He acquired the patents to a projector whose key mechanism had been designed by Thomas Armat and C. Francis Jenkins, who had lacked the capital for the commercial exploitation of their invention. The Vitascope, which projected an image on to a screen, was advertised under Edison's name and premiered in New York City in April of 1896. Six films were shown, five produced by the Edison Company and one, Rough Sea at Dover, by the Englishman R. W. Paul. These brief films, 40 feet in length and lasting twenty seconds, were spliced end to end to form a loop, enabling each film to be repeated up to half a dozen times. The sheer novelty of moving pictures, rather than their content or a story, was the attraction for the first film audiences. Within a year there were several hundred Vitascopes giving shows in various locations throughout the United States." 
"After the first New York presentation of Edison's Vitascope in April 1896, film venues spread rapidly across the country. The Vitascope was not for sale, but individual entrepreneurs bought the rights to exploit it in different states. During 1896 and 1897, however, many small companies marketed their own projectors, all designed to show 35 mm prints. Since movies were not yet copyrighted and prints were sold rather than rented, it was difficult to control the circulation of films. Edison's pictures were often duplicated and sold, while Edison profited by duping films imported from France and England. Firms also frequently made direct imitations of each other's movies.
Soon hundreds of projectors were in use, and films were shown at vaudeville houses, amusement parks, small storefront theaters, summer resorts, fairs, even churches and opera houses. The years from 1895 to 1897 were the novelty period of the cinema, because the primary appeal was simply the astonishment of seeing movement and unusual sights reproduced on the screen. By early 1898, however, films' novelty had worn off. As attendance declined, many exhibitors went out of business. One event that helped revive the industry was the Spanish-American War of 1898. Patriotic fervor made audiences eager to see anything relating to the conflict, and companies in the United States and abroad profited by making both authentic and staged films.
Another type of film that helped revive the industry was the Passion Play. Beginning in 1897, filmmakers made series of single-shot scenes from Jesus' life-views that resembled illustrations in Bibles or magic-lantern slides. One such series of shots was released in February 1898 as The Passion Play of Oberammergau. (The title lent the film respectability, though it in fact had no connection with the traditional German spectacle.) As with many of the more elaborate films of the day, the exhibitor had the option of buying some or all of the shots and combining them, along with lantern slides and other religious material, to make a lengthy program. Prizefight films were also popular, especially since they often could be shown in places where live bouts were prohibited.
From 1898, then, the American film industry enjoyed a certain stability, with most films being shown in vaudeville theaters. Production increased during this period to meet the high demand." 
"Following the premiere of the Vitascope in New York in April 1896, there was an instant and insatiable clamour nationwide for projected moving pictures. To satisfy demand, producers and exhibitors flagrantly ignored machine patents and exploited the absence of film-strip copyright. In 1897, armed with the patent on the Latham Loop, Edison began to fight back, systematically suing every company that used the loop in its cameras or projectors. Then, furious at the way Edison had taken the credit for the Vitascope and appropriated its mechanism for his own Projecting Kinetoscope, Thomas Armat also began issuing writs on the strength of the loop patent, including one against Edison himself. Eventually, in excess of two hundred legal actions came before the U.S. courts." 
"The American Mutoscope Company did particularly well during the late 1890s, partly because of its clear 70mm images, displayed by the company's own touring operators in vaudeville houses. By 1897, American Mutoscope was the most popular film company in America, and it attracted audiences abroad as well. American Mutoscope began filming in a new rooftop studio. The firm changed its name in 1899 to American Mutoscope and Biograph (AM&B), reflecting its double specialization in peepshow Mutoscope reels and projected films. Over the next several years, AM&B was hampered by a lawsuit brought against it by Edison, who consistently took competitors to court for infringing patents and copyrights. In 1902, however, AM&B won the suit, because its camera used rollers rather than sprocketed gears to move the film. The company's prosperity grew. In 1903 it began to make and sell films in 35mm rather than 70mm, a change that boosted sales. Beginning in 1908, it employed one of the most important silent-era directors, D. W. Griffith.
Another important company that got its start during the early years of the cinema was American Vitagraph, founded in 1897 by J. Stuart Blackton and Albert E. Smith as an advertising firm. Vitagraph began producing popular films relating to the Spanish-American War. Like other production companies of this period, Vitagraph was threatened with patent- and copyright-infringement lawsuits by Edison, who hoped to control the American market. Vitagraph survived by agreeing to cooperate with Edison, making films for the Edison firm and in turn dealing in Edison films itself. AM&B's 1902 legal triumph over Edison briefly reduced the risk of lawsuits throughout the industry by establishing that Edison's patents did not cover all types of motion-picture equipment. As a result, Vitagraph expanded production. Within a few years, it would emerge as an important firm making artistically innovative films." 
Edwin S. Porter, Edison's Mainstay
"The rise in production at AM&B and Vitagraph in the wake of Edison's failed lawsuit obliged Edison's company to make more films to counter their competition. One successful tactic was to make longer films shot in the studio. In this endeavor, it had the assistance of the most important American filmmaker of this early period, Edwin S. Porter.
Porter was a film projectionist and an expert at building photographic equipment. In late 1900, he went to work for Edison, whom he greatly admired. He was assigned to improve the firm's cameras and projectors. That year the Edison Company built a new glassenclosed rooftop studio on East 21st Street in New York City, where films could be shot using the typical painted stage-style scenery of the era. In early 1901, Porter began operating a camera there. At this point in cinema history, the cameraman was also the film's director, and soon Porter was responsible for many of the company's most popular films".  For the next few years, he served as director-cameraman for much of Edison’s output, starting with simple one-shot films (Kansas Saloon Smashers, 1901) and progressing rapidly to trick films (The Finish of Bridget McKeen, 1901) and short multiscene narratives based on political cartoons and contemporary events (Sampson-Schley Controversy, 1901; Execution of Czolgosz, with Panorama of Auburn Prison, 1901). Porter also filmed the extraordinary Pan-American Exposition by Night (1901), which used time-lapse photography to produce a circular panorama of the exposition’s electrical illumination, and the 10-scene Jack and the Beanstalk (1902), a narrative that simulates the sequencing of lantern slides to achieve a logical, if elliptical, spatial continuity.
