Film Exchanges in America’s Early Movie Industry
Motion pictures were exhibited to the public in the late 1800s, though the first device to accomplish this would seem very unfamiliar to today’s movie-going audiences. Thomas Edison’s 1893 Kinetoscope was little more than a wooden box with a small glass window. Intended only for individual viewing, it housed a roll of film, a mechanical device to circulate the film, and a small light to illuminate it. A person would peer through the window and watch a short moving sequence, usually just a depiction of an everyday
event or the performance of an acrobat or dancer. Needless to say, the medium’s ability to serve only one customer at a time severely limited its profitability.
Everything changed two years later with the advent of projection, by which a much larger film image could be shown to multiple viewers simultaneously. The Lumiere brothers of France were the first to introduce this new technology with a projection machine called a cinematograph. Edison was quick to follow their lead and created his Vitascope projector in late 1895. With the potential to make money by charging admission to movies now within reach, the innovators of the film industry were ready to expand their business ventures.
There were two industry models in practice during the early 1900s. A handful of successful firms, such as the Biograph Company, owned the equipment to make their own films as well as the venues in which to display them. Such companies were rare, however; most films were shown by independent exhibitors. These included traditional theater owners, who added short film presentations to their programs of live-action entertainment, and traveling cinema exhibitors, who moved from town to town to reach new audiences, often following
circuits
established by rural fairs. They typically purchased films directly from the production companies that made them, paying a set price per foot of film regardless of its content. Because movies of the time were never longer than one or two minutes, it was feasible to buy them outright.
However, this system failed to attract significant audiences as the public soon tired of the small stock of films exhibitors had to offer, and the reels of film themselves deteriorated quickly through repeated transport and screening in traveling cinema shows.
Things changed again when producers began increasing the length of their films in order to tell more complex stories. Longer films entailed higher prices, and it became difficult for small-scale exhibitors to purchase them. This, in turn, prevented production studios from creating as many movies as they could, since they had no one to sell them to. It was precisely this dilemma that gave rise to the film exchange. An early version of a motion-picture distributor, film exchanges were responsible for bridging the gap between production and exhibition. They financed production studios, giving them the funds they needed to film more movies. Then, they purchased these films and rented them out to exhibitors around the country for a fraction of what it would have cost the exhibitors to purchase the films themselves.
The film-exchange system revolutionized the industry, greatly benefiting all parties involved.
Film rentals allowed exhibitors to show a wide variety of movies and gave them constant access to new films so they could change their programs frequently.
This led to the rise of what we now know as the movie theater, a venue dedicated solely to the public exhibition of films.
Film exchanges made money by taking a percentage of ticket sales, and the production studios were paid by the exchanges.
Moreover, as a result of the increase in revenue that came as movies gained popularity, the studios began to focus on elevating the quality of their products.
Many historians view the development of film exchanges as the single most important factor in the transformation of the film industry from an entertainment novelty to a major business. After 1920, independent exchanges grew scarcer as a few corporations succeeded in capturing control of the production, distribution, and exhibition of films. Yet many of the practices established by film exchanges prior to the 1920s are still used today by the most successful Hollywood distributors.
What can be inferred from paragraph 4 about film exchanges
A. They charged high rental prices for the films they owned.
B. They possessed large amounts of startup capital.
C. They participated in both production and exhibition.
D. They broadened the market for films overseas.
