Cinema was used primarily as a visual newspaper in the late 1890s and early 1900s, but as mid-decade approached it rapidly became a storytelling form. The shift to longer fictional story films was particularly abrupt at Biograph. In early April 1903 it lost many of its exhibition outlets to Vitagraph. Biograph programs then consisted primarily of brief travel subjects and topicals that were shot in the old 60mm format. Meanwhile Vitagraph, as its catalog "New Vitagraph Features!" indicates, favored American and European story films. Soon Biograph responded by opening a new indoor studio with electric lights, shifting its film production to story films, and switching entirely to a 35mm format. Because Biograph could show the productions of other companies as well as its own exclusive story films, the firm quickly regained many of its old venues.

By the summer of 1904, Biograph had become America's foremost producer. It made at least one story film a month.[42] Many of these films, notably THE ESCAPED LUNATIC and PERSONAL, were "hits" available only to theaters subscribing to Biograph's own exhibition service. Non-Biograph exhibitors desperately sought these subjects, but Biograph insisted on keeping them for its exclusive use. Percival Waters's Kinetograph Company, an exhibition service closely allied to Edison, encouraged the Edison Company to make subjects that were virtually identical. Waters received the first copies, and the films were then sold on the open market and placed in Edison catalogs. Angered Biograph executives sued Edison for copyright infringement but lost because the courts ruled that they had not copyrighted the story as a literary property.[43] While Biograph took these precautions in the future, it also began to sell copies of its new productions to other exhibitors shortly after they were completed.

By late 1904, fictional narratives were the key commodity of the American film industry. Edison, Lubin, and Selig followed Biograph's lead by increasing their production of story films. Pathé had already moved in this direction. After the Edison Company lost its dominant position as a film producer, George Kleine found himself in an awkward position. Although his Kleine Optical Company continued to feature Edison films in its ads and catalogs, his customers wanted films by other producers as well. When he began responding to their demands, the Edison Company retaliated by withdrawing Kleine's special discount and opening a Chicago sales office. Kleine subsequently advertised the films of many different companies in his catalogs and soon became a major importer of European films.[44]

Important changes in distribution occurred as the story film gained the ascendancy. Instead of providing a complete exhibition service of films, projector, and operator to theaters, innovative exhibition companies simply rented films to theaters at a significantly lower cost. In vaudeville, theater electricians were trained as motion picture operators. The theater effectively became the exhibitor, while many old-line exhibition companies essentially became distributors. These companies, which purchased films from the manufacturers and then rented them to theaters, were commonly called "renters" or "exchanges" within the industry. Miles Brothers, with offices in San Francisco and New York City, and Waters's Kinetograph Company were in the forefront of this change. Lubin readily adapted while Vitagraph reluctantly followed. Biograph lost its exhibition contract with the Keith theaters to the Kinetograph Company, and Selig's exhibition service gradually lost customers, particularly to George Spoor's Kindrome exhibition service and to his National Film Renting Company. Neither company was able to establish an effective rental department. The shift in exhibition methods did not take place outside of urban centers. Traveling exhibitors, who generally showed films in small cities and towns, did not need to change their programs frequently and therefore continued to buy prints.[45]


42. Biograph's film production is examined in Paul Spehr, "Filmmaking at the American Mutoscope and Biograph Company 1900-1906," The Quarterly Journal of the Library of Congress 37, no. 3-4 (Summer-Fall 1980): 413-421.
43. Edison's lawyers retained copies of the Edison supplement for September 1904, which advertised the Edison imitation of PERSONAL. A discussion of Edison's activities during this period can be found in David Levy, "Edison Sales Policy and the Continuous Action Film, 1904-1906," in John Fell, ed., Film before Griffith (Berkeley: University of California Press, 1983), 207-222.
44. See the catalog beginning on V-268.
45. Carl Pryluck examines the role of the traveling exhibitor in "The Itinerant Movie Show and the Development of the Film Industry," The Journal of the University Film and Video Association 36, no. 4 (Fall 1983): 11-22. See also Edward Lowry, "Edwin J. Hadley: Traveling Film Exhibitor," in John Fell, ed., Film before Griffith (Berkeley: University of California Press, 1983), 131-143.