This is the 1900s, pre-Hollywood era. The studios are still based mainly in New York but will move to Los Angeles not long after.
The Nickelodeon Boom
The main trend in the American film industry from 1905 to 1907 was the rapid multiplication of film theaters. These were typically small stores, installed with fewer than two hundred seats. Admission was usually a nickel (hence the term nickelodeon) or a dime for a program running fifteen to sixty minutes. Moviegoing had become less a novelty and more a regular entertainment. Film producers took to renting rather than selling films. Since exhibitors no longer had to keep running the same films until they made back their purchase price, they could change their programs two, three, even seven times a week.
The Cascade Theater in Newcastle, Pennsylvania, was the first nickelodeon acquired by Jack, Albert, Sam, and Harry Warner. A sign promised:
«Refined Entertainment for Ladies, Gentlemen, and Children.»
The Warners went on to careers in exhibition and production, eventually establishing Warner Bros. Carl Laemmle, later the founder of Universal, opened his first nickelodeon in Chicago in 1906. Louis B. Mayer, later of MGM (Metro-Goldwyn Mayer), ran a small theater in Haverhill, Massachusetts. Other studio executives who started out running nickelodeons included Adolph Zukor (later head of Paramount), William Fox (who formed the company that became 20th Century-Fox), and Marcus Loew (whose Loew’s was the parent company of MGM). These men would help create the basic structure of the Hollywood studio system during the 1910s.
Motion Picture Patents Corporation
Or how Thomas Edison was a dick about the film business
90% of the newspapers, magazines, TV stations, movie studios and online news sources we drink in are run by six massive corporations: Comcast, Newscorp, Disney, Viacom, Time-Warner and CBS. Is this a shocking warning signal of the deterioration of our Information Age? Or is it history repeating itself?
Back in the 1910s, the more established leaders of the industry consolidated power among themselves and tried to exclude newcomers. They realized that control of the burgeoning film industry would be highly profitable.
Since 1897, the Edison company had tried to force its competitors out of business by suing them for patent infringement. After a court decision, some competitors agreed to pay Edison a fee to be able to go on producing (Association of Edison Licensees), but American Mutoscope & Biograph (AM&B) refused to because their camera had a different mechanism and was not subject to Edison’s patents and dealt with years of suing and litigations collecting money mainly from importers (Biograph Association of Licensees).
There was Essanay Studios, the first major outfit to lure Charlie Chaplin away from his Mack Sennett roots with a thick, yummy contract. Kalem Studios, the first to try to make Ben Hur into a movie. Selig Studios, which launched the careers of Tom Mix and Harold Lloyd before gradually becoming a zoo (literally). Lubin, based out of Philadelphia. Vitagraph, which was later bought out by Warner Brothers and used to move Looney Tunes cartoons. And American Pathé, the US wing of France’s (and really Europe’s) biggest studio.
That was it, that was the Motion Picture Patents Company – six studios teaming up with Edison and setting up a system that would keep everyone else out of the business.
But as the market approached chaos and less films were produced due to spending time in legal issues, Edison and AM&B decided to unite licensing forces and created in 1907-1908 the Motion Picture Patents Corporation (MPPC, also known as the Edison Trust). They also tried to limit importations and while Mélies, Pathé and Gaumont were ok, Italian films and Nordisk were banned.
The MPPC hoped to control all three phases of the industry: production, distribution, and exhibition. Only licensed companies could make films. Only licensed distribution firms could release them. And all theaters wanting films made by members of the MPPC had to pay a weekly fee for the privilege. Eastman Kodak agreed to sell film stock only to members of the MPPC, and in return they would buy no stock except from Kodak.
