Good question!
I’ll explain the whole itinerary…

PRIME movie theaters, (the big, well-kept ones with high-profile location$$$) get first dibs on first-run block busters: Harry Potter, Star Wars etc. These types of theaters are members of powerful theater syndicates that organize their resources to negotiate for the big money-making films.

Most people do not know this but, ALL ( yes 100%) of the box office proceeds during the first two or three weeks go to the producers or film company that produced the film. Once you know that, you can understand the rest of these associated phenomenon easily.

That’s why, Billboard, Variety, and other news sources focus so much on the “box office take” during the crucial first few weeks of release. It is this period of time which tells investors if the film is “boffo” or “bust.” ( Boffo is industry lingo for Great. The etymology isn’t perfectly clear, but most of us believe it comes from “Big F’n Box office”.

That’s the real reason why movie theaters charge so much for their concessions. Movie theaters have to
1) pay for the “first release rights” to show the new blockbusters
2) give ALL of the box-office take ( in these first few weeks ) to the film’s makers

The theater doesn’t make a dime from the movie until AFTER the big fish feed.

In the second or third week, THEN the theater gets some of the remaining box office.

That’s why you see “booster campaigns” two weeks after the blockbuster’s release.

During that time, the physical film ( the celluloid in a can) stays in the theater under lock and key. Some modern mega movie theaters have high tech vaults with special timed-clocks and all sorts of security protocols. They do not always have to pay for this security, although they usually do. Media giants like Time-Warner, MGM, etc, actually demand this security by contract. The big boys protect their interests!

After the “first run” the small fish get a taste. The film in the can stays at the theater under lock and key, but is still shown at that theater for the remaining few weeks, depending on the “residual box office”.

But just as you have to return your rented videos to the store, they have to return the films to the producers / movie studios. (In actuality, movie studios arrange shipment of the films to the “B houses” or secondary market theaters. These are the cheap theaters that you spoke of.) These secondary theaters are a market unto themselves and have an entirely different business model they operate from. They too must make most of their money from concessions, but because they are in lower-cost locations, they don’t have to charge as much, either for the tickets or the popcorn.

The physical film is usually NEVER destroyed! After the secondary markets get their take, the films are sent back to the Studios. That is why the movie GIANTS have VAST warehouses (unused soundstages) FULL of old celluloid in cans.

That’s also why we sometimes hear of crimes; like when Warner execs decided to destroy the old Bugs Bunny cartoons.

Because of political pressure from special interest groups, and because of idiotic marketing and management, these misguided execs decided to make room in their soundstages for more profitable use.

They literally dipped that precious old ART on celluloid into vats of acetone… ( nail polish remover) then burned the film!

That criminal stupidity sent such shock waves through the industry that Roger Rabbit was born! The blockbuster “power broker” producers decided to send the big movie moguls a message, “Don’t fork with our ART!”

Not only did Roger Rabbit chronicle the actual “dip” that these morons used, the Roger Rabbit movie proved they could make big “box office” out of political issues; in this case, that issue was the criminal conspiracy to destroy public transportation by General Motors.

It doesn’t matter what you think or know about that gigantic criminal conspiracy. It is a historical fact. What IS important: These producers proved they had the BALLS to take on giant corporations like GM, MGM, WARNER and could expose criminal wrongdoings through burlesque. Not only that, they could make it entertaining so throngs of people would watch, …and make a profit doing it too!

Roger Rabbit sent a thinly veiled message to the corporate puppet masters. The essence of the message is this;

“We, the producers who make the films that are YOUR livelihood, KNOW that you are controlled by gigantic corporate special interests. We make profitable movies, that MILLIONS of Americans and BILLIONS of international viewers will enjoy and talk about. We can make those movies about fun, funny fluff, action, entertainment, you name it. But… we can also make them about any political CRIME that you are in collusion with. If you do not want your culpability shown, or if your corporate puppet masters push us too far, we will blow the lid off your conspiracies, one by one… and we will make a buck while we do it!”

That cooled the corporate jets quickly. A precarious peace accord was held between the big-box-office producers and the movie studio magnates who are all puppets for their corporate masters.
Most big movies that have thousands of copies made, also have a safe resting place as part of their negotiated contract. These films rest in sealed cans, in climate controlled warehouses, with good roofs that are well maintained, in areas that are outside of flood zones.

Here is another interesting factoid; The American government knows where most of these films are warehoused and has them pinpointed in Military GPS targeting systems.

Makes you wonder huh….?