1980 - 1989

A History of Home Video and Video Game Retailing

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.

1981 – Tower Records begins testing video rentals.

March 1982 – Magnetic Video Corp. changes its name to 20th Century Fox Video.

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 to consumers.

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.

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 fiscal year.

1983 – VCRs are in less than 10% of U.S. TV households.

1983 – Babbage's, a retailer of computer and video game software opens in Dallas. Through a series of mergers and acquisitions, it will eventually become GameStop.

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 again.

July 1984 – The Video Station has 500 stores.

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.

October 1985 – Former Texas oilman David P. Cook opens the first Blockbuster Videos store, in Dallas, Texas. (The "s" was later dropped from "Videos".)

October 18, 1985 – Nintendo releases the Nintendo Entertainment System, an 8-bit video game console, in the U.S. market. The company simultaneously released 18 titles, including Super Mario Bros. The innovative system and games reinvent the video game market, and Super Mario Bros., with more than 40 million units sold, becomes the best-selling video game of all time.

October 29, 1985 – "Pinocchio" is the first release in Disney's "animated classics" home video series. Initially priced for the rental market at $79.95, the title was subsequently repriced to $29.95. Backed by a then-record $7 million marketing campaign, "Pinocchio" sells 1.7 million units.

1985 – Movie Gallery is formed in Dothan, Alabama, and starts operating video stores in southern Alabama and the Florida panhandle.

1985 – Hastings Books & Music opens its first "triple combo" store in Amarillo, Texas, adding video rentals to its traditional merchandise.

1985 – 11 million VCRs are sold in the U.S., bringing its penetration to almost 30% of American TV households.

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. Video sales revenue totaled $773 million.

1986 – Paramount Pictures, a mall-based retailer of movies and movie memorabilia, opens its first store. In 1988, Paramount would change its name to Suncoast Motion Picture Company.

1986 – For the first time, combined video rentals and sales eclipsed box office revenues for the year. Rental revenue in 1986 was $3.37 billion and sales revenue that year was $1.01 billion, for a total of $4.38 billion. Theatrical box office was $3.78 billion in 1986.

February 1987 – H. Wayne Huizenga, a Florida industrialist, acquires a 60% stake in the 19-store Blockbuster chain. 

April 1987 – Founder David Cook exits Blockbuster.

June 1987 – Blockbuster becomes increases its store count to 67 and becomes one of the top 10 video rental chains with its acquisition of the 28-store Movies To Go.

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.

1988 – Rentrak Corporation pioneers revenue sharing for video rentals. Rentrak acquires video cassettes from motion picture studios and other suppliers and then leases the cassettes to video rental stores for an upfront handling fee and a portion of the rental revenues, which are shared with the product suppliers. Revenue sharing lowers the cost of goods for rental stores, allowing them to bring in more copies to satisfy consumer demand.

1988 – For the first time, annual video rental revenues exceed theatrical box office receipts. Video rental spending was $5.15 billion in 1988 and box office was $4.46 billion.

1989 – Blockbuster expands outside the U.S. and passes the 1,000-store mark.

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