But one third of theaters refused to pay the fee, serving a market for independent producers and distributors. In 1909, Carl Laemmle turned in his license and created the Independent Motion Picture Company (IMP), a small firm that would later form the basis of Universal Studios. These independent companies claimed to use cameras with different mechanisms, and thus the MPPC hired detectives to gain evidence that producers were using cameras with the Latham loop and other devices patented by the MPPC. But the second severe blow to the MPPC came when court ruled that the technique of the Latham film loop had been anticipated in earlier patents, so now everybody could use any kind of camera freely. Also in 1915, the American government ruled against the MPPC as a trust (a group of companies acting in unfair constraint of trade)… so there you go Edison, nice try.
Independent film companies had already been forming another oligopoly themselves, the new oligopoly that would become the Hollywood film industry. These were the plucky, fresh-faced independents who beat out Edison and the MPPC, and because of whom today we face a different oligopoly of media; not because of patent-related dickheadery, but because of an increasingly corporate culture, one that does not appear poised to change gears anytime soon. So… yeah.
1910: The Move to Hollywood
By 1910 productions began to move from New York, New Jersey, Chicago and Philadelphia to Florida and, especially, Los Angeles. The reasons were:
- Weather: Its clear, dry weather permitted filming outdoors most days of the year.
- Diversity of Locations: Southern California offered a variety of landscapes, including ocean, desert, mountain, forest, and hillside. Also, Westerns emerged as one of the most popular American genres and such films looked more authentic when filmed in the real West rather than in New Jersey.
- Escaping the Patent Wars in New York
- Assembly line of production: Europe was devastated by war and could never catch up to Hollywood’s mass production industrial system were everything was controlled (production, distribution and exhibition).
Not only was Southern California the best guarantee of sunshine in the country, along with a bountiful variety of natural topography for different movie genres, but it was an entire nation away from Edison and the other MPPC companies, which were all located in the northeast. As an added bonus, the Ninth Circuit Court of Appeals, based in San Francisco, was not known for enforcing patent law.
1920s: The Roaring Twenties
In contrast to this fiscal conservatism, society seemed to lose much of its restraint during the Roaring Twenties. The passage of the Volstead Act (1919), outlawing all forms of alcoholic beverages, led to the excesses of the age of Prohibition. Bootleg liquor was readily available, and outing the law by visiting speakeasies or attending wild drinking parties became common even among the upper classes. The film industry benefited from the high level of capital available during this period, and its films reflected the fast pace of life in the Jazz Age and the arrival of sound to movies.
The most obvious indication of the growth of the film industry was its increasing vertical integration. The biggest firms jockeyed for power by combining production and distribution with expanding chains of theaters. This three-tiered vertical integration guaranteed that a company’s films would find distribution and exhibition. The bigger the theater chain owned by the firm, the wider its films’ exposure would be. In dealing with the theaters they did not own, they employed block booking, which meant that any exhibitor who wanted certain films with high box-office potential had to rent other, less desirable films from the same company.
Vertical integration was an important factor that contributed to Hollywood’s international power. During this same period, Germany was just beginning to develop a vertically integrated film industry. France’s leading firm, Pathé, was backing away from vertical integration by moving out of production. No other country developed a studio system as strong as that of the United States.
Big Three and Little Five
The vertically integrated firms that controlled big theater chains and constituted the Big Three at the top of the American film industry were:
- Loew’s MGM, and
- First National.
Trailing behind them, but still important, were the Little Five, firms that owned few or no theaters:
- the Producers Distributing Corporation,
- the Film Booking Office, and
- Warner Bros.
Assembly line production style
The studios developed methods of making films as efficiently as possible. By 1914, most big firms had differentiated between the director, who was responsible for shooting the film, and the producer, who oversaw the entire production. A series of films could be made simultaneously on sets built side by side. The labor of filmmaking was increasingly divided among expert practitioners. The continuity script also allowed people working on the film to coordinate their efforts, even though they might never communicate directly with each other. Again, no other country could match Hollywood’s approach. Few firms employed so many different film specialists, and only a small number of studios outside the United States could boast of facilities as extensive as those of big companies like Paramount.