The proliferation of storefront theaters created a revolution in film exhibition and provided the foundation for an entertainment industry based on motion pictures.
The American public was introduced to the wonders of moving pictures through peep-show machines installed in penny arcades. The kinetoscope, developed by inventor Thomas Alva Edison, was introduced around 1893 and soon became commonplace in large cities. The invention of the film projector at the end of the 1890’s sent technology in a different direction and disrupted Edison’s plans to keep motion-picture exhibition within the framework of individual machines for public places or the home. The projector enabled businesses to entertain larger groups of people at the same time. Operators of penny arcades and music halls adopted film projectors, as did traveling shows.
In June, 1905, businessmen Harry Davis and John P. Harris opened a storefront theater in Pittsburgh, Pennsylvania, to show projected motion pictures. Their “store show” had about two hundred seats. The admission price was five cents, leading to the name “nickelodeon.” This was not the first time that motion pictures had been shown to groups of people in one place, but the theater concentrated on film exclusively, rather than mixing it with other forms of entertainment. Davis and Harris offered continuous exhibition of films and frequent changes of programs, directing their services to the working classes.
Under the management of Harry Cohen, the Davis and Harris nickelodeon achieved astounding success. The shows started at 8:00
Nickelodeons first became established in cities of the Midwest, where there were plenty of well-paid blue-collar workers, and spread to other cities in the Northeast and West. After two years of “nickel madness,” most American cities had at least one film theater, and big cities typically had twenty or thirty. By 1910, more than nine thousand film theaters were operating in the United States. This number grew to almost thirteen thousand in 1912, with about thirty million tickets sold each week. The nickelodeon had created a large business in film exhibition.
The nickelodeon also created the moviegoer, a customer for motion pictures who did not view them in other venues such as vaudeville shows or amusement parks. Moviegoers were devoted to the motion picture and expected a constant flow of new films at the nickelodeon. They soon became more experienced and consequently more critical in their viewing of films. Expectations for narrative plots, professional acting, and convincing settings increased. Film producers had to make longer films with strong story lines to keep the customers of the nickelodeons happy.
With motion pictures now a form of mass entertainment, filmmakers had to increase production to meet the new levels of demand created by the success of the nickelodeon. They began to build larger studios and organize production facilities to maintain a constant output of films. Studios were custom-built so that filmmakers could film more than one scene at a time and to bring all the elements of film production under one roof. The system of production in which the cameraman did all the nonacting work was replaced by a division of labor that established the director in overall charge of making the film, with camera work, lighting, and other tasks carried out by specialized workers.
Edison’s invention of the motion-picture camera gave him a strong patent position, which his company exploited to drive competition from the field. This policy was part of a common strategy in American business, that of achieving a monopoly based on control of patents. During the 1890’s, Edison’s lawyers had attempted to eliminate smaller film producers, but they met with limited success. Companies such as Biograph and American Vitagraph obtained their own patents and fought back. Extensive litigation in the 1890’s brought constant disruptions to film production and discouraged entrepreneurs from entering the field or investing in it. Film production was dominated by a few large companies with strong patent positions, such as the Edison and Biograph organizations, and numerous small companies that operated outside the law. Their inability to meet the demand for films encouraged foreign film producers to enter the American market.
With motion pictures now a large and profitable business, Edison set out to organize manufacturers around his patents. An agreement was reached in 1907 to offer manufacturing licenses to the largest film producers: Biograph, Vitagraph, Lubin, Selig, Pathé, Méliès, and Kalem. Biograph refused the offer and did not become part of the Association of Edison Licensees.
The MPPC organized film producers under the pooled patents of Edison, Biograph, and Vitagraph. It gave licenses to nine producers: the original members of the Association of Edison Licensees (minus Méliès), Biograph, the Kleine Optical Company, and the Edison concern. Interlocking agreements were made with Eastman Kodak (the main supplier of film stock), projector manufacturers, film importers, and film exchanges and exhibitors. The film trust,
The MPPC also took the lead in self-regulation of the industry to ensure that motion pictures would provide respectable entertainment. This was intended to head off growing criticism of the low moral tone of films. The MPPC also took the responsibility of policing the nickelodeons to reduce fire and safety hazards in the buildings.
The formation of the MPPC opened a period of rapid growth and high profits in the film industry. Film producers established a schedule of regular releases to ensure that exhibitors would be able to change programs regularly.
Like the phonograph before it, the motion-picture projector created a large entertainment industry within twenty years of its invention. The explosive growth of nickelodeon theaters signaled to the business community that there was a great opportunity in film exhibition. The success of the nickelodeon idea brought many entrepreneurs into the business. Until 1905, most attention in the fledgling film industry had been focused on the process of filmmaking. Many of the people who would later figure prominently in the history of motion pictures got their start in film exhibition. Adolph Zukor, a successful Chicago furrier, invested three thousand dollars in a penny arcade in New York in 1903 and took advantage of the “nickel madness” to turn it into a nickelodeon in 1906. In that same year, Carl Laemmle opened his store theater in Chicago and William Fox acquired a storefront arcade in Brooklyn with a nickelodeon over it for about one thousand dollars. All of these three men went on to create powerful film studios: Universal (Laemmle), Paramount (Zukor), and Twentieth Century-Fox.
