Perhaps you don\’t quite remember this event. But back in 1982, the videocassette recorder was just about about to wipe out the movie industry, and probably also the television industry. We know this is true because of the April 12, 1982, Congressional testimony from Jack Valenti, then the President of the Motion Picture Association of America, given in hearings before the House of Representatives, Committee on the Judiciary, Subcommittee on Courts, Civil Liberties, and the Administration of Justice.
Valenti was arguing in favor of a bill that would allow a charge to be imposed on all makers of VCRs and blank videotapes, most of which were at that time made by Japanese firms, with the proceeds to be distributed to the U.S. film and television industry. If you need a reminder to be skeptical when business leaders prophecy doom and gloom if their industry has to adapt to new technology, here\’s a sample of the rhetoric from Valenti. It\’s a minor classic in the genre of special interest pleading, in which an industry is about to experience worse than a tidal wave, worse than an avalanche, but indeed a jungle, where it will hemorrhage and bleed and be strangled–but the industry\’s real concern, as we all know, is that it just wants to protect the old and the poor and the sick.
I am merely coming to start off by talking about the American film and television industry, not as an economic enterprise, but as a great national asset to this country, to the U.S. Treasury and the strength of the American dollar. And I am not just talking on behalf of people whose names are household words, like Clint Eastwood and some of his small band of peers. I am speaking on behalf, as he is, as he will no doubt tell you on behalf of hundreds of thousands of men and women who without public knowledge or recognition, who are not besieged by fans, but who are artisans, craftsmen, carpenters, bricklayers, all kinds of people, who work in this industry, not only in this State but in the 50 States where American films are shot on location. And they deserve no less, Mr. Chairman, than the concern of the Congress for the preservation of their industry. . . .
But now we are facing a very new and a very troubling assault on our fiscal security, on our very economic life and we are facing it from a thing called the video cassette recorder and its necessary companion called the blank tape. And it is like a great tidal wave just off the shore. This video cassette recorder and the blank tape threaten profoundly the life-sustaining protection, I guess you would call it, on which copyright owners depend, on which film people depend, on which television people depend and it is called copyright. …
Because unless the Congress recognizes the rights of creative property owners as owners of private property, that this property that we exhibit in theaters, once it leaves the post-theatrical markets, it is going to be so eroded in value by the use of these unlicensed machines, that the whole valuable asset is going to be blighted. In the opinion of many of the people in this room and outside of this room, blighted, beyond all recognition. It is a piece of sardonic irony that this asset, which unlike steel or silicon chips or motor cars or electronics of all kinds — a piece of sardonic irony that while the Japanese are unable to duplicate the American films by a flank assault, they can destroy it by this video cassette recorder. . . .
Now, I don\’t have to tell anybody in politics — I have spent most of my adult life in politics and you learn one thing. Nothing of value is free. It is very easy, Mr. Chairman, to convince people that it is in their best interest to give away somebody else\’s property for nothing, but even the most guileless among us know that this is a cave of illusion where commonsense is lured and then quietly strangled. That is what it is all about. Now, these machines are advertised for one purpose in life. Their only single mission, their primary mission is to copy copyrighted material that belongs to other people. . . .
The permission of the copyright owner is required for the use of their programs in all markets. Now, I those markets include theaters, cable, pay cable, pay television, prerecorded cassettes, network television, syndicated television, video discs. Every one of those markets is going to be competing for Mr. Eastwood\’s new film \”Firefox.\” They are going to license that film at a negotiated price. Now, we cannot live in a marketplace, Mr. Chairman — you simply cannot live in a marketplace, where there is one unleashed animal in that marketplace, unlicensed. It would no longer be a marketplace; it would be a kind of a jungle, where this one unlicensed instrument is capable of devouring all that people had invested in and labored over and brought forth as a film or a television program, and, in short, laying waste to the orderly distribution of this product. . . .
This is more than a tidal wave. It is more than an avalanche. It is here. If those aftermarkets are decimated, shrunken, collapsed because of what I am going to be explaining to you in a minute, because of the fact that the VCR is stripping those things clean, those markets clean of our profit potential, you are going to have devastation in this marketplace. . . . We are going to bleed and bleed and hemorrhage, unless this Congress at least protects one industry that is able to retrieve a surplus balance of trade and whose total future depends on its protection from the savagery and the ravages of this machine. . . .
I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone. …
Movies are the single most recorded program type accounting for approximately 30 percent of all the recorded minutes. Now, what I am about to read you now boggles my mind and it is going to boggle the mind of everybody in the movie and television business in this city. If 56 of the 93 movies recordings made by the 250 households during the first 3 days of a diary week — just 56 of those movies are saved for the shelf and for additional playback — then the number of movies collected in a year by the Nation\’s 2.4 million VCR households, only 2.4 million, the number of movies collected would be 6,537,216. At a prerecorded purchase of $50, they would have a retail value of $3.2 billion.
Mr. Chairman, things like that could make a grown men cry. . . .
By 1990, the Japanese estimate that 30 to 35 million U.S. homes will be equipped with VCR\’s. VCR owners will buy about 225 million or 300 million blank tapes. But, and here is an explosive political fact, Mr. Chairman, two-thirds of U.S. households will not own VCR\’s, Mr. Chairman. One-third of VCR households will not be on cable or won\’t have access to cable. Now, if there is a scarcity of film and television entertainment, it won\’t be the well-groomed and the well-heeled that will suffer. It is going to be, as always it is, Mr. Chairman, the less-affluent, the disadvantaged people pressed against the wall, out of work, who can\’t afford these expensive machines, and free television to the sick and the old and the poor will remain the primary source of home entertainment. . . .The loser will be your public because they don\’t have these expensive machines. And that is what I am saying, sir. The public is the loser when creative property is taken and here is the reason why. The investment of hundreds of millions of dollars each year to produce quality programs to theaters and television will surely decline. …
Mr. Chairman, I am done. The public interest is at stake here. It is the public interest that you have by solemn oath sworn to serve because what I am talking about and what the rest of these witnesses are talking about is making it possible for a steady stream of quality entertainment to reach people through their television sets and to keep the incentive and reward mechanism in line so that people can risk great sums of money in this very dicey forum. That is what is at stake, and, finally, the preservation of a huge and valuable trade asset that can\’t be duplicated by any country in the world.