The film process may first have been created by Louis Le Prince, working in New York City, who patented his process for "the successive production... of objects in motion... by means of a projector" in 1886. But while travelling to Paris to demonstrate his process in 1892 he vanished.
The first commercially developed process was by Thomas Alva Edison's employee William Kennedy Laurie Dickson, who first demonstrated his Kinetoscope in March 1891. The first public display of this process took place on May 20 1891 to members of the National Federation of Women's Clubs. Dickinson left Edison Co. in 1895 and Edison himself claimed all credit for the process. People were paying to view Kinetoscope films by April 1894. The Kinetoscope was a powerful viewing experience but a private one, meant for an individual or perhaps a family.
The quality of the films shown in New York and Berlin was extremely poor and used processes that had no lasting impact on film technology. The 'true' debut of the motion picture is therefore usually dated to December 28 1895 in Paris, where at the Grand Cafe in Boulevard des Capucines the Lumiere brothers had their first paying audience.
Commercially successful color process dates from 1906 when George Albert Smith produced a two-color system using panchromatic stock in Brighton for Charles Urban Trading Co. as Kinemacolor. The first public presentation was not until February 1909 in London, when a series of twenty short films by the Natural Colour Kinematograph Company was shown at the Palace Theatre in Shaftesbury Avenue. However there were a number of problems with Kinemacolor and colour stock cannot be regarded as a commercial reality until 1932 with the Technicolor three-colour process.
Synchronized sound was first demonstrated in 1900 at the Paris Exposition with a separate sound-on-disc system. Sound-on-film was first patented in 1906 by Eugene Lauste in London, although the system was not really successful until 1910 with the words "J'entends très bien maintenant". A completed projector project was stymied by the outbreak of war and it was not until September 1922 that the process was demonstrated to an invited audience in Berlin. Yet again it was in New York in April 1923 that people first paid.
The first (reasonably) permanent cinema was the Vitascope Hall in New Orleans. It opened in June 1896. Admission was 10 cents. The first important purpose-built cinema was the Gaumont Film Company's Gaumont-Palace in Paris, which opened in 1910 and could seat 5,000 people.
Soon, the French concept of movies being shown in theaters became the dominant model, and entrepreneurs scurried to build impressive movie houses all across North America and Europe.
The shift that occurred in the 1980s from seeing movies in a theater to watching videos on a VCR, is a move quite close to the original idea of Thomas Edison. In the early part of that decade, the movie studios tried legal action to ban home ownership of VCRs as a violation of copyright which proved unsuccessful. However, that proved most fortituous as the sale and rental of their films on home video became a significant source of revenue for the film companies.
Film is now (2001) in the process of making another transition, from physical film stock to digital cinema technology, driven by the availability of low cost data storage and high-resolution digital displays.