Industry Celebrates 25 Years25 Nov, 2002 By: Stephanie Prange
It was 25 years ago this week, on Nov. 26, that a magazine ad launched the video business.
In 1977, shortly after licensing the first Hollywood films for video from Fox, industry pioneer Andre Blay, oft-called “the father of home video,” paid $65,000 to place an ad in TV Guide.
He figured the ad would reach 36 million people via subscription and pass-along readership, Blay said. With only 200,000 VCRs in North America, “the ad was risky,” he said. But his company, Magnetic Video, quickly collected $120,000 in $10 club subscription fees — and that was before selling a single $49.99 tape.
“People were absolutely smitten with the idea that they could buy movies,” he said. “About two-thirds of the club subscribers didn't yet own a VCR.”
The initial collection of 50 Fox films, which included M*A*S*H, Patton and The Sound of Music, cost Magnetic $300,000 to license from Fox, he said.
“It took us two months to pay them back,” he said.
“All of the films were already in television distribution and in syndication,” Steve Roberts, the executive at Fox who licensed the films, recalled. ”My comment to the board was if we could sell to the consumer what they can copy for nothing, we're doing a pretty good job.”
Less than two weeks later retailer George Atkinson, who had seen the TV Guide ad and had bought the tapes, put an ad in The Los Angeles Times announcing the availability of the video titles for rent at his store on Wilshire Boulevard in Los Angeles, where he was renting Super-8 movies and projectors.
Of the rental business he spawned, Atkinson told Video Store Magazine in December 1999, “My only regret is that I couldn't patent it.”
While Blay, the guy who sold the tapes to Atkinson, believed — and still believes — sellthrough is best because “people like to build libraries,” today he admits, “rental built the business.”