"Really? Worst film you ever saw? Well, my next one will be better."
- Ed Wood (Tim Burton, 1994)

They say necessity is the mother of invention. So in a capitalist economy when times are hard you have to do whatever you can for your bottom line. You must keep bums on seats. Well, as the Great Depression swept across America in the 1930's movie theatres were feeling the pinch and trying desperately to save money and stay afloat.

The Golden Age of Hollywood had kicked off well in the 20s with films like The Jazz Singer (1927). But even then there had been a two-tiered system of film budgeting. Movies made on a cheaper budget allowed the studios more efficiency in terms of resources, sets and staff. So they could put more money into, and yield maximum returns from, their bigger budget main productions.

By the 30s in the USA, live music in movie theatres and vaudeville-esque variety shows were diminishing. This was largely due to the hugely popular arrival of film with sound. Most of the big studios owned their own theatres and implemented a new format. A typical movie bill in a theatre by the mid-30s might be comprised of a short film, a cartoon, a news reel, film previews and then a double feature.

The main event of the double feature became known as the A, and the second on the bill the B (usually under 80 minutes long). This also meant that studios could rent films together, or charge a flat fee for the Bs. Obviously, when the B feature was sufficiently low-budget, they made more profit. In Depression-era America audiences started to prefer cheaper 'two for one' value tickets, so eventually simple double bills began to prevail.

The B was usually made with existing sets, low paid actors and re-used stock footage. They were often formulaic and easily genre-identified (western, comedy, gangster etc). The A had the big names, talented writers, Technicolor and expensive production values. While the natural home of the B-movie was low end theatre houses with time-rich money-poor audiences. Sometimes these 'grind houses' of the 30s and 40s would even just offer a deal by showing a clutch of B-movies at a cut price.

At this stage, the major studios were churning out B-movies, which had become important to their survival. The 'Big Five' were Warner Bros, Paramount, 20th Century Fox, MGM and RKO. The 'Little Three' were Universal, Columbia and United Artists, so called as these three lacked the integrated strength of owning their own theatres.

For these studios, the B-movie was often a lifeline. They kept cash flow moving, distribution channels open, staff working, enabled the re-use of sets and props, and, basically, kept those bums on seats. There were also a range of studios specialising in low-budget movies only. These became known in Hollywood as Poverty Row, and included Republic, Monogram and Tiffany Pictures. The average price of an A film in the mid-40s was almost half a million dollars, whereas most RKO and Republic movies were made for under $200,000.

Yet, sometimes a B ended up more popular than the A. And every now and then Bs acted as launch pads for talent ascending the Hollywood career ladder. John Wayne appeared in many B-westerns before making it big, for example. And film noir was a style initially associated with B-movies, as directors were free of the commercial constraints often associated with big budgets and so could be more creative. This became a reputable genre in itself and filmmakers like Fritz Lang and Michael Curtiz emerged as luminaries.

Over the course of this week, we're thus going to be looking at the B movies through different eras. Join us tomorrow for part two, where we focus on the 40s and 50s.

• Top 11 classic so-bad-they're-good B-movies