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'Home Media Magazine' at 35: The 10 Biggest Stories That Shaped the Industry

27 Oct, 2014 By: Stephanie Prange

Thirty-six years ago, Andre Blay kickstarted the home video industry by licensing 50 films from 20th Century Fox and releasing them on videocassette so consumers could watch the movies they wanted to see when and where they wanted to.

Thirty-five years ago, Stuart Karl founded what was then Video Store Magazine in the garage of his Orange County, Calif., home, giving the fledgling home video industry its very own trade publication. Karl would later rise to fame for launching the Jane Fonda fitness videos, a genre that continues to be a big part of the business today, both on disc and digitally.

Cassettes are long gone, as are many of the independent mom-and-pop rental shops that nursed the business. So, too, are archaic metrics such as “turns per copy” and “copy depth.”

But the home entertainment industry — and our magazine — are both very much alive, having evolved with changing consumer habits and, of course, technological advances.

So as we celebrate our 35th anniversary, we thought we’d take a look back at the business we have covered almost since Day 1 and present to you what our editors consider the top 10 stories that shaped the industry — our industry.

1. Andre Blay gives birth to the home entertainment business by licensing 50 films from 20th Century Fox and releasing them on videocassette. While many of the films and TV shows distributed to the home today are on different formats, either disc or digital, Blay’s foresight about consumers’ desire to watch the entertainment they want when they want it was groundbreaking.

2. The passing of the First Sale Doctrine, which solidified retailers’ right to rent, allowed the home video industry to grow and prosper, helped pave the way for the rise of Netflix, and is still the basis upon which kiosk operator Redbox builds it business model today.

3. The rise of the public video chains, which have since died out, not only grew the industry, but also triggered changes in the way the business operates. Those changes, such as revenue-sharing between content owners and retailers, continue to be a part of the business even as digital delivery expands. It is also interesting to note that Netflix CEO Reed Hastings often credits a late fee from a major video store chain as his light-bulb moment for starting Netflix.

4. The launch of DVD turned consumers from movie renters into movie collectors and established big retail chains such as Walmart and Target as destinations for entertainment purchases. The business model grew with Blu-ray Disc and digital collections through Digital Copy, UltraViolet and Disney Movies Anywhere, but it all started with DVD, still credited as one of the most successful product launches ever.

5. The demise of the independent video rental store made the business more corporate, paving the way for direct deals both with major retailers such as Blockbuster and Walmart and digital behemoths such as Amazon, Netflix and others.

6. Sellthrough’s explosive growth between 2001 and 2004 made home entertainment a big part of studio financial reporting and planning as the revenue from DVD eclipsed theatrical. Potential revenue from DVD became part of the equation that greenlighted movies. The studios continue to look to sellthrough to underpin their bottom lines and push electronic sellthrough, recently branded Digital HD, as the new way to get consumers to buy content.

7. Rental’s transition to subscription streaming has been a transformative business model in the digital realm, spearheaded by Netflix. Others, such as Amazon Prime and Hulu, also have caught on to the growth in subscription streaming as it continues to be an economical way for consumers to watch the most content for the lowest price.

8. Digital delivery of content, not just by Netflix and others that deliver professionally produced movie and TV shows, has transformed content itself. YouTube clips and YouTube stars are drawing young viewers from that professionally produced content and creating an entirely new form of entertainment — as well as a pantheon of new talent.

9. Studios’ distaste for rental is a story that began with the fight over the First Sale Doctrine and continues through content owners’ interest in windowing content to rental outlets such as Redbox and Netflix.

10. Netflix, which began as a mail-order DVD service, continues to disrupt all forms of entertainment from TV shows to theatrical films by producing original content. Others, such as Amazon Prime, have followed.

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