Home video rentals

Short-term rentals of films to be viewed at home, initially in the form of prerecorded videocassettes

Small stores began renting videocassettes, and sometimes the equipment on which to play them, in the 1980s. The rentals made it affordable for Americans to watch—and control the playback of—full, uncut motion pictures on their own televisions at home, significantly changing US movie-viewing habits and forcing Hollywood to modify its filmmaking and marketing practices. However, the rental industry in turn faced major disruption with the rise of the internet, especially as online streaming services proliferated in the late 2000s and shifted the very nature of home video.

The development of the videocassette recorder (VCR) dates back to the 1950s, when an inventor named Charles Ginsburg began leading a research team at the Ampex Corporation. Two years before his death, Ginsburg would be inducted into the National Inventors Hall of Fame for "one of the most significant technological advances to affect broadcasting and program production since the beginning of television itself." The VCR became available to the public in the 1970s and 1980s.

Movie studios at first resisted the VCR, as they had resisted television some three decades earlier. Congress debated a number of bills attempting to regulate public use of VCRs, but it failed to pass any of them. An appeals court initially ruled against Sony’s use of VCRs to record movies, but in 1984 the US Supreme Court reversed that decision on the grounds that home recording fell under "fair use" copyright provisions.

Developing the Marketplace

At first, two different videocassette standards competed for consumers’ dollars, JVC’s VHS and Sony’s Betamax, or Beta, format. Betamax dominated at first, but VHS eventually took over the market. In addition, video discs sought a share of the prerecorded film marketplace. Most of the early VCRs were manufactured in Japan; the video disc was created in the United States. Initially VCRs were expensive, costing in the range of $1,000, and so were prerecorded movies. They were seen in the early 1980s as luxury items. It was more economical for home viewers to rent both the player and the videocassette from small neighborhood stores that sprang up in communities throughout the United States and Canada. The rented devices usually only played prerecorded tapes; they generally did not offer renters the option of recording other programming from television.

In 1977, a Detroit, Michigan, businessman named Andre Blay obtained permission from Twentieth Century-Fox to sell on videocassette fifty films from the studio’s library through the Video Club of America. Few people owned VCRs at that time, but some nine thousand consumers joined the club. The Video Club of America may have constituted the initial impetus for the development of the video rental industry. It was the first corporation to release movies on VHS, and it soon expanded and acquired imitators. Seeing its success, Twentieth Century-Fox bought Blay’s video company and, in 1982, reorganized it as Twentieth Century-Fox Video. Later that year, Fox merged its video operations with CBS Video Enterprises.

It was possible to purchase prerecorded videocassettes rather than renting them, but they, too, were prohibitively expensive—often costing one hundred dollars or more. Given those costs, it made more sense for most people to pay around five dollars to rent a video and a player for a limited period—ranging from overnight to a few days—than it did for them to buy their own tapes and players.

Video rental stores would sell their renters a membership, which had to be purchased before any movies could be taken home. Some rental stores were independently owned and operated; others, like Video Stop and Adventureland Video, were franchised. The stock of available movie titles often varied from one store to another.

In the 1980s, hardly any of the rental video players came with a remote control. A viewer had to move to the VCR to turn the player on or off or to stop or pause the tape. The earliest so-called remote control was physically connected by a plug-in wire to the front of the VCR. Even then, such devices were generally available only to purchasers, rather than renters, of VCRs. The movie and television industries encouraged consumers to rent rather than buy videos during much of the 1980s.

Another factor affecting the rise of video rentals was that, by the mid-1980s, television viewers paying for cable or other viewing packages were becoming dissatisfied with the viewing options provided by commercial television. This dissatisfaction coincided with a gradual decrease in the price of VCRs to the point where many families could afford to buy one. Just as gradually, the mom-and-pop video stores found it less necessary to rent VCRs to their customers and began simply to rent the videocassettes themselves. By 1983, most of the movie studios had dropped their attempts to license their movies on video and began instead to sell videotapes to both rental stores and home users with their own VCRs. By the mid-1980s, rental outlets had become so widespread that increasing numbers of customers felt the lower prices justified their own purchase of a home VCR, which also steadily declined in price.

One of the first movies to significantly exploit the new demand for videocassettes was Lady and the Tramp, a popular 1955 Walt Disney animated film focusing on the adventures of a pampered pooch (Lady) and a roving mongrel (Tramp). Walt Disney Productions released the movie on video in 1987 at a price of $29.95 and, by 1988, had sold 3.2 million copies—a record that would last until the video of E.T.: The Extra-Terrestrial sold some 14 million copies by 1993.

