The history

Part 2: The troubles begin

International influence and conflict
The rapid global spread of cinema created a huge demand for films that most national production could not satisfy. International trade within Europe had become established by the turn of the century and across the Atlantic by 1903. Film-makers were aware of what their counterparts were doing elsewhere. As story ideas cannot be copyrighted, films were often re-made in different places—a practice that Hollywood, even with stringent enforcement of intellectual property rights, has continued ever since.
      Life of an American Fireman, an American equivalent of James Williamson’s Fire! (1901) was directed by Edwin S Porter for the Edison Company two years later, following an almost identical narrative development shot-for-shot and with essentially similar framing. On the other hand, G A Smith’s Mary Jane’s Mishap (1903) was an extended and more sophisticated reworking of two earlier American films.

The film industry is conventionally divided into three phases: production, distribution and exhibition, mirroring the structure of most consumer industries as manufacturing, wholesale and retail sectors. In the earliest days, the film-makers showed their own films and sold copies to others. The ‘wholesale’ function emerged quite quickly in the form of ‘film exchanges’, through which the filmmakers could sell their work. This was notably the practice in the United States.
      European films were very popular in the USA. Language was not a barrier in silent cinema—any intertitles could be replaced quickly and easily in other languages if necessary—so British, French, German, Danish and Italian films went down well with American audiences. But not with American film patent owners, who could see control of their home industry slipping away. Independent production was booming to satisfy the demand for films from the rapidly expanding number of nickelodeons. Lawsuits over patent infringement were proliferating in an attempt to curb unlicensed competition.
      A more potent challenge, however, was presented by European films, which accounted for 70 per cent of the American market in November 1908. It will be remembered that Edison had not patented his kinetoscope in Europe, allowing copies of his basic equipment to be made freely and improved.
      When the Motion Picture Patent Company (MPPC) was formally established in December 1908 under the leadership of Thomas Edison, it hit British film-makers particularly hard—Williamson more than Smith, who was now making films for the Natural Colour Kinematograph Company, whose technology was based on patents held by Smith. It could thus stand aside from the confrontation with Edison et al.
      The circumstances leading to the formation of the Motion Picture Patent Company (MPPC), from its inception known as The Trust, were complex, involving negotiations, confrontations and ruthless politicking among the leading American film companies—too protracted to be covered in detail here. An account is given in Martin Sopocy’s indispensible book on James Williamson and in Kristin Thompson’s Exporting Entertainment, among others.
      It was the outcome that devastated European film. As well as enforcing patent protection to quell competition, the companies that formed the MPPC had also hit on a trick called ‘block booking’ or ‘blind booking’. Under this scheme the most popular films were bundled with a batch of other films. Exhibitors who wanted the best titles were thus saddled with inferior films that, having paid for them, they screened, thus blocking out better films from other distributors.
      The most pressing issue for European independent producers was to defend against the impact of the recently formed MPPC. This threatened to block access to the American market for nearly all European producers. The only European company admitted to membership of the MPPC was Pathé.
      Until then films from Gaumont, Urban-Eclipse and Williamson had been imported by George Kleine, a distributor based in Chicago. The condition, said to have been imposed by Pathé rather than by the Americans, was that Kleine should drop them from his inventory. All other European film companies faced the loss of a lucrative market where they had been enjoying popular and financial success.
      A conference was convened, Le Congrès International des Editeurs du Film (CIEF: International Film Publishers Congress), that met in Paris on 2-4 February 1909.

George Eastman [third from left in the front row], who had a virtual American monopoly in raw film stock bearing his Kodak brand, came over from the States to try to get the Europeans to form a similar body to the MPPC. Charles Urban [fourth from right in the front row] and James Williamson [just behind and to the right of Eastman] were among the delegates. The only outcome, however, was that the industry would move from outright sale of prints to the rental business model that Pathé had pioneered.
      Williamson packed in production to concentrate on equipment sales and film distribution. Another outfit, Brightonia, made a few films but then south-coast film production shifted along the coast to Shoreham, where it became well established for a short time after the First World War.

