Before I go into the history of the novelization (and its cousin, the comic adaptation), let me give a couple of recommendations of a few that are better than the movie itself or are just worth reading: Peter David’s novelization of Return of Swamp Thing turned a just-okay so-so movie I forgot the instant I left the theater into something very beautiful, poignant, charming and wonderful. It was all little tweaks, tiny little nudges that made individual moments that fell flat turn into something that worked. It’s amazing how few changes he made to make this story the best possible version of itself, though there were some things the novelization had that made it brilliant and surreal and even experimental, like for instance, Peter David made Alan Moore, Swamp Thing writer, an actual character in the story itself, a clerk at a motel who makes creepy and cryptic foreshadowing comments all through the story.

The novelization of the “meh” Jaws rip-off Orca by Arthur Herzog is a great book because it a tight thriller that gets us right into the head of the orca whale who wants to kill the whaler who murdered his family. Scenes that were maudlin are very moving in prose, with a whale mourning her dead baby and mate, and the hunter is even more tragic when we get into his head and see his remorse. It was like the whale started to represent his guilt. By contrast, the only part of the movie I remember is when the killer whale sets fire to an entire town. 

The novelization of the Flash Gordon movie is extraordinary because it contains explicit sex scenes. The talk is that it was based on an extremely horny early script for the film where it was a European scifi sexploitation romp like Barbarella or Lexx. Hahahaha, can you just imagine being some eleven year old who bought Flash Gordon because he liked the cool space movie only to find a chapter with a blowjob scene in a seraglio?

The whole idea behind Buckaroo Banzai: Across the Eighth Dimension is that it’s actually part 7 of a long running movie series that doesn’t exist, so there are lots of “hey, look, it’s him!” cameos to people we never saw before and tons of lore that just sat in the background. Buckaroo Banzai is a test I use to see if someone’s sense of humor is compatible with mine. So it stands to reason that the novelization, which is more information rich, is a delight for fans of the series. It’s like the only expanded universe product for something that never got an expanded universe. It has details like the fact that Pecos (briefly mentioned as being in Tibet in the film) is actually one of the few Hong Kong Cavaliers to be a woman, and she was in Tibet searching for Buckaroo’s archenemy Hanoi Xan. 

While I wouldn’t say that the novelization of Star Trek: the Motion Picture is better than the movie, exactly, it was written by Gene Roddenberry himself, and had one especially weird fourth wall breaking passage that seemed to be a shout out to the slash-writers, where Captain Kirk says “hey, I don’t know where this idea comes from, but I am super-straight, you guys, seriously. I am only attracted to women.” The novelization also was interesting in that we learned a bit more about Lieutenant Ilea’s empathic powers, which are fundamentally non-visual and we only got a vague sense of in the film. She received emotional signals very much like Deanna Troi later would, and she was not only a receiving empath but a projecting one: we learned that Mr. Sulu, from a less sexually evolved race than Deltans, couldn’t stop picture her naked. 

Finally, getting back to Peter David again, who is like the Phillip K. Dick or Michelangelo of this medium, his novelization of Spider-Man 3 is better than the movie. Moments that fail in the book work there. 

As for the history of the novelization, you have to try to imagine a world where you can’t see a movie whenever you want to. You can only see it when it’s in theaters for a few weeks or when it comes on TV years later. Therefore, novelizations and comic adaptations are designed to replicate the experience of going to the theater. In that sense, they’re almost a relic, technologically speaking, of a time before video and on demand. Fun fact: in the late 1970s, Marvel Comics had a ton of cash problems, and the only thing keeping the lights on was the money made by movie adaptations of things like Logan’s Run.  

Novelizations are extremely old: they go back to the 1920s, and one interesting example is the 1925 Tod Browning film London After Midnight, a horror film that no copies of exist at all and is a “lost film,” but because of the novelization (and a ton of still images during production), we nonetheless know what the plot of the movie is pretty well, to the point that the London After Midnight vampire is almost as iconic as other monsters, despite the fact no one has seen the actual film in decades.

To directly answer your question, the first big book novelization was actually for King Kong in 1933 by Delos Lovelace, which came out the year the movie did. The public went mad for King Kong and the book sold in the millions. It cemented the idea that the novelization is a pretty standard tie-in for a film release, and it’s the most important tie in novel ever written.