It was probably Porter’s experience as a projectionist at the Eden Musée theatre in 1898 that ultimately led him in the early 1900s to the practice of continuity editing. The process of selecting one-shot films and arranging them into a 15-minute program for screen presentation was very much like that of constructing a single film out of a series of separate shots. Porter, by his own admission, was also influenced by other filmmakers - especially Méliès, whose Le Voyage dans la lune he came to know well in the process of duplicating it for illegal distribution by Edison in October 1902. Years later Porter claimed that the Méliès film had given him the notion of “telling a story in continuity form,” which resulted in The Life of an American Fireman (about 400 feet [122 metres], or six minutes, produced in late 1902 and released in January 1903). This film, which was also influenced by James Williamson’s Fire!, combined archival footage with staged scenes to create a nine-shot narrative of a dramatic rescue from a burning building. It was for years the subject of controversy because in a later version the last two scenes were intercut, or crosscut, into a 14-shot parallel sequence. It is now generally believed that in the earliest version of the film these scenes, which repeat the same rescue operation from an interior and exterior point of view, were shown in their entirety, one after the other. This repetition, or overlapping continuity, which owes much to magic lantern shows, clearly defines the spatial relationships between scenes but leaves temporal relationships underdeveloped and, to modern sensibilities, confused. Contemporary audiences, however, were conditioned by lantern slide projections and even comic strips; they understood a sequence of motion-picture shots to be a series of individual moving photographs, each of which was self-contained within its frame. Spatial relationships were clear in such earlier narrative forms because their only medium was space. Nevertheless, the technical innovations in the film are many: a close-up of the fire alarm being activated, the use of both medium and wide shots, the intercutting of actual footage with staged sequences, and the use of dissolves as transitions between scenes to suggest the passage of time.
Motion pictures, however, exist in time as well as space, and the major problem for early filmmakers was the establishment of temporal continuity from one shot to the next. Porter’s The Great Train Robbery (1903) is widely acknowledged to be the first narrative film to have achieved such continuity of action. Comprising 14 separate shots of noncontinuous, nonoverlapping action, the film contains an early example of parallel editing, two credible back, or rear, projections (the projection from the rear of previously filmed action or scenery onto a translucent screen to provide the background for new action filmed in front of the screen), two camera pans, and several shots composed diagonally and staged in depth - a major departure from the frontally composed, theatrical staging of Méliès. "The film used intercutting for suspense (a telegraph operator knocked out at the beginning of the film is revived by a young girl who discovers him by accident; will he be able to spread the alarm in time?); parallel editing (the robbery takes place as the telegraph operator is being revived, and the robbery concludes as the posse is being formed to pursue the bandits); and camera angles that view the action from a variety of vantage points, usually to the left or right of the actors, rather than placing the actors directly in front of the camera." 
The film’s popularity encouraged investors and led to the establishment of the first permanent film theatres, or nickelodeons, across the country. Running about 12 minutes, it also helped to boost standard film length toward one reel, or 1,000 feet (305 metres [about 16 minutes at the average silent speed]). Despite the film’s success, Porter continued to practice overlapping action in such conventional narratives as Uncle Tom’s Cabin (1903) and the social justice dramas The Ex-Convict (1904) and The Kleptomaniac (1905). He experimented with model animation in The Dream of a Rarebit Fiend (1906) and The Teddy Bears (1907) but lost interest in the creative aspects of filmmaking as the process became increasingly industrialized. He left Edison in 1909 to pursue a career as a producer and equipment manufacturer. Porter, like Méliès, could not adapt to the linear narrative modes and assembly-line production systems that were developing.
Birth of an American Industry
"Today, Hollywood dominates the international market in entertainment media, as it does in many other industries. Before World War I, however, the United States was not yet the world 's most economically important country. Great Britain still ruled the waves; its ships carried more goods than did those of any other country, and London was the globe's financial center. It was the war that allowed the United States to surpass England and other European countries.
Prior to the war, American film firms concentrated on the swiftly expanding domestic demand and paid less attention to foreign markets. U.S. companies were also still struggling among themselves for power in the new industry. Between 1905 and 1912, American producers, distributors, and exhibitors tried to bring some stability to the shifting and confused film business. Only then would they be able to turn greater attention to export." 
Nickels Count: The Nickleodeon Boom
"By 1905, films were showing in most of the available vaudeville houses, local theaters, and other venues. 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. Most nickelodeons had only one projector. During reel changes a singer might perform a current song, accompanied by lantern slides.
Nickelodeons spread for several reasons. When production companies turned away from actualities toward story films, moviegoing became less a novelty and more a regular enterta inment. Shorter workweeks left more time for entertainment. In addition, 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. As a result, some of their patrons returned regularly. Nickelodeons could run the same brief programs over and over continuously, from late morning to midnight. Many exhibitors made huge profits." 
"It is hard to recall today that many of the moguls who maintained such a tight grip on every aspect of American cinema had first entered the industry as small-time exhibitors hoping to cash in on what was still considered a disreputable novelty. However, men like Carl Laemmle (1867-1939), Adolph Zukor (1873-1976), William Fox (1879-1952), Jesse Lasky (1880-1958), Samuel Goldfish (later Goldwyn, 1882-1974), Marcus Loew (1870-1927) and Louis B. Mayer (1885-1957), mostly first-generation Jewish immigrants from Eastern Europe, had the acumen and courage to emerge victorious from the business wars of the 1910s." 
"Nickelodeons had advantages over earlier forms of exhibition. Unlike amusement parks, they were not seasonal. They were cheaper than vaudeville houses and more regularly available than traveling exhibitions. Expenses were low. Spectators typically sat on benches or in simple wooden seats. There were seldom newspaper advertisements to alert patrons in advance concerning programs. Patrons usually either attended on a regular basis or simply dropped in. The front of the theater displayed hand-painted signs with the names of the films, and there might be a phonograph or barker attracting the attention of passersby.
There was almost always some sound accompaniment. The exhibitor might lecture along with the film, but piano or phonograph accompaniment was probably more common. In some cases, actors stood behind the screen and spoke dialogue in synchronization with the action on the screen. More frequently, people used noisemakers to create appropriate sound effects.
