The movie industry has changed so much in such little time. The studios used to have a 'studio system' which was vertical integration, meaning they had control over every part of the movie making process. A company like Paramount would produce the movie, but they would also only show it in their theaters. Also, actors were contracted out to specific production companies, so if an actor could only do a certain genre, the company could only produce films within that genre. For example, John Wayne was always in Westerns. He was cast specifically for cowboy rolls, so the company that 'owned' him, specifically produced Westerns because that is what their actors could do. MGM used its actors to make Musicals like "The Wizard of Oz" All the studios made a small amount of 'A' films due to the limited funds and stars, but 'B' films were coming out every week.
The only reason the 'B' Films were successful is because if an independent movie theater wanted to show a company's 'A' movie, the production company demanded that their 'B' movies get shown as well.
http://en.wikipedia.org/wiki/File:BigTrail.jpg
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