Kids are supposed to say they weren't scared after watching a horror movie, so they wont always provide reliable feedback. That said, the problem when kids are watching older movies is its just very hard for them to relate to the characters or scenario. The truth is, most kids arent all that smart. They typically want and need things laid out and packaged in a specific way.
I couldn't and didn't watch classic horror as a child 'cause the bottom line was I really didnt give a shit about what was going on and there was no way I was going to sit through 90 minuites of a black and white movie, regardless of how good it was. I still remember watching those movies listed as a kid and with the exception of The Evil Dead I hated them all.
I don't think its so much that kids cant appreciate good movies these days, its more that generally speaking they need things packaged in a certain way to appreciate them at all. Take The Evil Dead for example, I loved that movie when I first watched it at around 8 years old, maybe younger, and I love it to this day but what I took out of it when I was 8 was alot different to what I take out of it now.
The most important factor in watching any movie is having the desire to be taken along for the ride.
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