Home Video: Almost Never Was

I was just looking back and thinking…

blockbuster-futureIn 1977, the first video rental shop opened. It was in Los Angeles. Despite having a unique business plan, the revolutionary store was an tremendous success, growing to 40 stores in fewer than two years and generating lots of competition.
The success brought on the development of an completely new industry: home video.  It inspired the creation of BlockBuster, HollyWood Video and a countless numbers of mom and pop video shops across the land.   It would become an $19 billion dollar market in the U.S. alone, and, instead of cannibalizing the existing movie house market, it would surpass it and thereby become a enormous earnings base for the industry.

With the benefit of today’s hide-sight is easy to see how this was a new opportunity of the movie industry. But the Motion Picture industry didn’t see it that way.

The motion picture industry lobbyists and lawyers tried to stop the home video market through litigation and regulation. Here are the wise words of Jack Valenti, president of the Motion Picture Association of America in 1982:

We are going to bleed and hemorrhage, unless this Congress at least protects [our industry against the VCR]. . .we cannot live in a marketplace. . . where there is one unleashed animal [the VCR] in that marketplace, unlicensed. It would no longer be a marketplace; it would be a kind of a jungle, where this one unlicensed instrument is capable of devouring all that people had invested in…

After an initial hearing, the justices took a vote internally, and originally only one was persuaded to keep the VCR legal (but after discussion, the number of justices in support of the VCR would eventually increase to four).

Such a close vote. Its mind-boggling to think how things would have unfolded if the vote turned the other way. A 18 billon dollar market with BlockBuster and Netflix would never have been born. And how about streaming online video now? Would streaming video ever come to light?

See the origin of mx123.com.