Rapid Change in Home Video

After becoming widespread in the 1980s, home video rentals surged in popularity in the 1990s as technology improved and dropped in price. Major nationwide video rental stores, most prominently Blockbuster, took over a large percentage of the market and saw huge profits. By the late 1990s, VCR and VHS technology had begun to be replaced by digital versatile discs (DVDs). This led to a major shift in the consumer experience of home video, though the rental format initially remained similar. However, the simultaneous rise of the internet soon posed a challenge to the brick-and-mortar video store business model. Notably, in 1999 the company Netflix began offering consumers mail-order rentals of DVDs for a flat fee using an online ordering process. Within a few years the company had millions of subscribers.

As Netflix and similar services rapidly grew, they detracted directly from the market share of traditional video rental stores. Competitors such as Blockbuster adopted their own mail-order services, but soon yet another challenge had developed: streaming video. By the mid-2000s high-speed broadband internet service was available to more people than ever before, and this and other technological improvements made it easier to distribute video content directly over the internet. Netflix again became a leader of this new business model, offering unlimited streaming of content on its website for a flat monthly fee beginning in 2007. Other notable subscription streaming services that developed included Hulu and Amazon's Prime service.

The market for rentals of individual films also evolved. One major development was technology company Apple's 2008 introduction of digital video rentals through its highly popular iTunes media platform. This allowed consumers to access a relatively large library of films without leaving home or paying an ongoing subscription fee. Renting physical copies of DVDs (or later formats, such as Blu-ray) remained a factor, but self-service kiosks such as those operated by Redbox increasingly took the place of video stores. Mail-order services, while eventually less popular than streaming, remained popular among film buffs who felt they provided a larger selection of titles. Both large chain and independent video rental stores continued to decline in the face of such competition. For example, Blockbuster declared bankruptcy in 2010 and closed many locations; by the end of July 2018 there was only one remaining store, in Bend, Oregon.

Impact

In a relatively short span of time, the home video rental business had a major cultural and economic impact even as it evolved considerably. By the late 1980s, the industry had given rise to both a diverse array of small mom-and-pop stores and huge video rental chains such as Blockbuster. These establishments would play a significant part in the entertainment culture of the 1980s and 90s. Meanwhile, video rentals soon accounted for a significant portion of a motion picture’s total revenue, and Hollywood began to plan for rental revenues in setting the budgets of films. Moreover, the studios began to modify the format of their films in anticipation of the home rental market, because theatrical widescreen films would not fit unmodified on television screens.

With home consumption of video content a cultural mainstay by the late 1990s, the market helped drive the adoption of technology such as DVDs and Blu-ray. The video rental business also adapted to the all-pervasive influence of the internet, radically reinventing itself for streaming video. By the 2010s, "home" video rentals (and similar content available through subscription services) could be delivered by various platforms directly to mobile devices such as laptops and smartphones as well as televisions, computers, and video game systems. This shift toward near-constant accessibility drastically shaped the way films and other video content is consumed.

Bibliography

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Campisi, Jessica, and Samira Said. "America Has Just One Blockbuster Left." CNN, 13 July 2018, www.cnn.com/2018/07/13/us/last-blockbuster-america-trnd/index.html. Accessed 2 Aug. 2018.

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Jackson, Aurelia. Netflix: How Reed Hastings Changed the Way We Watch Movies and TV. Broomall: Mason Crest, 2015. Print.

Levy, Mark R., ed. The VCR Age: Home Video and Mass Communication. Newbury Park, Calif.: Sage, 1989. Focuses on patterns of home video use.

Levy, Mark R., and Barrie Gunter. Home Video and the Changing Nature of the Television Audience. London: Libbey, 1988. Explains how recording devices altered film and television viewing habits.

Lyman, Peter. Canada’s Video Revolution: Pay-TV, Home Video, and Beyond. Toronto: J. Lorimer/Canadian Institute for Economic Policy, 1983. Catalogs changes in communications technologies at the start of the 1980’s and their effects on Canadian society.

The Video Age: Television Technology and Applications in the 1980’s. White Plains, N.Y.: Knowledge Industry, 1982. Overview of devices such as the VCR.

Wasko, Janet. Hollywood in the Information Age: Beyond the Silver Screen. Austin: University of Texas Press, 1995. Analyzes the effects of new technologies on film marketing and distribution.