Around the time when films just came out, the Midwest — namely, Chicago — was leading the industry and had more movie theaters than any other city in the U.S. including nickelodeons and five-cent theaters. Chicago was the home of the film rental house or the film exchange.

Each year, there were more and more nickelodeons as they were growing from 1905 through World War I, and new film venues continued to open throughout the city and suburbs which played a significant role in commercial development in Chicago until the Great Depression.

The exchanges started a new niche in the industry, which gave exhibitors access (through rentals) to many films so they could afford to purchase more while allowing theaters to frequently change their films.

By 1907 more than 15 film exchanges were operating in Chicago, and they were in control of 80 percent of the film distribution market for the entire United States.

During this time, there were several active film production companies in Chicago and the suburbs where a film producer could make movies.

By 1897, theatrical troupe manager and former magician William Selig were making films and exhibiting them in Chicago.

In 1907, a production facility that covered more than 3 acres was built by the Selig Polyscope Company at the corner of Western Avenue and Irving Park Road that employed more than two hundred people.

Another prominent production company included in Chicago’s facilities was Essanay, founded in 1907, by Gilbert Anderson and George Spoor. Spoor, was a moving picture exhibitor and Anderson, an actor. Together they built the facility in 1908, in Chicago’s Uptown on Argyle Street. Both Gloria Swanson and Charlie Chaplin worked at the Chicago Essanay studio for a time.

Also in 1908, Chicago became the center of attention when the independent movement formed in an effort to import, distribute, and make films while avoiding litigation for patent violations while the use of patents that were held by the trust was ignored. This was due to the organization of the film that took place with an interest in patenting motion pictures.

At the time Carl Laemmle owned an Independent Motion Picture Company located in the city along with several independent antitrust exchanges and importers that were also there. Then in 1912, William Foster‘s, Foster Photoplay Company began producing films.

The films produced and distributed by Chicago companies were gaining in popularity both nationally and internationally when U.S. firms tried to step in and dominate the industry while competing with imported films.

During the silent film era, several “race film” companies were also formed in Chicago, owned by African Americans who were making films for black audiences.

Most of the race film companies in Chicago were profoundly undercapitalized and lacked distribution networks; and therefore, tried to seek out investors, but never actually were able to produce any films.

However, next to begin picture productions in the great city of Chicago, was The Ebony Pictures Company that began production a bit later during World War I and continued for some years after.