A Brief History of
Fall 1975 – The Sony Betamax goes on
sale in the U.S. The LV-1901 console, consisting of a SL-6200
video cassette recorder (VCR) and a 19" Sony Trinitron
television set, retails for $2,495. A table-top recorder/player
deck (the SL-7200) is marketed the following spring for $1,400.
(Sony stopped offering the Betamax VCR as a consumer product
in the U.S. in 1993 and ceased production of the device altogether
October 1977 – RCA begins selling the
first VCR in the U.S. based on JVC’s “video home
system” (VHS). Manufactured by Matsushita and branded
as “SelectaVision,” the VBT200 retails for $1,000.
November 1977 – Magnetic Video, operating
as Video Club of America, is the first company to provide theatrical
motion pictures on home video. Company founder Andre Blay convinced
Twentieth Century-Fox to license him 50 titles for sale directly
to consumers. The cost of the license was $300,000. Video Club
of America marketed itself through a two-page ad in the November
26-December 2, 1977 edition of TV Guide (pages 48-49). The titles,
which were available in both the Betamax and VHS formats, included
Butch Cassidy And The Sundance Kid, Hello, Dolly!, M*A*S*H,
Patton, The French Connection, The King And I, and The Sound
Of Music. The videos are supposed to be for home use only, and
not for rental. Membership in the club was $10.00 and the price
of the videos was $49.95 each. Blay recoups his initial investment
in just two months.
December 1977 – George Atkinson launches
the first video rental store, a 600-square foot storefront at
12011 Wilshire Boulevard in Los Angeles. Atkinson was the proprietor
of Home Theater Systems, a company that rented Super 8 movies
and projectors for parties. He bought one Betamax and one VHS
copy of each of the Magnetic Video titles through a third-party
for $3.00 over cost. Atkinson announced the availability of
the Fox titles for rent in a one-column-inch ad in the December
7, 1977 Los Angeles Times. (Previously, he had advertised “Video
for Rent” – although he didn’t have any videos.)
In order to raise capital, Atkinson charges $50 for an “annual
membership,” $100 for a “lifetime membership,”
which provides the opportunity to rent the videos for $10 a
day. Atkinson is threatened with a lawsuit for renting the videos,
but quickly discovers that U.S. copyright law gives him the
right to rent and resell videos he owns.
September 1979 – George Atkinson announces
that, after growing into 42 affiliated stores in less than 20
months, he would change the name of his business from Video
Cassette Rentals to The Video Station and would begin franchising
November 1979 – Columbia Pictures enters
the home video market, releasing 20 films.
December 1979 – Fotomat began a nationwide
rollout of videocassette rentals at its 3,700 outlets. Consumers
could chose from 131 titles, which they could order over the
phone for pick-up the following day.
December 1980 – Walt Disney Productions
announces that it would enter the home video market. It proposes
the first “authorized rental” plan to retailers,
under which a retailer could pay a flat fee for a cassette and
have the right to rent it as many times as possible for 13 weeks.
Sellthrough units could be purchased separately.
1980 – Pioneer introduces the laserdisc
for the home video market.
January 1981 – Columbia Pictures attempts
to impose two-tier pricing for video, with red videocassettes
for rental and black for sale and retailer contracts obligating
them to abide by the rental and sale restrictions.
November 1981 – The Video Software Dealers
Association (VSDA) is formed as a trade association for video
retailers. The major item on the new organization’s agenda
is preserving the right under U.S. copyright law of video stores
to rent movies.
November 1981 – The Board of Directors
of Magnetic Video Corp. removes Andre Blay as its president.
March 1982 – Magnetic Video Corp. changes
its name to 20th Century Fox Video.
March 1982 – Legislation is introduced
in the United States Senate to give copyright holders the exclusive
right to authorize the rental of prerecorded videos, essentially
allowing the motion picture studios to prevent video stores
from renting movies.
Summer 1982 – Paramount Home Entertainment announces
that Star Trek II: The Wrath of Khan would be priced at $39.95,
the first major theatrical title to be priced for sale directly
October 21, 1983 – Video stores around
the country close down for several hours on this Friday to draw
attention to threats to the public’s right to rent videos,
including legislation before the Congress to exempt videos from
the First Sale Doctrine.
1983 – George Atkinson resigns as president
of The Video Station after it is revealed that the company had
overstated its net worth by approximately $1 million the prior
1983 – VCRs are in less than 10% of U.S.
January 1984 – The United States Supreme
Court issues its groundbreaking decision in the Sony Corp. v.
Universal City Studios, Inc. case, which affirms the rights
of consumers to videotape television programs for “time-shifting”
purposes. By ruling that Sony was not guilty of “contributory
copyright infringement” for enabling consumers to record
programs, the court legitimizes the VCR and set the stage for
the widespread adoption of the device.
