The crusty brownish red stuff in your horse’s ears is likely dried blood, resulting from insects biting/feeding in your horse’s ears. Black flies are often involved in causing the problem. As to solutions, there are several things that can help reduce the biting. First, if your horse is not a show horse, do not clip the hair out of his ears. The hair is there to help keep the insects from easily getting to the skin. Using a fly repellent such as “Swat” paste in the ears will help control the damage to his ears. Finally, if your horse will wear one of the fly masks with ear covers, this will help to protect both his ears and eyes from biting and irritating insects. If the problem is not helped by these suggestions, contact your veterinarian, to do an examination.