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Film distributors frequently speak of 'selling' film to theaters even though films are actually rented on a limited basis. This term is certainly a holdout from the late 19th century when most film subjects were indeed sold outright, sight unseen, to theater owners, or 'exhibitors'. The sold films were not returnable or refundable. Around the turn of the century, a 15-metre reel of film could cost an exhibitor $25.00 to purchase.1 If the print was properly maintained, it could be projected at least 300 times.2 In the event the exhibitor wished to change the bill at his or her nickelodeon, a new film needed to be purchased, and this resulted in scores of exhibitors accumulating large collections of old film reels. Vitagraph's William T. 'Pop' Rock, for example, needed to buy 600 films from the Edison Manufacturing Company to supply his Vitascope Hall in New Orleans between July and October of 1896. At the time of his New Orleans departure in the fall of 1897, Rock sold half his film collection to a group of Texans in exchange for diamonds.3
The notion of renting rather than selling old reels of motion pictures was thought a practical solution by some members of the business as early as the 1890s. In 1896, Norman C. Raff and Frank R. Gammon began renting used Edison films for $10.00 apiece after they took control of Kinetoscope's New York office.4 Percy L. Waters also opened his film rental office (Kinetograph) in New York at this time and became one of the first to rent or lease reels direct to theaters without also providing a projectionist to operate the film equipment.5 Others began imitating this procedure, renting or trading their film inventories with other dealerships or exhibitors. Many exhibitors seemed to prefer trading with one another because to trade with dealerships did not always guarantee high quality pictures in return.6
In any event, these agencies engaging in the practice of renting or trading motion pictures were soon known as film 'exchanges'. In 1900, Nicholas Power, a motion picture projector manufacturer, opened one of the first film businesses in which the word 'exchange' was applied: The New York Film Exchange in the Woods Building at 117 Nassau Street, Manhattan. Although the principal inventory...