What if the Supreme Court sided against Sony in the Betamax Case

When home video devices first appeared on the market, Universal Studios and Disney sued Sony over them, claiming that they were illegal because they enabled copyright infringement. The case went to the Supreme Court where the court ruled 5-4 in favor of Sony that home video technology was fair use and not copyright infringement. How would it have affected the entertainment industry if the court sided with Universal and Disney and ruled that the use of VCRs was illegal?
 
This is something explored in this post of That Wacky Redhead.


Brainbin said:
The Supreme Court of the United States ruled that the use of VTR technology which allowed for the recording of existing media by the end consumer, be it through direct transmission or tape duplication, was a violation of copyright and that the availability of such technology (which was, on most VTR machines sold in the United States, simply a “record” button on the control panel) would have to be eliminated. [20] At the same time, the court took pains to confirm that camcorders and VTR recording for commercial and industrial use remained legal, because these resulted in the creation of original content and did not have the potential for copyright violation. Therefore, the sale of VTR players with recording capability was to be tightly restricted, a responsibility which would later be deemed to fall under the purview of the Federal Communications Commission.

Although the verdict technically did not outright ban the existing VHS and Beta formats, their only real edge over the CED and Laserdisc formats had been eliminated. Sony, recognizing when they had been beaten, withdrew Beta from the US market. However, both the Canadian and the Mexican judiciaries would eventually rule that time-shifting was legal, allowing for the emergence of a black market which made acquiring an “old-style” VTR trivial, in an echo of the Prohibition era (to which many critics naturally compared the VTR ruling).

The collapse of the domestic VTR market was treated in many of the trade papers as the culmination of the “new order” having swept the entertainment industry by the mid-1980s, but it seemed the only true constant was change. The time for stagnation, as in most other sectors of the economy, had passed; the new (and surviving) power-brokers, having consolidated their gains and shrugged off their losses, were poised to make new strides in the years, and quite possibly the decades, ahead…
 
How would it have affected the entertainment industry if the court sided with Universal and Disney and ruled that the use of VCRs was illegal?

Money. The studios brought in a shockingly high portion of their revenues from VHS tapes during the 1980s & 1990s (I have a useful book and can look up some more exact figures later today).

So delaying/weakening VCR up-take--as the market buying early VCRs was all about recording--will slow the studio's ability to sell VHS tapes, which in turn means they're making a lot less money compared to OTL. Any boost this gives to LaserDisc will also hurt the studios, fracturing home video user bases and increasing production costs. That said by the 1990s I imagine home video sales back on track.

I'd say the studios may well be more risk averse in the late 1980s then they were IOTL with less cash around, and that's saying something. Share prices will also be down, this could effect Sony/Coca-Cola and Columbia, Universal, other potential buyers, etc....

Lots of fun for a pop culture timeline indeed
 
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