- The cinema as an entertainment industry emerged from a series of innovations in the late nineteenth century, mostly in the United States, France and the United Kingdom.
- In the UK, filmmakers established small studios to produce short films for use by travelling showmen and in music-halls.
- In the first decade of the twentieth century, more than 30 film studios were established in and around London.
- British films rapidly established a substantial share of the market at home and abroad, including some 15 per cent of the American market by 1910
- This initial success rapidly faded as American production took off with expensive and heavily marketed feature films
- Film production was waning, cinema going flourished as a pastime of the British public
- In 1908 investment in cinemas surged, with the finding of many new companies wiht investment of £1.5m (£140m at current prices)
- The Government recognized the potential of the film industry, initially as a source of revenue, when it included cinema, together with other entertainments, such as music hall and theatre, in the Entertainment Tax, introduced in 1916.
- The rate, which was initially set at between 25 and 50 per cent of the price of cinema tickets, was reduced in the 1920s and then raised during the Second World War however it was finally abolished in 1960
First Government support
- By 1925, British film production had declined
- Fewer than 40 feature films a year were being made, compared with over 150 in 1920.
- The vast majority films shown here were American.
- May 1925, lord Newton raised the issue in the house of lords, 'industrial, commercial, educational and imperial interests'.
- In 1927, the government recognized the importance of film production to the British economy.
- The Cinematograph Films Act 1927 recognized the interdependency of production, distribution and exhibition, and sought to encourage home production by setting quotas for British-made films to be met by both distributors and exhibitors.
- The act was successful in the sense that production of films in the UK doubled.
- It also established several new production companies, including British international Pictures at new studios in Elstree, Warner studios at Teddington and Fox's studios at Wemberly.
The challenging of American film export
- The Government was quick to recognise the domestic importance of the film industry
- the American authorities were even quicker to recognise its importance as an export industry
- American missions abroad were reporting on foreign film market opportunities as early as the 1910s.
- In 1926, Congress appropriated $15,000 to set up the Motion Picture Section within the Bureau of Foreign and Domestic Commerce of the Department of Commerce
- This collected market information through 44 foreign offices and 300 consular offices.
- The section also appointed a trade commissioner in Europe.
- Harvard business school started to offer seminar series in the business and management of the film industry and several other American business schools and universities followed.
- Domestically the film industry was responsible for about 2 percent of overall US.
- The hollywood studios generally broke even on the American market and derived their profits from export revenues.
The 1930's boom and bust
- The arrival of "talkies" in 1928 had a positive effect on British film production.
- Their films were projected in the home market and, unlike the French and German film industries, able to compete with American sound films without the need for dubbing.
- The result was that the industry experienced a boom.
- The most successful British film production company was London Film Productions, founded by an immigrant from Hungary, Alexander Korda.
- By the late 1930s, the boom in British film production came to a sudden end.
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