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By the end of the 1930s, the of the passed the Entertainment Tax Act of 1939.

Tamil cinema later had a profound effect on other filmmaking industries of India, establishing Madras (now Chennai) as a secondary hub for Hindi cinema, other South Indian film industries, as well as .

This was due to the fact that electric carbons were used for motion picture projectors. Huffton, founded Peninsular Film Services in Madras and produced some short films for local audiences.

Most of the films screened then were shorts made in the United States and Britain. But soon, hour-long films, which narrated dramatic stories, then known as "drama films", were imported.

A British company imported a Crone , made up of a film projector to which a with a disc containing prerecorded sound was linked, and both were run in unison, producing picture and sound simultaneously. Raghupathy Venkiah Naidu, a successful photographer, took over the equipment after the exhibition and set up a tent cinema near the .

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Its major attraction was the screening of short films accompanied by sound.

Over the last quarter of the 20th century, Tamil films from India established a global presence through distribution to an increasing number of overseas theatres in , Sri Lanka, Malaysia, Japan, the Middle East, parts of Africa, Oceania, Europe, and North America.

The industry also inspired independent filmmaking in populations in Malaysia, Singapore, and the . Hariharan,cheyyar first screened a selection of silent short films at the in .

The first Tamil silent film, , was made by in 1918.

The first talking motion picture, , was a multilingual and was released on 31 October 1931, less than seven months after India's first talking motion picture .

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