BUSINESS: TOWARD NATIONAL EXPANSION
THE remarkable success of story films-- The Great Train Robbery in particular--caused a fresh outpouring of capital into the motion picture trade. Between 1903 and 1908 the movies ascended from the level of petty commerce to that of a large, permanent business, with three distinct phases which were eventually to grow into big separate industries. The introduction of the exchange system of distribution, special movie theatres, and large studios made the "flimsy upstart," as movies had been termed in 1903, a bonanza for entrepreneurs. Demand for films mounted phenomenally: the movies now were becoming a commodity for the masses.
The wide adoption of the exchange system facilitated and quickened the commercial development of the industry. The "jobber," handling many products from various manufacturers, was then a novel figure in the mercantile world. When he entered the movie business, he made its rapid expansion possible. Until now exhibitors had bought their films, and their investments had been so heavy that they had begun exchanging pictures among themselves. The jobber was to develop an efficient system of exchange out of this awkward method of distribution.
Among the first to become aware of the need for a business which neither made nor showed films, but distributed them, was a free- lance cameraman, Harry J. Miles. With his brother Herbert, he established early in 1903 what proved to be one of the most important and profitable developments in the motion picture industry: a film exchange. Miles Brothers' Exchange bought films from the manufacturers and rented them to exhibitors at one-fourth the pur