Old English filmen "membrane, thin skin, foreskin," from West Germanic *filminjan (source also of Old Frisian filmene "skin," Old English fell "hide"), extended from Proto-Germanic *fello(m) "animal hide," from PIE root *pel- (3) "skin, hide."
Sense of "a thin coat of something" is 1570s, extended by 1845 to the coating of chemical gel on photographic plates. By 1895 this also meant the coating plus the paper or celluloid. Hence "a motion picture" (1905); sense of "film-making as a craft or art" is from 1920.