In the days before 1905, when films had mainly been shown in vaudeville theaters or by touring lecturer exhibitors, admission prices were often twenty-five cents or more - too much for most blue-collar workers. Nickel theaters, however, opened films to a mass audience, many of them immigrants. Nickelodeons clustered in business districts and working-class neighborhoods in cities. Bluecollar workers could attend theaters near their homes, while secretaries and office boys caught a show during the lunch hour or before taking public transport home after work. Women and children made up a significant proportion of city audiences, stopping in for a break while shopping. In small towns, a nickelodeon might be the only place showing films, and people from all strata of society would watch movies together." 
The Motion Picture Patents War
"In the meantime, an exhibition revolution was taking place. Movies had been part of vaudeville bills or fairground attractions before the opening of the first permanent venue, Thomas L. Tally's Electric Palace in Los Angeles in 1902. The first 'store-front' theatre opened in 1905 and by 1910 there were some 10,000 of these 'nickelodeons' across the U.S., drawing up to 80 million patrons each week. Previously, exhibitors had bought strips outright at so much per foot depending on the production costs and the fdm's box-office potential. However, audiences were now demanding regular changes of programme and to facilitate such rapid turnover, a new player entered the industry. The distributor bought or leased films from the producer and then rented them to the exhibitor, thus guaranteeing a market for the producer and cost-effective availability for the exhibitor. This three-tier system is largely still in effect today.
Edison hoped to exploit the new commercial structure to exclude the mavericks once and for all. In 1908 he invited Armat, the distributor George Kleine and the seven leading companies - Biograph, Vitagraph, Essanay, Selig, Pathe, Lubin and Kalem - to form the Motion Picture Patents Company (MPPC), to which Melies was added the following year. Pooling their patents, the members agreed not to lease or sell to any distributor who dealt with any independent company. To strengthen their hand, they signed a deal with Eastman giving them exclusive access to perforated celluloid stock. Effectively, American production lay in the hands of just nine companies, while distribution was limited to the members of the General Film Company, who charged exhibitors a weekly $2 licence fee for the privilege of renting MPPC pictures. To protect their assets further from the moral backlash that accompanied the movie boom, the MPPC also founded the National Board of Censorship in 1908 (renamed the National Board of Review in 1915) to establish a consistent code of standards and principles. But no sooner had the Patents War ended than the Trust War broke out." 
The Trust versus the Independents
"The Trust was a combination of ten leading American and European producers of movies and manufacturers of cameras and projectors, who in 1908 combined to form a trust to inflate the prices of equipment they alone could manufacture. The Trust pooled patents and made thousands of short films. Only co-operating companies, licensed by the Trust, could manufacture 'legal' films and film equipment. The Trust extracted profits by charging for use of its patents. To use a projector legally an exhibitor needed to hand over a few dollars; to make movies, producers paid more." 
"Unwilling to brook the MPPC monopoly, the distributors William Swanson and Carl Laemmle went 'independent' and began to produce their own films. Others, including Fox and Zukor, followed suit and by 1910 they, and companies such as Reliance, Eclair, Majestic, Powers, Rex, Champion, Nestor, Lux and Comet, had united to form the Motion Picture Distributing and Sales Company, which sued the MPPC under government anti-trust laws. The MPPC responded violently, employing gangs to destroy equipment and intimidate casts and crews, but despite such strongarm tactics, the independents prospered and by the time the courts outlawed the MPPC in 1917 most of its constituents had already folded. The last, Vitagraph, was taken over by Warners in 1925." 
"The independents fought back the Trust by differentiating their products, making longer and more complicated narratives while the Trust tended to stick with two-reel, fifteen-minute stories. The independents raided pulp magazines, public domain novels, and successful plays for plots. Westerns supplied the most popular of these 'new' movie genres and helped spark interest in shooting on location 'out West'. In time the independents found their home in southern California, 2,000 miles away from the New York headquarters of the Trust and, with its temperate climate, cheap land, and lack of unions, an ideal place to make their new low-cost 'feature-length' motion pictures.
By 1912 the independents were producing enough films to fill theatrical bills. Each movie became a unique product, heavily advertised. With more than 20,000 cinemas open in the USA by 1920, the ever-increasing number of feature-length 'photoplays' easily found an audience. Distribution into foreign markets proved a bonus; in this era of the silent cinema, specialists quickly translated intertitles, and produced foreign versions for minimal added production costs.
The independents also began to take control of exhibition in the USA. They did not attempt to buy up all the 20,000 existing movie houses, concentrating instead on the new movie palaces in the largest cities. By 1920 these 2,000 picture palaces, showing exclusive first-runs, were capturing over three-quarters of the revenue of the average film. From these chains of movie palaces from New York City to Chicago to Los Angeles. the major Hollywood companies, led by Paramount. Fox, and MGM, were able to collect millions of dollars per year in profit.
By this time the independents were independents no longer. The most successful of these former independents succeeded at what the well financed members of the Trust had failed to accomplish control of the production, distribution, and exhibition of movies. From this massive base they moved to dominate the world." 
Social Pressures and Self-Censorship
"The quick spread of nickelodeons led to social pressures aimed at reforming the cinema. Many religious groups and social workers considered the nickel theaters sinister places where young people could be led astray. The movies were seen as a training ground for prostitution and robbery. French films were criticized for treating adultery in a comic fashion. Violent subject matter such as reenacted executions and murders were common fare early in the nickelodeon boom.
In late 1908, the mayor of New York briefly succeeded in closing down all the city's nickelodeons, and local censorship boards were formed in several towns. A concerned group of New York citizens formed the Board of Censorship in March 1909. This was a private body, aimed at improving the movies and thus forestalling the federal government from passing a national censorship law. Producers were to submit films voluntarily, and films that passed could include a notice of approval. As a way of gaining respectability, MPPC members allowed their films to be examined, and they even supported the board financially. This cooperation led the group to change its name to the National Board of Censorship (and, in 1915, to the National Board of Review). Although censorship boards continued to be formed on the municipal and state levels, no national censorship law was - or ever has been - passed. Variants of this policy of voluntary self-censorship have existed in the American film industry ever since.
