By 1907 cities and towns across the United States and Canada were home to a new site for commercial amusement, the nickelodeon—an inexpensive, unadorned moving picture theater charging a mere five cents per ticket. It is difficult to ascertain when the first nickelodeon appeared. One frequently cited origin is the Nickelodeon theater in Pittsburgh, Pennsylvania, opened in June 1905 by Harry Davis, a local commercial entertainment entrepreneur. Before this date, moving pictures had often been screened in standard entertainment venues: outdoor tent shows; small-town opera houses; and, most notably, vaudeville theaters. Such sites were soon overshadowed by the nickelodeon. New theaters with names like the Bijou Dream and the Gem opened in every region, devoted primarily (though not exclusively) to screening film programs. Even if many of these theaters were short-lived enterprises, the nickelodeon boom unquestionably went a long way toward establishing moving pictures as a key form of commercial entertainment.

One reason for the remarkable jump in the number of moving picture theaters in the years from 1906 to 1909 was the increased availability of narrative film, which could be rented from film exchanges rather than purchased outright. Theaters owners thus had access to a steady stream of new product, which they presented in

Nickelodeons playing Edison Company films.
a continuously run loop throughout the day. Along with a film program that was changed at least three times a week, nickelodeons frequently offered musical accompaniment, as well as "illustrated songs," which were vocal performances of popular tunes illustrated by colorful projected slides.

While certain nickelodeons tried to cater to a "better" clientele, the majority of the new theaters that suddenly appeared in urban downtowns, residential neighborhoods, and the main streets of rural communities made no attempt to compete in size and decor with concert halls or even local opera houses. An empty former retail store, a projector, two hundred or even fewer wooden chairs, a piano, and some sort of ticket booth would suffice to create a nickelodeon. To announce its presence and attract passersby, this new type of commercial showplace often quite literally spilled out onto the sidewalk. A decorated facade, complete with poster displays, drew attention to the venue, as did music that might be directed out toward the street. Typically open during the day and well into the evening, in certain places even on Sundays, the low-overhead nickel theater proved to be more than another faddish get-rich-quick scheme.

Early estimates from the motion picture trade press suggest that by 1910, as many as ten thousand nickelodeons were operating in the United States. As the nickelodeon boom continued, the movies increasingly became woven into the fabric of daily life, especially for workingclass audiences that could take advantage of this accessible and cheap form of public amusement. Heavily dependent on a regular clientele that lived within walking or streetcar distance, the nickelodeon both presented a nationally available product (the movies) and offered a public, social entertainment experience that reflected the tastes of a particular community, neighborhood, or ethnic group.

Competition among theater operators was fierce, as all sought to make what might have initially been a patron's novel experience into a regular habit. From the ranks of nickelodeon operators came a number of men who would eventually shape the motion picture industry, including Marcus Loew (1870–1927) (one of the founders of MGM), William Fox (1879–1952) (founder of Fox studios), and the Warner brothers. In addition, almost immediately nickelodeons faced criticism from religious groups and civil authorities, in part because these cheap theaters attracted audiences that included women and children. Fire was also a very real danger, given the flammability of the 35mm nitrate film then in use. The danger was especially great for the large number of projectionists (or "operators") that the burgeoning industry required. Municipal building and safety codes were instituted to regulate the construction of projection booths, the seating arrangement, and the means of entry and exit. City license fees afforded another form of regulation.

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