This chapter begins by tracing the importance of retrojected and grandiose settings to Universal’s first ‘prestige’ melodramas, especially The Hunchback of Notre Dame (1923) and The Phantom of the Opera (1925), clear precursors of the monster films that followed in the 1930s. It then turns to the establishment of the horror film formula, with a special focus on the successes and innovations of Universal Studios and their Dracula (1931) and Frankenstein (1931), which were more indebted to the stage than to their literary sources. It shows how important these films were in cementing a visual iconography for its monsters and in their transplantation of Gothic motifs into present times. Their creation of a franchise model that would see actors returning for the same roles is also discussed, especially how this industrial response would be eventually adopted by British, Italian, Spanish and Mexican filmmakers decades later.