Jail Time for a Mix CD?
For many years, the Recording Industry Association of America (RIAA) and the Motion Picture Association of America (MPAA) have been attempting to override the accepted historical precedents governing the transactions enabling people to enjoy video and music. Dissatisfied with the standard understandings both customers and sellers had established through (as Carl Sagan used to say) billions and billions of sales—understandings that had been repeatedly upheld by the courts—the MPAA, in particular, as led by its now-deceased activist president, Jack Valenti, sought no longer to sell copies of music and video, but rather to license their use to customers.
A Little History
In all industries, there are those who closely analyze how its various participants generate income, with an eye toward positioning themselves as profitable suppliers to those in the chain who appear to be “onto something”—if not usurping their position altogether. Nearly 30 years ago, the phenomenon of VHS and Betamax video rentals made its appearance. A videotape with a purchase price of $60 could be rented from entrepreneurs for a mere $4 or $5 for a couple of nights. Customers reluctant to buy commercial copies of movies were perfectly happy to rent them for less than 10 percent of the typical purchase price. Video stores could rent an average cassette 20-30 times, making a three-times or better return on investment, often within just a few months.
Owing to the creation and existence of the video rental store, a critical sales mass of videocassettes was reached. Were this not the case, moviemakers might well have had to throw the whole otherwise-unprofitable venture into the trash bin of history.
Having learned that the unanticipated rental business was an essential part of a profitable home video viewing business, and potentially far more lucrative than simply making movie cassettes, the movie industry rights-holders determined to bring video rental increasingly under their control.