Table of Contents
20th Century Fox was born in 1935 as the result of a merger between two other studios, Twentieth Century Pictures and Fox Film Corp. During this time, the studio mainly made biopics and musicals, with stars such as Betty Grable, Shirley Temple and Alice Faye. But following the end of World War II, fewer and fewer people were attending the theater, mainly as a direct result of television. To compete with the new domestic luxury, the studio began shooting in CinemaScope, a new aspect ratio that gave audiences more picture. Although ticket sales rose for a brief time throughout the 50s and early 60s, attendance numbers slowly began to dip again. Eventually, CinemaScope was replaced with the more efficient and affordable Panavision lens. From the late 60s through the late 70s, they would have some success with sci-fi titles such as Fantastic Voyage and Planet of the Apes (1968), but it wasn’t until Star Wars in 1977 did their success reach new levels.
Up to this point, 20th Century Fox had mainly been a movie studio in the past 42 years and were looking to diversify. They also wanted to compete with HBO, who they had struck an exclusive broadcast deal with and later regretted. In 1975 while looking to the future, they agree to license their catalog to MCA for a format that was still in development, the laserdisc. In the meantime, they do the same with Ken Films, but for a format that had already been on the market for decades – film. Throughout the mid-1970s, they release truncated versions of several Fox titles on Super 8, including the popular Planet of the Apes series and later, Star Wars.
Negotiations between tape duplicator Andre Blay and 20th Century Fox began in 1976. By July of 1977, the deal had closed, with Magnetic Video acquiring 50 Fox titles for $6,000 each. The agreement stipulated that once Blay recouped his $6,000 per title, he would then be required to pay the studio 20% of each subsequent sale.1Pre-recorded History, Andre Blay, p. 72
Blay’s company, Magnetic Video, released the Fox titles on both Betamax and VHS formats that October. This made Fox the first major studio to enter the new home video market. Realizing the tremendous success Magnetic Video was having with their library, Fox wanted exclusive use of their films back, and thus, purchased Magnetic Video for $7,200,000 – only 14 months after the original licensing deal was struck. According to Blay, “I decided to accept the offer from Fox; the opportunity to work with the resource of a large corporation in pursuit of a hot new market and to expand globally was just too enticing. It was not so much about the money; it was about an incredible opportunity to make history.” 2Variety, 1980/02/27, p. 4 The deal made 20th Century Fox the third major studio to have their own home entertainment division (Universal’s Castle Films and Columbia’s Columbia Pictures Cassettes being the other two). Blay remained the CEO of the company under a 5-year employment contract.
In 1981, Blay decided he wanted to leave the company due to a promise that was broken by Fox to not relocate it from Michigan to California. But because of the 5-year employment contract which had a non-compete clause, Blay had to sue Fox to release him from it, which they did.3Pre-recorded History, Blay, p. 156 In January of 1982, Fox announced Magnetic Video would be given a new name – 20th Century Fox Video.4Billboard, 1982/01/23, p. 46 The videos were then given a new logo and new packaging. Later that year, the operational offices were moved to Hollywood while the manufacturing and warehouses remained in Michigan.
Rental Program Controversy
In February of 1982, Fox initiated a rental program for dealers. The decision came about due retailers renting out videocassettes that the studio intended for sale only. But because of the First Sale Doctrine, which gives the owner of a legally purchased piece of media the right to use an item as he sees fit (with the exception of copying for financial gain), Fox and the other studios could not enforce a “sale-only” contract.
The rental program stipulated that a videocassette can be leased from Fox for a six-month period. After which, the title could be re-leased, sold or sent back to Fox to be recirculated at a late date (at the discretion of Fox). The lease for an A-title was $75, and $45 for B-titles. 5Billboard, 1982/03/27, p. 33)
When the rental-only cassette of Star Wars (1977) was released that June, the excitement surrounding it was huge, with retailers selling the video for far beyond the cost of the lease. It was then Fox realized their attempt to control the market had failed, and they eventually phased out the rental program by the end of the year.6 Billboard, 1982/08/28, p. 1
In February of 1982, CBS and Fox announced a partnership to combine their catalogs to bite of larger chunk of the market share. The assets between the two home video divisions was valued at $100 million. 7Variety, 1982/02/17, p. 43 This new deal basically dissolved CBS’s previous arrangement with MGM. The new distribution label launches that July with the new name, CBS/Fox Video.8Back Stage, 1982/06/25 p. 39
In 1995, the division’s name is changed to Twentieth Century Fox Home Entertainment to also include their distribution of video games and other interactive media.9Screen International, 1995/09/15, p. 5
- 1Pre-recorded History, Andre Blay, p. 72
- 2Variety, 1980/02/27, p. 4
- 3Pre-recorded History, Blay, p. 156
- 4Billboard, 1982/01/23, p. 46
- 5Billboard, 1982/03/27, p. 33)
- 6Billboard, 1982/08/28, p. 1
- 7Variety, 1982/02/17, p. 43
- 8Back Stage, 1982/06/25 p. 39
- 9Screen International, 1995/09/15, p. 5