Both the MPPC and the independents also tried to improve the public image of the movies by releasing more prestigious films that would appeal to middle- and upper-class spectators. Films became longer and more complex in their narratives. Stories derived from celebrated literature or portraying important historical events counterbalanced the popular slapstick chases and crime films. Some of these prestigious films, such as L'assassinat du duc de Guise (The Assassination of the Duc de Guise, 1908) and La caduta di Troia (The Fall of Troy, 1911), came from abroad. American producers increasingly turned to similar source material. In 1909, D.W. Griffith, on his way to becoming the most important American silent director, filmed Robert Browning's verse play Pippa Passes, quoting lines from the original as intertitles. Adaptations of Shakespeare's plays condensed to one or two reels became common.
Along with this move to appeal to refined audiences came a change in the theaters where films were shown. Some nickelodeons continued to operate well into the 1910s, but from 1908 on, exhibitors also began to build or convert larger theaters for showing films. These establishments might charge ten or twenty-five cents, or even more, for longer programs. Some theaters combined films and live vaudeville acts. Popular song slides, which were perceived as lower class, gradually disappeared as the better-class theaters began to use two projectors - and hence had no need for a song to cover the change of reels. Musical accompaniment by orchestras or pipe organs, ornate decorations, and occasional educational lectures accompanying the films were all designed to create an atmosphere very different from that of the nickel movie houses." 
The Star System
"In the earliest years of the cinema, films were advertised as novelties. Once the nickelodeon boom and the formation of the Motion Picture Patents Company had regularized the American industry, companies sold films by brand name. Spectators knew that they were seeing an Edison or a Vitagraph or a Pathe picture, but filmmakers and actors received no screen credit. In vaudeville, the legitimate theater, and the opera, the star system was well established. Film actors' names, however, were not publicized - in part because fame would allow them to demand higher wages.
Indeed, before 1908, few actors worked regularly enough in films to be recognized. At about that time, however, producers started signing actors to longer contracts, and audiences began to see the same faces in film after film. By 1909, viewers were spontaneously demonstrating interest in their favorites, asking theater managers the actors' names or writing to the studios for photographs. Fans made up names for the most popular stars: Florence Lawrence, who regularly appeared in Griffith's films, became "the Biograph Girl"; Florence Turner was "the Vitagraph Girl"; and Vitagraph's heartthrob, Maurice Costello, was dubbed "Dimples". Reviewers picked up this way of referring to anonymous stars. Of Griffith's 1909 film Lady Helen's Escapade, a commentator remarked, "Of course, the chief honors of the picture are borne by the now famous Biograph girl, who must be gratified by the silent celebrity she has achieved. This lady combines with very great personal attractions very fine dramatic abilities indeed."
By 1910, some companies responded to audience demand and began exploiting their popular actors for publicity purposes. Kalem supplied theaters with photographs to display in their lobbies. Personal appearances by stars in theaters became an institution. In 1911, the first fan magazine, The Motion Picture Story Magazine, appeared. That same year, an enterprising firm began selling photo postcards of popular players. Stars were named in advertisements aimed at exhibitors. Still, films seldom included credits until 1914." 
The Movies Move to Hollywood
"Entrenched in Hollywood folklore is the tradition that the film industry settled there because its distance from the MPPC's New York offices and its proximity to the Mexican border made it an ideal Trust-War haven. In fact, units had been shooting in such suntraps as Jacksonville, San Antonio, Santa Fe and Cuba since 1907 to maintain production levels during the East Coast winter. But in addition to long daylight hours, southern California also offered a diversity of scenery - mountains, valleys, islands, lakes, coastlines, deserts and forests - that could plausibly evoke locations anywhere in the world. Moreover, Los Angeles was a thriving theatrical centre, with a plentiful supply of casual labour, low taxes and an abundance of cheap land, which the companies bought for their studios, standing sets and 'back lots'." 
"The first American film companies were located in New Jersey and New York. Other producers emerged in Chicago (Selig, Essanay), Philadelphia (Lubin), and elsewhere in the East and the Midwest. Because filmmakers worked outdoors or in sunlit glass studios, poor weather could hamper production. After the formation of the MPPC in 1908, some film companies sent production units to sunnier climes for the winter: New York-based firms might head to Florida, while Chicago companies tended to go west.
As early as 1908, a producing unit from the Selig company filmed on location in the Los Angeles area. It returned there to set up a makeshift studio in 1909 and a more substantial one in 1910 In 1909, New York Motion Picture Company also established operations there. Several other firms began working around Los Angeles in 1910. American Biograph began sending Griffith there during the winter season.
During the early 1910s, the Los Angeles area emerged as the country's major production center. It had several advantages. Its clear, dry weather permitted filming outdoors most days of the year. Southern California offered a variety of landscapes, including ocean, desert, mountain, forest, and hillside. The Western had emerged as one of the most popular American genres and such films looked more a uthentic when filmed in the real West rather than in New Jersey.
The small suburb of Hollywood was one of several where studios were established, and its name eventually came to stand for the entire American filmmaking industry - despite the fact that many decisions were still made in New York, in the head offices of the companies. Studios in the Hollywood area would soon grow from small open-air stages to sizable complexes with large enclosed studios and numerous departments."  "By the early 1920s the social impact of Hollywood's glamorous image was enormous. As early as 1920, the Hollywood Chamber of Commerce was obliged to run advertisements begging aspiring actors and actresses to stay at home, pleading: 'Please Don't Try to Break into the Movies'." 
The Rise of the Studio System
"Around the year 1910 a number of film companies set up business in and around the small suburb of Hollywood to the west of Los Angeles. Within a decade. the system they created came to dominate the cinema, not only in the United States but throughout the world. By concentrating production into vast factory-like studios, and by vertically integrating all aspects of the business, from production to publicity to distribution to exhibition, they created a model system - the 'studio system' - which other countries had to imitate in order to compete. But attempts at imitating the American system were only partially successful, and by 1925 it was the 'Hollywood' system, rather than the studio system as such, which dominated the market from Britain to Bengal, from South Africa to Norway and Sweden. By that time, Hollywood had not only seized control of the majority of world markets but had made its products and its stars, such as Charlie Chaplin and Mary Pickford, the most famous cultural icons in the world." 
