Harry Allen was teaching English for a living when he and his wife Connie decided to open a video store in a Sacramento shopping center. He saw it as a part-time thing. "It started out as her venture -- it was going to be our second income," says Allen. "In two weeks we were in the black. In about six months the store was making a lot more than I was as a college teacher, and I could see the writing on the wall."
That was 1982. The Allens have two stores now, and he has taken an indefinite leave from his job at Sierra Community College. "It's heresy for somebody with an English background to say," he says, "but I don't think that writing right now is the major way for people to inform themselves . . . I enjoyed teaching, but . . ." The thought trails off into the unspeakable zone of cost-benefit analysis. "You know, though," he says, "they could put my English class on videotape."
The cold facts:
The home videocassette recorder, as we know it today, made its first appearance on American shores in the spring of 1976. In 1980 2.7 percent of America's TV households had one; in 1981, 4.3 percent did; in '82, 5.9 percent; in '83, 9.8 percent; in '84, 17.7 percent. That figure should reach 30 percent by the end of the current year, and the gross revenues from the sale and rental of prerecorded videocassettes in 1985 should come to about $3.3 billion -- only half a billion dollars less than the gross revenues of the theatrical movie business.
"We're catching the big daddy!" says George Atkinson, a founding father of the video rental business who opened his first store in West Los Angeles at the end of 1977 and has since moved over to the manufacturing end of the business. "And that's at 25-percent penetration. From there, you can just extrapolate. It's frighteningly beautiful!"
"Cable, schmable!" Atkinson declares. "What we have is the most superior delivery system known to man. It's a ritual and a fun thing to go into the store. It's a 180-degree turn from the tyranny of past television history. In the old days it used to be the man who came in. It was 90 percent male. Then the females started coming in after a year or two. Now it's almost equal. Then you saw the teen-agers and now you see the toddlers. Kids drag their parents to a video store. You're seeing the Children of Video. I see kids saying, 'Mommy! Mommy! I want that one!' and their mommies are saying, 'Let's rent a Fred Astaire.' It cuts across the generations. It's here to stay! It's not a fad."
Six thousand Children of Video have descended on the Sheraton Washington and the Shoreham Americana hotels for the annual convention of the Video Software Dealers Association, a body that had 200 members three years ago and now has 2,000. You will hear no talk of federal deficits in these halls, no cries of alarm about the balance of trade and the shrinkage of the manufacturing sector, and, for sure, no tirades against the Japanese, who have built virtually all the VCRs sold in the United States to date (although many carry such all-American labels as RCA, Zenith and General Electric). The nation's video dealers are in the left-hand lane of the economy, scooting past the smashups and the slowdowns at such a high speed that they don't even have time to rubberneck.
Five years ago many of them were factory workers, police officers, hair stylists, homemakers, bureaucrats, contractors and penniless immigrants. Now they are the proud owners of Video Places, Patches, Palaces, Corners, Connections, Castles, Sources, Stations, Shacks, Sheds, Spots, Huts and Hutches. When they get together to talk, Jane Fonda comes to listen, and so do Joan Collins, Lena Horne, Charlton Heston, Don Novello, Bonnie Franklin, Lou Ferrigno, Bubba Smith, Shari Lewis, Linda Blair and the Gobots.
On Tuesday night, Paramount Pictures treated the dealers to a "Star-Spangled Picnic" on the Washington Monument Grounds, with a menu featuring Marinated Breast of Chicken Kabob; Peony Blossom Salad; cellophane noodles with cucumbers, shrimp, radishes, prosciutto, sweet pepper and tangy lime dressing; Jumbo Calamato Olives; Apricot Scones with Virginia Sugar Cured Ham and Honey Mustard; and Ruby Driscoll Strawberries in White and Dark Chocolate. A tent that looked about 200 feet long was set up for an affair that lasted barely an hour. Then the dealers trooped off to a concert at Constitution Hall in their honor.
Jane Fonda made her "Jane Fonda's Workout" videocassette three years ago. "The dream," she says, "was to do what the previous best seller had done -- which was to sell 30,000 videocassettes. Now it's sold 890,000." And it has spun off four sequels, including the "New Workout," which Fonda unveiled at the Sheraton on Sunday afternoon. Even Fonda herself is spurred on to greater exertions by her videocassettes. "While I was shooting 'Agnes of God' I used the 'Challenge' tape, the original 'Workout' and the 'New Workout,' " she says. "It makes me laugh. When I'm doing them it's not like it's me. It's this person that I really hate. I'm shouting at her."
The "Workout" cassettes have a quality much envied in the video business these days. They have "repeatability," which means that customers will buy them (for $39.95 apiece) rather than rent them (for $2 to $5 a turn). The Hollywood studios have expressed a good deal of dissatisfaction with their share of the revenues from the rental portion of the home video business -- which accounts for more than 90 percent of the transactions -- and with the retailers' zeal in pursuing sales. For the time being the movie industry has dropped its campaign to get Congress to amend the copyright act to allow for a two-tiered market -- in which retailers would pay more for rental cassettes than for sale cassettes. But selling has become the cause-of-the-moment with the studios and their fellow suppliers, and it is the VSDA's theme ("Sellabration '85") for this year's convention.
