By 1912, major motion-picture companies had set up production near or in Los Angeles. In the early 1900s, most motion picture patents were held by Thomas Edison's Motion Picture Patents Company in New Jersey, and filmmakers were often sued to stop their productions.

Director D.W. Griffith was the first to make a motion picture in Hollywood. His 17 minute short film In Old California (1910) was filmed for the Biograph Company. Although Hollywood banned movie theaters –of which it had none- before annexation that year, Los Angeles had no such restriction. The first film by a Hollywood studio, Nestor Motion Picture Company, was shot on October 26, 1911. The Whitley home was used as its set, and the unnamed movie was filmed in the middle of their groves at the corner of Whitley Avenue and Hollywood Boulevard. The first studio in Hollywood, the Nestor Company, was established by the New Jersey-based Centaur Company in a roadhouse at 6121 Sunset Boulevard (the corner of Gower) in October 1911. Four major film companies –Paramount, Warner Bros, RKO, and Columbia- had studios in Hollywood, as did several minor companies and rental studios. In the 1920s, Hollywood was the fifth largest industry in the nation. Hollywood became known as Tinseltown because of the glittering image of the movie industry. Hollywood has since become a major center for film study in the United States.