Saturday, January 17, 2015

We take for granted that we can watch movies and TV shows at home on our own schedule, but as with many commonplace things, ‘twas not always so. A big hurdle on the way to today’s world of TiVo and Blu-ray wasn’t technological; it was legal. Movie studios were terrified of giving consumers the power to record movies and shows for private use, so much so that they were willing to go to court to stamp out the home video market completely. It was 31 years ago today that the studios lost and home entertainment won, when the Supreme Court ruled in favor of VCRs in Sony v. Universal on January 17, 1984.
At issue was whether Sony, which had released the Betamax video recorder in the 1970s, was infringing on movie studios’ copyright protection by allowing consumers to record movies for their own personal use from TV broadcasts. Sony maintained that this was simply “time-shifting,” allowing people to watch programming on their own schedule and not the TV programmers’. The studios, led by Universal and Disney, weren’t having it, and they took Sony to federal court to block the sale of Betamax recorders.
The case was filed in 1976, and dragged through court for eight years. Sony won in California District Court, but lost on appeal to the Ninth Circuit. Even as the appeals court suggested Sony might be liable for damages to the studios, home video recording sales continued to take off as competition drove down prices. By the time the case reached the Supreme Court, far more homes had VCRs than when the case had begun. Many of the justices were concerned about holding consumers liable for damages for recording a single show or movie for private use. On this date, the high court reversed the Ninth Circuit by a 5-4 vote and held that Sony and other VCR manufacturers had done no provable harm to the studios.
Ironically, market forces ended up flipping the outcome that had been decided in court. Sony walked away a winner, but its Betamax had already seen its market share eroded by the VHS format, which offered longer recording times and ultimately made Betamax obsolete. For the studios, a big loss became a big win. After realizing there was no re-corking the VCR genie, they started releasing their films on video for purchase, opening up a huge new revenue stream.
The only consistent winner in the case was consumers, who had gotten used to the idea of watching what they wanted, when they wanted, and weren’t going to give it up. Formats have changed over the years, and VCRs are museum pieces today. But the idea they represented is very much alive every time you fire up a DVD, check your DVR history, or log into Netflix. You’re in control, and a Supreme Court decision on this date went a long way toward ensuring that.
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