On Monday the dealers were treated to a pep talk on the subject from an actor got up in full World War II general's regalia complete with swagger stick, and looking like the reincarnation of George S. Patton (or, perhaps, George C. Scott as George S. Patton). With dry ice pumping the smoke of battle across the stage of the Sheraton Washington Ballroom and strobe lights simulating a shower of artillery, the general (portrayed by Simon Wilder of Cambray, Calif.) spoke of the need to "protect your flank against those hairy gorilla bastards -- the price cutters and the mass merchandisers.
"You don't win this war by losing a sale," he intoned. "You win this war by making the other fellow across the street lose his sale . . . Now you dealers, you infantrymen, you've got to be ready -- ready to stick it to 'em with well-stocked merchandise, with a well-lit, clean marketing environment . . . We cannot be satisfied with territory already won . . . Victory won't come easy. It never does. You're going to gave to grind it out a yard at a time, a release at a time, a sale at a time." Anyone who found his words amusing, he added, would be shipped to the Yukon to sell RCA videodiscs to the Eskimos "igloo-to-igloo."
Austin Furst, one of the convention's two keynote speakers, took up the same theme. "The consumer doesn't know that he can buy," and that knowledge must be "spoon-fed" to him, Furst said.
Furst launched himself into the video business in 1982 by buying the rights to the Time-Life film library. A year later, his company, Vestron Video, distributed a documentary called "Making Michael Jackson's 'Thriller,' " which went on to sell in quantities rivaled only by the Fonda series. Along the way, Vestron, based in Stamford, Conn., has emerged as the most successful producer of prerecorded cassettes outside of Hollywood, and this week the Vestron people were ballyhooing a line of "Video Gifts" -- titles selected, packaged, and priced for sale -- with the slogan, "Even if you don't own a VCR, you know someone who does."
But many of the retailers in attendance were skeptical. The typical movie sells for $60 to $80, and the retailers contend that the manufacturer's notion of an attractive discount is at variance with the public's. "We were at one meeting," Connie Allen recalled, "where people from Thorn/EMI and Disney were saying, 'You mean that your customers won't buy at $39.95?' 'That's right!' I told them." Her customers, she said, wouldn't be likely to invest more than $19.95 in a cassette, and even at that price a title would have to have plenty of "repeatability." Exercise tapes, children's tapes, music videos, sports and the "Trekkie" and "Star Wars" movies meet the criteria, according to the Allens.
The retailers shuttled back and forth among seminars on such topics as "Managing Your Stress," "Theft Loss Is Profit Loss" and "Adult Video and Preservation of First Amendment Rights: How the Video Retailer Copes." At the last-named, a lawyer well-versed in the field warned that politicians and prosecutors are prone to launch campaigns against sexually oriented videocassettes to camouflage their other problems. "Miami this year is now the murder capital of the world," he said. "So we are expecting record numbers of obscenity prosecutions in Miami."
Linda Lauer, an Arizona dealer, advised her colleagues to forswear the use of overly suggestive posters and displays in store windows, while another dealer complained that the packaging of adult videocassettes was getting too flagrant. "Some of the manufacturers have gone wild," he said. But still another retailer reported that stores in his area had been prosecuted although "it was all conducted in a very wholesome manner."
Movies -- above all, hit movies -- are still the engine that drives the home video business. But a number of upstarts and interlopers were at the convention peddling "how-to" tapes, children's programs and other properties with which they hoped to corner a share of the market.
Esquire magazine unveiled a line of "Esquire Success" tapes. Two of the first offerings are "Career Strategies 1" and "Career Strategies 2," which promise to teach "young achievers" all about "developing managerial skills," "establishing a power base" and "knowing when to challenge the system." Other titles include "Persuasive Speaking," "The Short-Order Gourmet" and "The Wine Advisor." Each features a "video essay" by Dick Cavett.
Young professionals are "brand-name-oriented, and they have no alternative in the video field," Phillip Moffitt, the president and editor in chief of Esquire, explained at a press conference on Sunday. "No one," he said, "and I mean absolutely no one, has established a brand-name label for this particular audience."
On a smaller scale, Avalanche Productions of San Francisco has come out with "The Pet Rock Video," a music video in which the singing is done (ostensibly) by a dimple-marked slab of granite.
Arlene Winnick, a fledgling video producer based on Long Island, was at the convention with a lineup that included "Video Bingo" and "Videotrivia." She described the latter as "a perfect rental item," explaining, "People come into the store and say, 'What will we do tonight? Oh, well, let's play trivia.' " Winnick was not particularly impressed with the "Pet Rock Video" -- "I couldn't believe it when I heard about it!" she said -- and the "Esquire Success" tapes didn't wow her either. "But they'll get a few yuppie lists and they'll do well. Everyone has their own little niche and there's plenty of room in this business. As long as I get my niche, I don't care."