The beginning of the Malayalam films started in 1928 by C.J. Daniel by making his first film "Vigathakumaran." It was the time of silent movies in world cinema. "Vikathakumaran" too was a silent film. Unfortunately with the making of this film, Mr. C.J. Daniel was financially broken. Later one of his relative Shri.Sunderraj took initiative to produce a new film 'MarthandaVarma' based on the famous novel by Sri C.V. Ramanpilla. However, this film got involved in legal fight on copyright. This film also turned out to be another financial catastrophe.

The first Malayalam film with sound track made in 1938 and its name was 'Balan'. Shri T.R Sundaram produced this film for Modern Theatres and directed by Mr. S. Nottani. Main characters in film were by Mr. K. K. Aroor, Mr. Alleppy Vincent, and Smt M. K. Kamalam etc. Shri Muthukulam Raghavan Pillai wrote the screenplay of this film. The film, which based on a stepmother, was a very successful film. This film had made a significant influence on Malayalam film stories for a quite long time. Later the distributors of this film Shymala Pictures produced another Malayalam movie 'Jnanambika'.

At this period, most of the other Indian language films based on Indian epics and mythologies. Malayalam was a different to this. Out of the first five Malayalam films,'Prahalada' (1941) was the only mythological one.

After, Prahalada (1941) the Malayalam Film Industry became quite for next seven years and only in 1948, a new film 'Nirmala' released. This film was produced by Mr.P.J.Charian and directed by Mr. P.V.Krishna Iyer. This film had changed the technology and brought a revolution by bringing the playback system. This is the first time the play back system introduced in a film.

In 1949, Mr. Kunchako built the one time famous 'Udaya Studios' in Alleppey. 'Merryland studios' followed him in 1952 in Trivandrum. Both played an important role in the history of Malayalam cinema.