In 1925, Sam Warner of Warner Bros., then a small Hollywood studio with big ambitions, saw a demonstration of the Western Electric sound-on-disc system and was sufficiently impressed to persuade his brothers to agree to experiment with using this system at New York City's Vitagraph Studios, which they had recently purchased. The tests were convincing to the Warner Brothers, if not to the executives of some other picture companies who witnessed them. Consequently, in April 1926 the Western Electric Company entered into a contract with Warner Brothers and W. J. Rich, a financier, giving them an exclusive license for recording and reproducing sound pictures under the Western Electric system. To exploit this license the Vitaphone Corporation was organized with Samuel L. Warner as its president.