The Majors and the Minors
"It was during the teens in Hollywood, too, that the major studios as we know them today began to take shape. Carl Laemmle folded his IMP Company into a group of smaller companies to create Universal Pictures in 1912; the aforementioned William Fox, Laemmle’s ally in the war against the Edison Trust, created the Fox Film Corporation in 1915; it would later merge with Twentieth Century Pictures in 1935, under impresario Darryl F. Zanuck. Metro Goldwyn Mayer (MGM), with its famous lion logo at the start of each film and the motto "Ars Gratia Artis" (Art for Art’s Sake) boldly emblazoned across the screen, followed in 1924, rising out the combined talents of Samuel Goldwyn, Marcus Loew, Louis B. Mayer, and financial wizard Nicholas Schenck. Goldwyn would soon leave the group to form the eponymous Goldwyn Pictures, and Louis B. Mayer would become undisputed chief of production for decades, although he, too, had to answer to Schenck, whose offices were in New York, on all major financial matters. Adolph Zukor’s Famous Players merged with Jesse Lasky’s Feature Play Company to form Paramount Pictures (also known as Paramount Publix), using the Paramount distribution exchange to market their pictures to a series of wholly owned theaters across the United States; by the mid-1930s, Paramount would effectively have a monopoly on film production and distribution through Zukor’s strategy of "vertical integration," in which studio-owned theaters could play only Paramount product, thus ensuring a steady market for the studio’s films.
Jack, Sam, Albert, and Harry Warner formed Warner Bros. in 1923; soon, Jack L.Warner emerged as the head of production in Hollywood though he also had to answer to a higher power - in his case his brother Harry - on matters of finance. United Artists was moving along at a solid clip, buoyed by the success of Mary Pickford’s star vehicles and Douglas Fairbanks Sr.’s swashbucklers. Columbia Pictures was founded by Jack and Harry Cohn in 1924, with Jack emerging as the financial czar and Harry as perhaps the most ruthless studio boss in Hollywood, eventually nicknamed "White Fang" by writer Ben Hecht and later "King Cohn" for his brutal manner of doing business. But although Harry Cohn may have been the most abrasive of the studio bosses, all these men were exceptionally tough businessmen in a business that was rapidly consolidating its hold on the American public." 
The Hollywood oligopoly replaced the Edison monopoly. Within this new system, a pecking order was soon established which left little room for any newcomers. At the top were the five major studios, 20th Century Fox, Metro-Goldwyn-Mayer, Paramount Pictures, RKO Pictures, and Warner Bros. Beneath them were Columbia Pictures, United Artists, and Universal Studios. Finally there was "Poverty Row", a catch all term used to encompass any other smaller studio that managed to fight their way up into the increasingly exclusive movie business. It is worth noting that though the small studios that made up Poverty Row could be characterized as existing "independently" of any major studio, they utilized the same kind of vertically and horizontally integrated systems of business as the larger players in the game. Though the eventual breakup of the studio system and its restrictive chain-theater distribution network would leave independent movie houses eager for the kind of populist, seat-filling product of the Poverty Row studios, that same paradigm shift would also lead to the decline and ultimate disappearance of "Poverty Row" as a Hollywood phenomenon.
The Poverty Row included Republic Pictures, which specialized in westerns and children’s serials and absorbed the smaller Mascot Pictures corporation of Nat Levine, which also dealt primarily in action fare; Monogram, which would come to its greatest prominence in the 1940s as the home of an interminable series of Bela Lugosi horror movies and Bowery Boys comedies; and Producers’ Releasing Corporation (PRC), reputedly the cheapest studio in Hollywood history, where two-day westerns were cranked out with alarming regularity in the 1940s, along with five-day film noirs dealing with the darker side of human existence.
|The Big Five majors
||The Little Three majors
|20th Century Fox
||Producers Releasing Corporation (aka PRC)
In the 1950s, such independents as American International Pictures would come along to challenge the system, but from the 1910s through 1955, the majors reigned supreme. There were, of course, exceptions. Although he released his films through United Artists, Chaplin remained a true independent, with his own studio facility in Los Angeles (now the home of A & M Records)." 
The Production System
"During the late 1910s and early 1920s, the successful companies, led by Adolph Zukor's Famous Players-Lasky corporation, developed a system by which to manufacture popular films on a large scale. This system was much admired abroad, and film industries the world over sent their representatives over to Hollywood to study and, if possible, copy it.
The centrepiece of the product offered by the Hollywood companies was the feature film, generally about ninety minutes long. Ten-minute newsreels or animated subjects might provide a complement, but it was the feature that sold the show. Ironically, inspiration for this had come from Europe. Through the 1910s foreign features repeatedly demonstrated that longer films could draw sizeable audiences. The then independents imported epics from European film-makers who did not care to book through the Trust. The success of prestigious Italian productions such as Dante's Inferno (1911) not only proved there existed a market for longer fare, but helped to give the new medium much-needed respectability in the eyes of the traditional middle class.
Hollywood centred its promotional efforts on the star system. Publicists had to acquire the art of manipulating the new techniques of mass advertising and mass communication to create something special in the minds of the growing middle-class public. Stars provided an effective means of differentiating feature films, making each individual title an unrnissable attraction. In 1909, for example, Carl Laemmle lured Florence Lawrence from Biograph, and named her his 'IMP Girl' - the letters representing his Independent Motion Picture Company (later Universal). Laernmle then sent his star on tour and planted story after story in the newspapers, including one falsely reporting her death.
Others plucked their stars from the legitimate stage. Adolph Zukor's pioneering company Famous Players (later Paramount), whose slogan was 'Famous Players in Famous Plays', achieved early successes with The Count of Monte Cristo (1913) starring James O'Neill, The Prisoner of Zenda (1913) starring James Hackett, Queen Elizabeth (1912) starring Sarah Bernhardt, and Tess of the D'Urbervilles starring Minnie Maddern Fiske.