The nickelodeon brought immediate profits to film exhibitors and many changes to the business. The increased demand for films supported film exchanges, which rented reels of film to exhibitors. This replaced the expensive practice of buying films and made it possible for nickelodeon operators to offer greater selections of films. In many cases, the exchanges were established by entrepreneurs who already owned nickelodeons, such as Carl Laemmle and William Fox, who started exchanges to serve their strings of theaters.
At the same time film producers were banding together, exhibitors and film exchanges were also organizing themselves into trade groups to protect their interests. They wanted to eliminate price cutting and stop the practice of “duping,” or unauthorized copying, of films. The renters of films organized themselves into the Film Service Association
The process of consolidation among both producers and exhibitors had the immediate effect of eliminating smaller, unaligned concerns from the business. The number of companies making or renting films decreased, and those that remained in business grew larger. Although the nickelodeons received better prints under the new system, their costs were higher, and many increased the admission charge to ten cents.
The formation of the MPPC accelerated consolidation and gave film producers more power over exhibitors. Each group obtained a license from the MPPC to use film cameras or projectors. The MPPC held all the important patents for film projectors, and under the new system the exhibitors had to pay a royalty fee of two dollars each week. This caused dissension and led to the first defections from the MPPC. Carl Laemmle announced his withdrawal from the organization in 1909. He was followed by several other film exchanges, which began buying films from independent producers. The MPPC issued injunctions against patent infringers but was powerless to prevent all of them from operating, especially those that left the New York City area—the center of the film industry—and moved to Southern California.
The independent film exchanges provided more business to the independent film producers, but uncertain supply and low quality of films pushed exhibitors and renters into making their own films. Carl Laemmle was again a pioneer in 1909, this time in the backward integration of film exhibitors into film production. He was followed by Zukor, who launched the Famous Players Film Company in 1911.
It was clear to exhibitors and renters that the film producers had both the means and the ambition to move into their business. The MPPC-licensed film producers in 1910 created their own film exchange, the General Film Company,
The monopolistic practices of the General Film Company and its parent, the MPPC, were well documented and resulted in the U.S. government bringing an antitrust suit against them in 1912. In 1915, the courts found the General Film Company guilty of violations of antitrust laws. This was followed by an even more damaging defeat in 1917, when the U.S. Supreme Court held that the MPPC could not enforce the use of licensed film on patented projectors in theaters. This was clearly the end of the film trust, but it did not end the conflict between producers and exhibitors. One important consequence of the failed attempt to create a monopoly in the film industry was the policy of integration, in which one organization was set up to manufacture, distribute, and exhibit films. Many of the powerful film studios that dominated Hollywood in the first half of the twentieth century traced their origins to the nickelodeon.
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Balio, Tino, ed. The American Film Industry. Rev. ed. Madison: University of Wisconsin Press, 1985. Collection of scholarly articles about the film industry written by experts in the field. Contains sections on nickelodeons and the Motion Picture Patents Company. -
Bowser, Eileen. The Transformation of Cinema: 1907-1915. Reprint. Berkeley: University of California Press, 1994. Covers the history of the film business from the nickelodeon era to the construction of the first “picture palaces,” large and ornate film theaters. Describes the emergence of the studio and star systems. -
Melnick, Ross, and Andreas Fuchs. Cinema Treasures: A New Look at Classic Movie Theaters. Osceola, Wis.: Motorbooks International, 2004. Lavishly illustrated history of the American movie theater, from the nickelodeon through the megaplex. -
Musser, Charles. Before the Nickelodeon: Edwin S. Porter and the Edison Manufacturing Company. Berkeley: University of California Press, 1991. Exhaustively researched, definitive account of the early years of the film industry. Covers filmmaking and exhibition up to 1915. Provides a wealth of information and excellent analysis of the content of films and the responses of audiences. Profusely illustrated. -
_______. The Emergence of Cinema: The American Screen to 1907. Reprint. Berkeley: University of California Press, 1994. A detailed and thoroughly researched account of the formation of the film industry by a leading authority on early American film. -
Ramsaye, Terry. A Million and One Nights. 1926. Reprint. New York: Simon & Schuster, 1986. An entertaining account of the film industry. The author worked from firsthand accounts and primary sources, and the book was approved by Thomas Edison. Captures the essence of the early days of film production and exhibition, although somewhat biased in Edison’s favor. -
Sklar, Robert. Movie-Made America: A Cultural History of American Movies. Rev. ed. New York: Vintage Books, 1994. A concise and perceptive general history of the motion-picture business that places it within the context of culture and entertainment. An excellent short overview of the American film industry by one of its most respected scholars.
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