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How Hollywood Can Stop Suing Downloaders and Capitalize on Piracy | MIT Technology Review

Jack Valenti, the late president of the Motion Picture Association of America, once warned that a new form of distribution might kill his industry. It would empty theaters and drain studio coffers. Why would anyone venture out to multiplexes when films could be disseminated virtually free and viewed in the convenience of your own home?  Valenti was referring to videocassette recorders, the big boxes rolling out of Japanese factories circa 1980 that could make or play copies of movies at minimal cost. He called them a “parasitical instrument” and told Congress in 1982: “The VCR is to the American film producer and the American public as the Boston ­Strangler is to the woman home alone.” Filmmakers heeded him: Steven Spielberg refused to release E.T. to the home video market for six years. The debate was so fierce that it took a 1984 Supreme Court ruling to guarantee a consumer’s right to record someone else’s intellectual ­property.  Despite Hollywood’s nervousness, box office revenue jumped in the decade of the VCR. It rose from $2.7 billion in 1980 to over $5 billion in 1990, an increase of 16 percent even when adjusting for inflation. Years later, DVDs—the successors to videocassettes—would account for roughly 50 percent of studios’ overall profits. Paramount Pictures executive Barry London observed that the convenience of home video was “re-exposing people to movies who had stopped going.”