February 1984 – After being reintroduced
in Congress in 1983, the legislation to give copyright holders
the exclusive right to authorize the rental of prerecorded videos
dies in the face of fierce objections from VSDA-member video
retailers and their customers. The right of consumers to rent
prerecorded videos from a video store is never seriously questioned
July 1984 – The Video Station has 500
1984 – The Sony Betamax hits its peak,
with 2.3 million units manufactured worldwide.
June 1985 – The Cotton Club is the first
video released with Macrovision anti-copying technology.
1985 – The first Blockbuster Video store
opens, in Dallas, Texas.
1985 – Movie Gallery is formed in Dothan,
Alabama, and starts operating video stores in southern Alabama
and the Florida panhandle.
1985 – 11 million VCRs are sold in the
U.S., bringing its penetration to almost 30% of American TV
1985 – In the first year for which statistics
are available, video rental spending totals $2.55 billion and
the number of turns is 1.1 billion (a “turn” is
the rental of one video). The average rental price is $2.38.
October 1988 – Mark Wattles opens the
first Hollywood Video store, in Portland, Oregon. Hollywood
Video would eventually become the number two chain in America,
with 2006 stores in 47 states and the District of Columbia before
being acquired by Movie Gallery in 2005.
November 5, 1988 – The Video Privacy
Protection Act is signed into law. This federal law protects
renters and purchasers of videos from having information about
which videos they rented or purchased disclosed to third parties
except in limited circumstances.
December 1988 – Blockbuster became the
top video retailer in the U.S., with $200 million in revenue
in 1988. It had more than 500 stores by the end of the year.
Blockbuster replaced Erol’s in the top spot.
1989 – Blockbuster expands outside the
U.S. and passes the 1,000-store mark.
1990 – Blockbuster acquires Erol’s,
the third-largest video retailer, and ends the year with more
than 1,500 stores.
August 1993 – Hollywood Video, which
had 17 stores, goes public.
1993 – Sony releases the last Betamax
VCR (the SL-HF2000) to be offered in the U.S.
August 1994 – Movie Gallery completes
an initial public offering, which gives it capital to develop
and acquire additional stores, primarily in smaller towns and
cities in the Southeast. From the beginning to 1994 to mid-1996,
Movie Gallery would grow from 73 to more than 850 stores.
1994 – Blockbuster is acquired by Viacom.
March 3, 1995 – The Lion King is released
on home video. It sells 32 million copies on VHS and DVD over
the years, making it the best-selling video of all time.
July 1995 – Amazon.com goes online from
the garage of founder Jeff Bezo. Initially, it limits its merchandise
March 1997 – DVD is introduced in the
U.S., and the DVD player soon becomes the most rapidly adopted
consumer electronics product in history.
April 1998 – Netflix launches the world’s
first online DVD rental service, offering more than 900 titles.
November 1998 – Amazon.com opens its
virtual video store, with more than 60,000 theatrical and general-interest
videos and more than 2,000 DVDs.
August 1999 – Blockbuster goes public.
December 1999 – Netflix introduces online
DVD rental using a subscription model.
1999 – Amazon.com is ranked as the number
one online retailer of video and DVD, a position that it retains
to this day.
2000 – Movie Gallery reaches 1,000 stores.
2000 – Video sell-through revenue totals
$8.3 billion, surpassing theatrical box office ($7.7 billion)
for the first time.
August 28, 2002 – Sony announces that
by the end of the year it would cease manufacturing the Betamax,
which had only been available in Japan since 1998. A total of
18 million units were manufactured worldwide during its 27-year
November 2002 – MovieLink launches its
Internet video-on-demand service.
February 2003 – Netflix surpasses 1 million
March 16, 2003 – DVD rentals generated
more revenue than VHS rentals during the preceding week, marking
the first time that weekly DVD rental revenues exceeded VHS
rental revenues. For the week ending March 16, 2003, U.S. DVD
rentals generated $80 million in revenue, and VHS rentals yielded
$78 million, according to VSDA VidTrac. The milestone occurred
six years to the month after the launch of the DVD format in
June 15, 2003 – For the first time ever,
more DVDs were rented during the week than VHS videocassettes.
According to VSDA VidTrac, 28.2 million DVDs were rented during
the week ending June 15, 2003, while 27.3 million VHS cassettes
2003 – Wal-Mart/San’s Club tops
Blockbuster in U.S. video revenues, marking the first time that
a sellthrough retailer was the market leader.
2003 – Movie Gallery expands to all 50
states and reaches 2,000 stores, making it the second-largest
video specialty retailer in the U.S. in terms of store count.
2003 – Annual DVD rental revenue exceeds
VHS rental revenue for the first time. Consumers spent $4.38
billion renting DVDs and $3.82 billion renting VHS cassettes
during the year.
2004 – Viacom divests itself of Blockbuster.
2004 – Annual DVD rental turns exceed
VHS rental turns for the first time. DVD saw 1.75 billion rental
turns, which VHS rental turns were 842 million.