Competition and taxes
The loss of the American market was a bitter blow, felt even more keenly as war loomed. In 1910 only 15 per cent of films released in the UK were British. America, with a 28 per cent share, did not yet top the league of countries supplying the British market—that privilege went to France with 36 per cent—and even Italy managed 17 per cent.
      Adding to the cinema’s woes was the entertainments tax that the government introduced in 1916, applying to all forms of entertainment. This was disproportionately skewed to tax the cheapest tickets most, so cinemas—which outnumbered theatres 10-to-one and music halls three-to-one—were most seriously affected. The tax on a ticket costing from 2d to 6d was a penny (which works out at between 17 and 50 per cent). The tax on a ticket costing between 5s and 7s 6d was 6d (6.7 to 10 per cent). The tax rates were fiddled with by successive Chancellors of the Exchequer, as much as doubling the price of admission during the Second World War. In 1945 out of gross cinema box office revenue of £115 million, £17 million went to American film companies and £41m in tax to Customs & Excise. The entertainments tax was not repealed until 1960.
      Sidney Morgan, soon to take over the film studio at Shoreham Beach, is credited with being the first to suggest a mandatory quota for screening British films. Speaking at a trade luncheon reported by Kinematograph Weekly (17 May 1917) he argued that block booking by American distributors made it difficult for British films to get a screening. He pointed out that in the past month the British Board of Film Censors had passed 27,000 feet of British films (roughly 7½ hours of screen time) and 405,000 feet of American films (112½ hours). He proposed that a condition in cinema licences should be that a third of all films shown should be British. Nevertheless, only three weeks earlier Kine Weekly (26 April 1917) had reported that Morgan was not claiming American competition to be unfair but that British audiences should not be culturally subverted to such an extent.

The next time the government intervened was in 1927, but only after the various factions in the film industry had failed to come up with a scheme to help themselves. After a brief respite during the first half of the Great War, British production had been floundering, so much so that in the early 1920s even politicians were worrying about the extent of American influence on British cinemagoers.
      In 1925 British films’ share of their home market had shrunk to five per cent. Something had to be done. One option was to stimulate the production of more and better British films. Another was to force cinemas to show whatever British films were on offer. Naturally, exhibitors wanted to remain free to show whatever films they thought would appeal to the public, even if that meant American.
      The Big Idea was to establish a brand new production centre, with all mod cons. The government was in favour and even had a funding scheme that the studio promoters could draw on. Brighton Corporation enthusiastically offered a site.

      Unfortunately, it was left to the producers and exhibitors to agree on a package to present to government. This they failed to do. So in 1927 the government legislated to introduce a quota—a measly five per cent of screen time to begin with, steadily rising by 1935 to 20 per cent. Germany, Hungary and Italy already applied quotas. Australia, Austria, France and Portugal all introduced one around the same time as the UK.
      The Cinematograph Films Act 1927 also banned blind booking and restricted advance booking of films. Subsequent Acts also imposed similar restrictions. Not very effectively, it has to be said, as the Monopolies [and Mergers] Commission was still being asked to produce reports on the subject in 1944, 1967 and 1983.
      The tenor of most criticism within the UK film industry was progressively that distributors, being mostly controlled by the American majors, did not always act in the best interests of British producers and exhibitors. Distributors got round the ban on block booking by making the hire of one film conditional on taking others, a practice therefore known as conditional booking, which was still one of the bones of contention in the 1983 report on the supply of films. You may well wonder what the difference is.
      Another practice that had a negative effect on all but the main cinemas was known as barring. There had been a pecking order for cinemas in any given locality, ranging from the first-run screens that got films as soon as they went on national release, down to third- and fourth-run houses that might have to wait for three months or more. Barring prevented new releases from being seen on more than one screen within a certain geographical radius.

Go to Part 1: Off to a good start
Go to Part 3: Sound and decline
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©David Fisher 2010-2022