From the latest issue of Smithsonian magazine:
“[Early] Movie theaters wanted nothing to do with popcorn,” Smith says, “because they were trying to duplicate what was done in real theaters. They had beautiful carpets and rugs and didn’t want popcorn being ground into it.” Movie theaters were trying to appeal to a highbrow clientele, and didn’t want to deal with the distracting trash of concessions–or the distracting noise that snacking during a film would create.
A street vendor in 1912 When films added sound in 1927, the movie theater industry opened itself up to a much wider clientele, since literacy was no longer required to attend films (the titles used by early silent films restricted their audience). By 1930, attendance to movie theaters had reached 90 million per week. Such a huge patronage created larger possibilities for profits–especially since the sound pictures now muffled snacks–but movie theater owners were still hesitant to bring snacks inside of their theaters.The Great Depression presented an excellent opportunity for both movies and popcorn. Looking for a cheap diversion, audiences flocked to the movies. And at 5 to 10 cents a bag, popcorn was a luxury that most people were able to afford. ...Eventually, movie theater owners realized that if they cut out the middleman [the street vendors], their profits would skyrocket. For many theaters, the transition to selling snacks helped save them from the crippling Depression. In the mid-1930s, the movie theater business started to go under. “But those that began serving popcorn and other snacks,” Smith explains, “survived.” ... Eventually, movie theater owners came to understand that concessions were their ticket to higher profits, and installed concession stands in their theaters.World War II further solidified the marriage between popcorn and the movie theaters. Competing snacks like candy and soda suffered from sugar shortages and in turn, rationing, as traditional sugar exporters like the Philippines were cut off from the United States.By 1945, popcorn and the movies were inextricably bound: over half of the popcorn consumed in America was eaten at the movie theaters. Theaters began pushing advertisements for their concessions harder, debuting commercials that played before (and sometimes in the middle of) movies that enticed audiences to check out the snacks in the lobby.
(h/t Kottke)