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Posts Tagged ‘Valenti’

Why VHS didn’t kill the Movie Theatre.

June 24, 2010 1 comment

If you’re a teenager or older, you’ll almost certainly have first-hand experience with VCRs and video tapes. If you don’t remember them, they’re big things that have been replaced by DVR’s, but which you could buy movies on, like with DVDs. They were in most peoples homes throughout the late 80s and the 90s. Yet they were nearly wrestled out of peoples hands around thirty years ago, because of the fear of an industry. Let’s first look back at the late 70s to understand why.

In the late 70s there was a kerfuffle between Sony, and the movie studios. It concerned the BetaMax VCR Sony made (and to a lesser extent the JVC/Phillips VHS system). There were concerns that with these machines, people would undermine advertising (argument A), making the amount that could be charged for them drop, reducing funding for TV stations and networks. It would also mean that movies played on TV would have to cost more for the stations, because people will record them, and keep them, and watch them instead of, say, going to the cinema (Argument B). There were also concerns that since the recorders were mostly made outside the US, the importation of them would hurt the balance of payments (Argument C). Also, making movies is a risky business, and the government should do all it can to make it easier to be profitable (Argument D).  It was nicely summed up by Jack Valenti (head of the MPAA) in his testimony in front of Congress in 1982.
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