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Thomas Edison and William Dickson developed the Kinetoscope, a machine which showed moving images (this developed into a Kinetoscope parlor, the forerunner to the movie theater). The parlor was a huge success and people began to realize that this new technology would reach a wider audience if there was a way to lengthen these films and project the images onto walls. As the films grew longer, filmmakers began to add plot, characters, and even special effects. From here, a group of actors, composers, and writers formed the Film D'Art as a means to develop and produce these artistic pursuits.

Source(s)

Flashback: A Brief History of Film