Zukor soon saw the need to develop his own stars, not simply buy up already established names. Mary Pickford saw her salary increase from $100 a week in 1909 to $10,000 per week in 1917 as Zukor made her the biggest star of her day. Zukor's rivals developed their own 'Little Marys', and 'inked' them to exclusive, long-run contracts. The Hollywood companies then fashioned elaborately prepared scenarios as centrepieces for their stars. But the stars were quick to realize that, if they were so important to the studios, they had bargaining power of their own. Although many remained tied to exploitative contracts, some of the most successful broke loose from the system. On 15 January 1919, major luminaries Charlie Chaplin, Douglas Fairbanks, and Mary Pickford joined with director D. W. Griffith to create United Artists, and issued a declaration of independence from their former studio bosses. United Artists announced it would distribute star-produced features so their makers could extract the riches their star power had generated.
United Artists was an anomaly. The standard Hollywood system of feature film-making sought to guarantee the shipment of attractive films to theatres on a weekly basis, and the studios developed efficient and cost-effective production methods to produce films that filled theatres. This factory system would prove the best method by which to provide a regular supply of films.
Gradually during the 1910s, as the demand for narrative films increased, specialists were trained to assist the director to make movies faster. Writers thought up story lines, scenic artists painted backgrounds, and designers fashioned appropriate costumes.
Soon film-makers realized that it was less expensive to shoot the story out of order, rather than chronologically record it as it might be staged in a theatre. Once all planned scenes were filmed, an editor could reassemble them, following the dictates of the script. All this required a carefully thought out, prearranged plan to calculate the minimum cost in advance. Such a plan became known as the shooting script.
Studio bosses planned a programme of films a year in advance. Sets were efficiently used over and over again, and adapted for different stories. Art directors designed and constructed sets; casting directors found the talent; make-up artists perfected the glamorous movie look; and cinematographers were picked to shoot scripts as written. Time was of the essence. so actors were shuttled from film to film. Often multiple cameras were used for complicated shots (for example, a battlefield sequence) to avoid having to stage them twice. And always present was the continuity clerk. who checked that, when shooting was completed, the film could be easily reassembled." 
Distribution and Control of the Market
"By 1921 Zukor had fashioned the largest film company in the world-his Famous Players. Five years earlier he had merged twelve producers and the distributor, Paramount, to form the Famous Players-Lasky Corporation. By 1917 his new company included stars such as Mary Pickford, Douglas Fairbanks, Gloria Swanson. Pauline Frederick, and Blanche Sweet. Two years later, about the time Pickford and Fairbanks left to form United Artists, a quarter of the cinemas in the USA were regularly presenting Famous Players films.
Famous Players began to block book its yearly output of 50 to 100 feature films. which meant that the theatre owner who sought to show the films of Mary Pickford had also to take pictures featuring less well-known Famous Players stars. In turn, Famous Players used these guaranteed bookings to test and develop new stars, and to try new story genres. When major theatre owners began to baulk at the risks involved, Zukor stepped in, acquired theatres. and set up his own theatre chain.
During the 1920s Famous Players became a high-flyer on the New York Stock Exchange. Others soon followed. Marcus Loew put together Metro-Goldwyn-Mayer. William Fox expanded his film company as did Carl Laemmle with his Universal Studios. Even stalwart independents United Artists built a theatre chain. Thus a handful of major, vertically integrated companies came to dominate and define Hollywood.
It was not enough, however, that this small handful of companies controlled all the movie stars and theatres. They sought to expand their markets beyond the US border, to establish distribution all over the world. The First World War offered a crucial opening. While other national cinemas were constrained. the leading Hollywood companies moved to make the world their marketplace. To maintain conditions for maximizing profits abroad, the major Hollywood companies formed an association, the Motion Picture Producers and Distributors Association of America (MPPDA), and hired former Postmaster-General Will H. Hays to keep these international markets open.
By the mid-1920s. Hollywood dominated not only the major English-speaking markets of Great Britain, Canada, and Australia, but most of continental Europe except for Germany and the Soviet Union, and had successfully expanded into South America, Central America, and the Caribbean. Indeed Hollywood's continued international monopoly forced film entrepreneurs in other countries to struggle to please their native audiences, somehow to 'better' Hollywood. But with their control of international distribution, the Hollywood corporations could and would define appropriate standards of film style, form, content, and money-making. Imitation would not work, however competitive the product." 
The Picture Palace
"The production and distribution of films constituted only two of the three essential pegs of institutional Hollywood power. Movie moguls knew that money came through the theatrical box-office and thus sought some measure of control over exhibition, the third crucial sector of the film business. If 'Hollywood' was initially a group of California studios and offices for distribution throughout the world, it also came to include a cluster of movie palaces situated on main streets from New York to Los Angeles, Chicago to Dallas, and, within a short time, London and Paris as well.
The modern movie palace era commenced in 1914 with Samuel'Roxy' Rothapfel's opening of the 3,000-seat Strand in 1914 in New York. Roxy combined a live vaudeville show with movies. His vaudeville 'presentation' offered a little something extra that attracted audiences away from more ordinary movie houses down the street. Roxy's shows opened with a house orchestra of fifty musicians playing the national anthem. Then came a newsreel, a travelogue, and a comic short, followed by the live stage show. Only then came the feature film.
The movie palace itself was far more than just a theatre. The splendour of its architecture and the 'touch of class' lent by the ubiquitous ushers evoked a high-class fantasyland. Adolph Zukor soon caught on to Roxy's innovations and swooped in to purchase a string of movie palace theatres, thus gaining control of a fully integrated system of motion picture production, distribution, and exhibition.
Roxy was never able to sustain his economic enterprise and sold out. Chicago's Balaban & Katz, however, developed an economic system for making millions of dollars from their movie palace empire and, in the period immediately after the First World War, pioneering exhibitors took their cue for maximizing profits from the extraordinary success of this Chicago corporation, Indeed, Adolph Zukor approached Balaban & Katz and the two operations merged and created Paramount Pictures in 1925, marking the true affirmation of the Hollywood studio system in its three-part strategy of domination.
