The Miles Brothers (Harry J., Herbert, Joseph, and Earl C.) were pioneers in American cinema. In 1902, they established the first motion picture exchanges in the United States.[1]
The Miles Brothers’ Exchange, established by Harry and Herbert Miles, proved to be “one of the most important and profitable developments in motion picture history” according to film historian Lewis Jacobs.[2]
Prior to the exchange system, each exhibitor purchased films directly from the filmmakers - a substantial investment. The Miles brothers, who neither made nor showed filmed, bought up films and rented these to exhibitors at one-fourth the purchase price.[3] Lewis writes:
Such a plan was heartily welcomed everywhere. The exchange man could continue to rent out films long after they had more than paid for themselves; his profits were large. Manufacturers now had one large customer who practically guaranteed to buy most of their output at higher prices; and they enjoyed an increased market for pictures because exhibitors, paying less for them, could more frequently change their programs…[4]
Lewis adds that the variety of program offerings, in turn, stimulated attendance, raising profits for exhibitors.[5] Widely adopted, the exchange system introduced by the Miles Brothers led to rivals for the lucrative trade. By 1907, there were over a hundred exchanges operating in major cities throughout the United States.[6]