An early effort to control movie distribution occurred around 1904, when movie companies provided vaudeville theaters with films and projectors on a film exchange system. In exchange for their short films, shown between live acts, movie producers received a small percentage of the vaudeville ticket-gate receipts. Gradually, as the number of production companies and the popularity of narrative films grew, demand for a distribution system serving national and international markets increased as well. One way Edison’s Trust sought to control distribution was by withholding equipment from companies not willing to pay the Trust’s patent-use fees.

However, as with the production of film, independent film companies looked for other distribution strategies outside of the Trust. Again, Adolph Zukor led the fight, developing block booking distribution. Under this system, to gain access to popular films with big stars like Mary Pickford, exhibitors had to agree to rent new or marginal films with no stars. Zukor would pressure theater operators into taking a hundred movies at a time to get the few Pickford titles they wanted. Such contracts enabled the new studios to test-market new stars without taking much financial risk. Although this practice was eventually outlawed as monopolistic, rising film studios used the tactic effectively to guarantee the success of their films in a competitive marketplace.

Another distribution strategy involved the marketing of American films in Europe. When World War I disrupted the once-powerful European film production industry, only U.S. studios were able to meet the demand for films in Europe. The war marked a turning point and made the United States the leader in the commercial movie business worldwide. After the war, no other nation’s film industry could compete economically with Hollywood. By the mid-1920s, foreign revenue from U.S. films totaled $100 million. Today, Hollywood continues to dominate the world market.