The architecture of the movie palace insulated the public from the outside world and provided an opulent stage for the entertainment. The Chicago architectural firm headed by the brothers George and C. W. Rapp designed the new-style theatres by mixing design elements from nearly all past eras and contemporaneous locales, among them classic French and Spanish designs and contemporary art deco renderings. Film-goers soon came to expect triumphal arches, monumental staircases, and grand, column-lined lobbies (inspired by the Hall of Mirrors in Versailles). Façades were equally dramatic.
Strong vertical lines were accentuated by ascending pilasters, windows, and towers, sweeping high above the tiny adjacent shop-fronts. The actual theatre building was made from a rigid, steel shell, on which plaster-made decorations hung in brilliant purples, golds, azures, and crimsons. Massive steel trusses supported thousands of people in one or two balconies.
Outside, colossal electric signs could be seen for miles. The upright signs towered several storeys high, flashing forth their messages in several colours. Behind them, stained-glass windows reflected the lights into the lobby, evoking an ecclesiastical atmosphere and linking the theatre to the traditional, respected institutional architecture of the past.
Once inside, patrons weaved through a series of vestibules, foyers, lobbies, lounges, promenades, and waiting rooms designed to impress and excite. The lobbies and foyers were, if anything, more spectacular than the architectural fantasy outside. Decorations included opulent chandeliers, classical drapery on walls and entrances, luxurious chairs and fountains, and grand spaces for piano or organ accompaniment for waiting crowds. And since there always seemed to be a queue, keeping newly arriving customers happy was as important as entertaining those already seated. Inside the auditorium, everyone had a perfect view of the screen, and careful acoustical planning ensured the orchestral accompaniment to the silent films could be heard even in the furthest reaches of the balcony.
Balaban & Katz offered free child care, rooms for smoking, and picture galleries in the foyers and lobbies. In the basement of each movie palace a complete playground included slides, sand-pits, and other objects of fun for younger children left in the care of nurses while their parents upstairs enjoyed the show.
Ushers maintained a constant quiet decorum within the auditorium proper. They guided patrons through the maze of halls and foyers, assisted the elderly and small children, and handled any emergencies. Balaban & Katz recruited their corps from male college students, dressed them in red uniforms with white gloves and yellow epaulettes, and demanded they be obediently polite even to the rudest of patrons. All requests had to end with a 'thank you'; under no circumstances could tips be accepted.
Most of the features described above could be easily copied by any theatre chain willing to make the necessary investment. One part of the Balaban & Katz show, however, was unique. Balaban & Katz offered the first air-conditioned movie theatres in the world, providing summertime comfort no middle-class citizen in the sweltering Midwestern states could long resist. After 1926 most important movie palaces either installed air conditioning or built the new theatre around it.
There had been crude experiments with blowing air across blocks ofice, but prior to Balaban & Katz's Central Park Theatre most movie houses simply closed during the summer or opened to tiny crowds. The movie palace airconditioning apparatus took up an entire basement room with more than 15,000 feet of heavy-duty pipe, giant 240-horsepower electric motors, and two 1,000-pound flywheels. Soon summer became the peak movie-going season. With its five-part strategy-location, architecture, service, stage shows, and air conditioning-Balaban & Katz set the scene for a redefinition of movie-going in the USA.
With the merger with Famous Players, Sam Katz successfully transferred the Balaban & Katz system to Paramount's national chain of theatres. Other companies quickly followed suit: Marcus Loew with MGM, and Warner Bros. with their First National chain. But none could rival the success of Adolph Zukor and Paramount. As the silent era drew to a close, it was Zukor and Paramount who had the top stars, the most world-wide distribution, and the most extensive and prestigious theatre chain-the very model of the integrated business through which Hollywood's power was asserted." 
Early Movie Stars
"While Chaplin was one of the greatest of the early cinema stars, he had considerable competition from a number of newcomers, many of whom, like Chaplin, hailed from vaudeville or the music hall stage. John Bunny, a rotund comic, became the screen’s first lovable fat man until his death in 1915; Francis X. Bushman and Beverly Bayne were one of the screen’s first romantic teams - married in real life, they were forced to keep their nuptials a secret to appease their fans. Alla Nazimova became the screen’s first sophisticated European leading lady in such films as Billions (1920), while Mary Pickford, whose salary demands rivaled those of Chaplin, was dubbed "America’s sweetheart" for a succession of films in which she portrayed a poor young woman adrift in an often hostile world, such as Paul Powell’s Pollyanna (1920). Pickford’s later films used oversized props and children’s clothing to continue the deception that she was still the ageless young waif of her earlier films. When sound came, Pickford failed to adapt and shortly thereafter retired from the screen.
'Instant read' typecasting also became popular, with a readily recognizable hero and heroine as the center of the plot, attended to or menaced by a gallery of iconic maternal and paternal figures, swarthy villains, or seductive women, better known as vamps. Theda Bara (real name Theodosia Goodman) became the screen’s first femme fatale in her groundbreaking vehicle A Fool There Was (1915), starting a craze for decadent romances that lasted throughout the 1910s and revived in a slightly less theatrical manner in the 1940s.
Mabel Normand, a Mack Sennett protégée, was perhaps the screen’s greatest silent comedienne, and also tried her hand at directing. Outrageous comics like Ben Turpin (famous for his trademark crossed eyes); Roscoe “Fatty” Arbuckle, an amply proportioned slapstick comedy master; and Larry Semon, an expert in pie fights and thrill chase comedies, all took their place on the screen. Along with Chaplin, the most important comics of the era were undoubtedly Buster Keaton and Harold Lloyd, both masters of the sight gag, but in a very different fashion.
Keaton entered the cinematic arena in 1917 and worked mostly with Fatty Arbuckle in his initial efforts. But by 1919, following Chaplin’s example, Keaton opened his own production company and created some of his finest short films, such as Cops (1922) and The Balloonatic (1923), both co-directed by the gifted Edward F. Cline. By 1924, with Sherlock Jr., he had entered feature filmmaking with a decisive impact, and he followed it up with The General (1926, co-directed with Clyde Bruckman), often acknowledged to be his finest film. Keaton’s humor derived from his lack of expression or emotion, no matter how perilous the situation in which he might find himself. Nicknamed “the Great Stoneface,” he remained seemingly impassive in the face of perpetual comic disaster and enjoyed his greatest success during the silent era. With the coming of sound, his roles diminished, and he was often teamed - much to his detriment - with the fasttalking verbal comedian Jimmy Durante.
