early as 1909.
However, Los Angeles did not become the centre of the American industry until the First
World War.
Around 1903, the rise of film exchanges led to a crucial change in distribution practices,
which in turn created a radical change in modes of exhibition. The rise of permanent
venues, the nickelodeons that began to appear in numbers in 1906, made the film industry
a much more profitable business, encouraging others to join Edison, Biograph, and
Vitagraph as producers. Until this time the companies had sold rather than rented their
product to exhibitors. While this worked well for the travelling showmen who changed
their audiences from show to show, it acted against the establishment of permanent
exhibition sites. Dependent upon attracting repeat customers from the same
neighbourhood, permanent sites needed frequent changes of programme, and so long as
this involved having to purchase a large number of films it was prohibitively expensive.
The film exchanges solved this problem by buying the films from the manufacturers and
renting them to exhibitors, making permanent exhibition venues feasible and increasing
the medium's popularity. Improvements in projectors also facilitated the rise of permanent
venues, since exhibitors no longer had to rely on the production companies to supply
operators.
By 1908 the new medium was flourishing as never before, with the nickelodeons -- so
called because of their initial admission price of 5 cents -- springing up on every street
corner, and their urban patrons consumed by the 'nickel madness'. But the film industry
itself was in disarray. Neighbouring nickelodeons competed to rent the same films, or
actually rented the same films and competed for the same audience, while unscrupulous
exchanges were likely to supply exhibitors with films that had been in release so long that
rain-like scratches obscured the images. The exchanges and exhibitors now threatened to
wrest economic control of the industry from the producers. In addition civil authorities
and private reform groups, alarmed by the rapid growth of the new medium and its
perceived associations with workers and immigrants, began calling for film censorship
and regulation of the nickelodeons.
In late 1908, led by the Edison and Biograph companies, the producers attempted to
stabilize the industry and protect their own interests by forming the Motion Picture
Patents Company, or, as it was popularly known, the Trust. The Trust incorporated the
most important American producers and foreign firms distributing in the United States,
and was intended to exert oligopolistic control over the industry: Along with Edison and
Biograph, members included Vitagraph, the largest of American producers, Selig,
Essanay, Mélièlis, Pathé and Kleine, the Connecticutbased Kalem, and the Philadelphia-
based Lubin. The MPPC derived its powers from pooling patents on film stock, cameras,
and projectors, most of these owned by the Edison and Biograph companies. These two
had been engaged in lengthy legal disputes since Biograph was founded, but their
resolution now enabled them to claim the lion's share of the Trust's profits despite the fact
that they were at the time the two least prolific of the American production studios.
The members of the MPPC agreed to a standard price per foot for their films and
regularized the release of new films, each studio issuing from one to three reels a week on
a pre-established schedule. The MPPC did not attempt to exert its mastery through
outright ownership of distribution facilities and exhibition venues, but rather relied upon
exchanges' and exhibitors' needs for MPPC films and equipment that could only be
obtained by purchasing a licence. The licensed film exchanges had to lease films rather
than buy them outright, promising to return them after a certain period. Only licensed
exhibitors, supposedly vetted by the MPPC to ensure certain safety and