered on a pair of magical eyeglasses.)

The Asylum simply strips away all of the lofty ambitions found in a big-budget spectacle and boils down the hot-selling concept to its essence. If the movie is about robots, you get robots. If it promises dinosaurs, you get dinosaurs. "We don't skimp on the genre," Latt says. "When I talk to writers, I say, 'OK, take a three-act structure. Write your first act, your second act, your third act — let's develop it. Let's get it good. Now take the first and the second act and throw them away. I only want to make act three. Because that's when the drama happens."

The result is a popcorn movie without pretensions — or hackneyed moralizing — which many genre fans appreciate. "I will go on record to say Transmorphers is better than Transformers 2," says Kevin DeBolt, a 36-year-old Asylum fan from Chicago. "At least with Transmorphers, you know what you're getting into when you start watching. "

Of course, nailing the timing — not to mention making money — is greatly helped by the fact that the Asylum consults with its distributors, who carefully study the market and have a good idea of what will rent six months down the road. "There's nothing wrong with people who have a passion project — their black-and-white coming-of-age film," Bales says. "But it's hard for films like that to find an audience. We've listened to our buyers. And when they say, 'We need this,' we take it seriously."

Often these requests are very specific: A few years ago, the Asylum's Japanese buyers asked for a submarine thriller. But when the idea was pitched to Blockbuster, the video distributor balked, prompting the Asylum to suggest adding a monster plotline. Both parties approved — so long as the monster was a giant squid. Then all the Asylum needed to do was incorporate the two elements into one semi-coherent plotline. "I said, 'What if we did 20,000 Leagues Under the Sea?'" Latt recalls. "'We'll call it 30,000 Leagues Under the Sea. It's 10,000 more leagues.' Everyone liked that, and it did well at the end of the day."

At the Asylum, this emphasis on marketing often dictates the filmmakers' artistic decisions. Toward the end of shooting Snakes on a Train, line producer Anthony Fankhauser (who got started with the Asylum after answering a craigslist ad) received an unusual request from the bosses: Could the movie's ending be changed to look more like the video box? "The cover was just a giant snake eating a train," Fankhauser says. "So on day 10, we had to cobble together this scene where one of the characters turns into a snake, crashes out the side of the train, and then eats it up. A lot, if not all, of these movies are dictated by such terms."

On a late-summer weekday morning, Latt is sitting in one of the Asylum's in-house audio studios, listening as Oscar-nominated actor Bruce Davison lets forth a torrent of bemused vulgarities. Davison, best known as the evil senator in the X-Men films, is here to rerecord some dialogue for the earthquake thriller Megafault, in which he plays the director of FEMA. "'The tectonic weaponry destabilized a volcano'?" Davison says, laughing. "That's a mouthful of horseshit."

Latt, who's in the next room, agrees and tweaks the script slightly. Megafault is the most expensive Asylum production yet, with a better-than-usual cast that includes Davison, Brittany Murphy, and ER's Eriq La Salle. These are performers who likely wouldn't have returned the Asylum's calls a few years ago. But with the economy hobbling studios' production budgets, fewer and fewer in Hollywood can afford to turn down a gig. (The company has even talked to Jennifer Love Hewitt about directing a film.)

After the success of Mega Shark, the Asylum's strategy would seem obvious — pump out more monster movies, each accompanied by a blog-stoking trailer. The problem is that the viral hype surrounding Mega Shark has proved difficult to duplicate, and online attention doesn't seem to help the company's traditional revenue stream: Shark's Netflix rental numbers were fine, but the movie's video store sales were only so-so, even by declining rental standards.

Instead, the Asylum has decided to beef up production budgets in the hope that modest star power and improved effects will bolster its relationships with TV networks. To test this theory, the company has poured $2 million into Megafault, which is set to air on Syfy before going to video. It's a chancy strategy, but a few months after my visit, the gambit seems to be going well: Megafault attracted nearly 2.5 million viewers, making it one of Syfy's most-watched original movies in two years.

The Asylum keepers insist they're not abandoning the mockbuster, but after Sherlock is released the company plans to follow it up with a meteor film, an airplane-disaster movie, a western, and something called MILF. When I ask Rimawi where he sees the company heading, he cites literary adaptations in the vein of Sherlock, plus sex, dinosaurs, and the apocalypse (look for Bi-Ceratops 3: The Rapture Cometh in summer 2011). "Mockbusters will come and go," he says. "I can see a time when it's something we're not involved with at all."

Rest assured, no matter what the Asylum does next, the result will be proudly, defiantly crappy. "A few years ago, I was reading a magazine profile on Jerry Bruckheimer," Latt says. "Their opening paragraph was 'Schlock filmmaker Jerry Bruckheimer is doing his latest big-budget film.' And I'm thinking, this is a man who's made billions of dollars, a man who does only A-level films and television. And they characterize him as a schlock filmmaker. If that's who my company is, I'm fine with that. Because people tell me that all the time."

Contributing editor Brian Raftery (brianraftery@gmail.com) wrote about Tim and Eric Awesome Show, Great Job! in issue 17.11.