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4 ^> ^> ^> The Motion Picture Industry
were sporadic and were sold outright to showmen by the producers. Projection upon the screen, however, enabled many patrons to view a subject simultaneously, thereby shortening the duration of the demand in a given community. Thus a need for a more frequent change of programs became manifest. However, as the exhibitor acceded to this demand, he found himself in possession of an obsolete but physically undepreciated stock of films. Since frequent changes of subject became necessary before cost and expenses could be covered and a profit made, the film cost soon became excessive. Inasmuch as a separate print had to be made for each exhibitor, the system also involved an uneconomic duplication of prints.
The solution to this problem was first suggested in 1902 by Harry J. Miles of San Francisco. Miles purchased films and leased them successively to various exhibitors for a week at a time at half the original purchase price. Thus each exhibitor's film cost was cut in half, and at the same time Miles realized a handsome profit, his films having made the rounds of nearby exhibitors. In this initial effort is to be found the origin of the film exchange, wherein a new • functionary appeared wTho confined his activities wholly to those of middleman. He maintained film stocks, supervised the physical handling of the product as it passed from one exhibitor to another, scheduled shipments to meet changes of program, and attended to the inspection and repair of damaged films. The most significant development in this period, however, was the altered terms of sale by virtue of which the title to the film remained with the exchange man; the exhibitors merely obtained a license to exhibit a particular film in a particular place for a stipulated period of time.
However, even thus early in the development of the industry there evolved one of the most serious of problems. It must be borne in mind that the number of motion picture houses was steadily increasing, with a consequent increase in the demand for films. An essential requirement, as has