Freaks has been depicted as a melodrama but also a horror film as well. I am partial to the horror film depiction because of the very strong horror aspects of the film towards the end.This is scene when the film starts to change, and when Cleopatra gets a little drunk and starts making fun of and belittling the "freaks". The reaction from the freaks indicates the beginning of the rise of horror.

A horror film is supposed to draw out a negative feeling when you watch it. There is no doubt that the following scene, after Cleopatra yells at the freaks, that a negative emotion is evoked when she had poisoned Hans.
By this scene, the freaks are after Cleopatra and they are crawling, the emotion that comes is fear. There are a gang of deformed freaks that all want to get you, at this point the freaks have lost any humanity that they had left by going after Cleopatra and making her into one of them.
 The freaks mutilate Cleopatra and turn her into a chicken lady, this was what shocked audiences, this is the reason why there was so much controversy with the film. Freaks is a definite horror film, although it may not rise to the level of production of this day and age, the film did an excellent job of scaring the audience and having many of the typical elements of a horror film. Aspects such as a calm introduction, and then a turning point that starts the horror. It evokes fear from the audience.