That “how do you know if a movie is a bomb” prompted this question.
So, what happened to movies made in the pre-VHS, laserdisc, DVD, etc. era that were deemed too bad to put in theaters, or didn’t make it on the market for whatever reason? Were they shelved, rewritten and reshot, or what?
That was before my time and someone more knowledgeable will probably come along soon with better info, but I’d guess that plenty of movies that would now be considered direct-to-video fare were shown in theaters in the past. It was at one point common for low-budget “B” movies to be shown as part of a double feature with classier (or at least more expensive) “A” movies.
You should understand that before the 1970’s it was standard for most films to “open small.” Jaws in 1975 is usually cited as being the first movie to be treated as a potential blockbuster before its opening. It opened on 460 screens on its first day, which was considered a huge number of screens at that point. It had a huge (for that time) amount of money spent on TV advertisements before its opening. Before that, films didn’t open big. They opened on a few screens in big cities. If they did badly, they just weren’t shown anywhere else.
There was also always the TV outlet for movies of all stripes. Drive-in theaters were also prone to pick up things that made the screens bright enough that you could see without the dome light on! 
(Many “attractions” in those venues were purely to provoke teenagers to park at the theater instead of on Lover’s Lane. There were also adults with the same objective in mind.)
Just for the laughs, it would be fun to find the name and date of the first recorded movie for commercial use, and in what format that recording was made. I’d have to guess it was something in the 70’s and possibly on Beta. But that’s a raw guess before attempting to find that answer online.
This could be a really fun topic with many offshoots!
Before 1948, all movies had places to show them. Studios owned theaters, so anything they made would go into theaters for at least a week. Some of the theaters were small, neighborhood ones, who only needed a small audience to break even, and people would go even if the film was bad, since there were short subject, cartoons, and newsreels to fill in. Some bad films were also designed for Saturday matinees, whose audience was kids who weren’t too critical.
All movies were considered disposable. A handful of classics were rereleased, but 99% of all films were released and then forgotten. It wasn’t until TV came along that producers realized the movie could make them money after the first run.
The studios had to divest in 1948, but the neighborhood theaters stayed on for a few years. In addition, drive-ins became big in the 50s. They also had a teen audience, many of whom were more interested in what was going on in the car than watching the movie, anyway.
As Wendell pointed out, movies were released in waves. The big city first-run houses would get them first, then they’d spread out. When I was growing up in a small town, the theater usually ran movies at least a month old.
By the 60s, the neighborhood theaters were dying, but you could still expect some income from TV showings. The movie might only show a week or so in a handful of theaters, but then be sold to TV stations. Movies were sold as packages, so to get a big name film, you had to accept a few dogs, which you’d probably run at odd times, like after midnight.
Zeldar, what about 8mm? Especially in the '50s? It had to be used for something besides stag films. Probably pricey and a pain having to change reels, though.
Just mentioning this in passing: In high school in the mid-to-late '70s, we had film classes (considered English courses), and one teacher was the sponsor for an after school club that would rent and show movies on Friday nights. If we were tight for funds, we’d show whatever was in class that week (e.g., “Creature From the Black Lagoon” [in 3-D]). After several of these, we could rent a big name flick–our biggest was “Towering Inferno.” With “The Song Remains The Same” coming in a close second. We would buy bulk candy and 2-liter botts of pop to sell and every one had a great time. Rather successful venture.
I’ll bet all of the “educational” films we saw in school (Bell Laboratories, National Film Board of Canada, Encyclopedia Britannica, etc.) were 8mm.
God, how I miss those, especially the sex ed (“health”*) and driver’s ed movies. Prom Night (driver’s, not sex ed) was my favorite. It practically wrote itself! :o
*The ones where they showed sweaty armpits and dads sitting in the corner of the living room with their pipes and newspapers, trying not to look creepy, were the best!
Doper, please! Our Driver’s Ed film was 16mm, in lurid color and titled Mechanized Death! The guys stared, the girls cringed, the teacher snoozed! 
You were lucky! All we ever got were B&W movies made in the '50s. You must have gone to junior high later than I did. 
Cartrivision was the first home video format in the U.S. to offer prerecorded movies for consumers to watch on their home TVs. It came out in 1972, three years before Sony’s BetaMax format.
Kinda like NetFlix, where movies were mailed to you, then you mailed them back after you watched them. Major movies were only available for rental, but other types of features were available for purchase.
Turner Classic Movies shows some of those old educational movies, usually late at night. There doesn’t seem to be any set pattern for when they’re on, so check your listings if you’re interested. They also sometimes show old cartoons that have often been censored on various levels.
C-SPAN 2 and 3 have interviews with authors and historians on the weekends, and have shown some of these movies too, albeit more serious ones.
I had totally forgotten about double features. My brother used to go to kung fu movies with his friends on Saturday mornings; those would sometimes air on TV, and hoo boy were they bad! 
Not too bad for 10-year-old boys, however.
Back in the old days the physical movie reels were capital assets. You printed as many as you thought you’d need for the movie’s release, and then the movie reels would tour across the country, first in the big cities, then the secondary cities, then the small towns. All the time reels would pick up wear and tear, local censors would literally snip out chunks of the movie and tape it back together and throw the snipped bits in the trash, and so on. Once a reel got battered enough it would just be thrown out, or warehoused in some basement. After being worn out in every third string theater in America then surviving prints would be shipped overseas.
The key point is that the movie wasn’t considered archival, a thing that could be watched again and again. The physical print of the movie would only last so long, and there were always new movies coming out, nobody wanted to watch yesterday’s garbage when there was always new garbage to watch. And once the physical movie prints wore out that was typically the end of the movie, there might be archives somewhere in Hollywood, or in some collector’s vault, but nobody is going back to the master to make new prints of an old movie. The print is like a car, you drive it into the ground until it’s worthless and then you throw it away. And making a print is a fairly expensive process, the physical production of the movie reels was a non-trivial capital investment.
No, those were filmed on 16mm.