Harold Lloyd had much the same career trajectory; a specialist in “thrill” comedy, Lloyd would climb buildings and seemingly risk his life in such classic shorts as Fred C. Newmeyer and Sam Taylor’s Safety Last! (1923), in which his fresh-faced persona seemed at odds with the danger his character incessantly courted on the screen. Lloyd did many of his own stunts, though he “cheated” distance and perspective in some of his most ambitious thrill comedies to heighten the effect. Born in Nebraska in 1893, he began his career working for Edison and later moved over to Mack Sennett’s Keystone Studios, but the two comic geniuses didn’t click. It was at Hal Roach’s studio that Roach and Lloyd came up with the basic character for Lloyd’s most successful screen comedies: a mild-mannered, bespectacled man, unwittingly caught in situations of dire peril.
Early film serials, such as Charles Brabin’s What Happened to Mary? (1912), Louis J. Gasnier and Donald MacKenzie’s The Perils of Pauline (1914), and Howard Hansel’s The Million Dollar Mystery (1914), introduced audiences to the self-reliant heroine, in stories that ran as long as twenty chapters or more. Each new installment played weekly, leaving the protagonist in impossible danger in a cliffhanger ending, only to find a way to safety in the next installment. In the wake of “Broncho Billy” Anderson, whose cowboy films were by his own admission fanciful romances, former Shakespearean actor William S. Hart brought a new realism to the screen, directing and appearing in such westerns as The Gun Fighter (1917). Hart’s films galvanized the public with a new vision of the West as a hostile, unforgiving terrain. In contrast to Broncho Billy’s films, many of Hart’s westerns have tragic endings.He typically portrayed women as vamps or seductresses, bent on his own character’s destruction. Using spare sets, harsh lighting, minimal makeup, and scenarios that highlighted suffering and pathos, his vision of the West is closest to films of Clint Eastwood, such as Unforgiven (1992), in their uncompromising depiction of the desolate American frontier.
Other stars of the period included Pola Negri, a seductive vamp of the period who also excelled in straight dramatic roles, such as in Ernst Lubitsch’s Forbidden Paradise (1924), and Clara Bow, known as the “It” girl for her numerous portrayals of flaming youth run wild in the early 1920s (the name derived from her vivacious appearance, with plenty of sex appeal, in Clarence G. Badger’s 1927 film It). Rudolph Valentino was the personification of the Latin lover, in a series of ornate costume dramas such as Joseph Henabery’s A Sainted Devil (1924), Rex Ingram’s The Four Horsemen of the Apocalypse (1921), and his signature role in George Melford’s The Sheik (1921). Rin Tin Tin became one of the first animal stars, as the “wonder dog” who could do anything - a precursor of Lassie.
Horror films boosted the great Lon Chaney Sr., better known as “the Man of a Thousand Faces,” who dominated the genre in the 1920s with such films as Wallace Worsley’s The Hunchback of Notre Dame (1923) and Rupert Julian’s The Phantom of the Opera (1925). Though in his early years he also worked as a writer and director, Chaney, an expert at makeup, created all the fantastic faces for which he became known as an actor, appearing in over 150 films before his death in 1930, shortly after the release of his only talking film, Jack Conway’s The Unholy Three, a remake of his 1925 hit film (directed by Tod Browning) of the same name." 
A Breathe of Scandal
"In the midst of production and prosperity, a storm was brewing. It would not fully come to a boil until 1934, the early sound era, but the 1920s saw the beginning of a phenomenon that the studios both feared and ultimately capitulated to: organized censorship. A series of scandals erupted, including the murder of director William Desmond Taylor in 1922, who left behind love letters naming the popular stars Mabel Normand and Mary Miles Minter as two of his better-known paramours.
Also in 1922, Fatty Arbuckle was indicted in the death of young star Virginia Rappe; it was said that Arbuckle had raped her at a party that had turned into an orgy, although Arbuckle was eventually acquitted of the charge. Arbuckle, Minter, and Normand were all forced to leave the screen as a result of the ensuing bad publicity; pathetically, Arbuckle tried to make a comeback several years later under the name Will B. Good, but to no avail. At the same time, one of the silent era’s most popular stars, Wallace Reid, died in 1923 as a result of morphine addiction and alcoholism at the age of thirty-one, and mainstream America demanded that the motion picture industry clean house.
In late 1922, the motion picture studios chose Will H. Hays, then the postmaster general in the Harding administration, to head the newly formed Motion Picture Producers and Distributors of America, or the MPPDA. Soon known informally as the Hays Office, the MPPDA set about to police the private lives of the stars, inserting morality clauses in the contracts of all studio personnel that subjected them to immediate dismissal if they failed to live up to a stringent code of personal conduct. Not coincidentally, Wallace Reid’s wife, actress Dorothy Davenport Reid, became a director in 1923 with her production of Human Wreckage (in which she also starred), about the evils of narcotics - made with the approval and assistance of the Hays Office." 
"The Hollywood system crested in the heady days prior to the Great Depression. Hollywood as an industrial institution had come to dominate the world of popular entertainment as no institution had before. The coming of sound simply eliminated competition from the stage and vaudeville. But change was on its way, precipitated by the Depression and by the rise of the new technologies of radio and television. Hollywood at the end of the 1920s and throughout the 1930s was faced by a series of shocks - falling audiences, the loss of some overseas markets, threats of censorship, and anti-monopoly legislation. But it adjusted and survived, thanks to the solid foundations laid by its pioneers." 
-  David Parkinson, History of Film (World of Art) (Thames and Hudson, 1996) pp 28-29
-  Geoffrey Nowell-Smith, The Oxford History of World Cinema (Oxford University Press, 1996) pp 14-15, 43-53
-  Kristin Thompson & David Bordwell, Film History: An Introduction (McGraw-Hill, 2003) pp 27-30, 37-42
-  Wheeler Winston Dixon & Gwendolyn Foster, A Short History of Film (Rutgers University Press, 2008) pp 17-18, 33-41