THE RISE OF VIDEO IN THE PERTH CONTEXT

James Mairata

The penetration of Video Cassette Recorders (VCRs) in this country has been - to say the least - phenomenal. Projected sales of VCRs within Australia show that by the end of the year, between 40% and 50% of Australian homes will possess a video recorder, making Australia easily the world leader in its acceptance of the video machine. This statistic is especially interesting when compared to that of the United States, where it is estimated VCR penetration is at about only 18%. The availability of cable and satellite television in the US is a likely reason for the lessened impact of the video recorder there - the kind of competition it does not have here in Australia yet.

This paper gives an overview of the rise of the VCR predominantly within a Perth context. It will examine some areas which the VCR has affected (cinema, broadcast television) and it will look at the kind of technological infrastructure (principally in the form of the video 'library') that has developed out of video recorder technology.

Video recorders using the present VHS and Beta cassettes first appeared on the Perth market in about mid 1979. There had been other machines before this. Philips had some time earlier introduced a machine which took only a Philips cassette while Sony had also made machines using three quarter inch tape. These seem to have been used in educational contexts and then primarily for the time shifting of broadcast TV viewing. The early VHS and Beta machines were decidedly primitive in the features they offered when compared to today's machines. These machines used mechanical push down control keys and most cassettes only ran for an hour. Features like fast forward and reverse scanning, frame by frame pausing, memory record programming and remote control were simply non-existent on these machines. Despite this, the novelty of a new technology and the appearance of film titles on video cassette made the machines big sellers. So much so that retailers were not able to meet the demand for some time. These machines were also expensive. Prices began at about $700.00 and increased in some cases to double this as retailers took advantage of the great demand by charging buyers inflated prices.

By contrast, video recorders complete with all of the operating features mentioned now sell for under $400.00. The continual updating of models and improvements such as stereo video have made video recorders even more appealing as a purchase. Machine rental is also now well organised making video technology more readily accessible than ever before.

Cassettes, too, were in short supply during this early period. The new longer 3-hour blank cassettes were fetching between twenty and thirty dollars at the time of their introduction. The earliest manufacturers of VHS and Beta machines were Sony, Sanyo, National and JVC (with JVC manufacturing machines for other brands like Akai, AWA and Thorn). There were a number of other problems with these early models. Those, for instance, who had bought the earlier Philips machines now found they were unable to buy cassettes as Philips had abandoned these machines in favour of the VHS format. Problems with television compatibility were also common as only Philips video recorders, for example, would play on Philips TV sets. It was possible to buy an adaptor but Philips charged a modification fee. In addition to this, many early video machines werc compatible only with TV sets able to receive a UHF signal. As Perth stations use only the VHF band, TV sets sold here generally incorporated only the ability to receive this band. Consumers found that they either had to buy a television set which could receive both frequencies, or buy a video recorder which used VHF. As JVC and National were able to introduce their VHS machines before Sony produced their Beta models, they were able to flood the Australian market (and particularly in WA) with VHS models giving them an early domination of the video market. Sony were slow to introduce their machines principally because they viewed the Australian market as being of little potential and their early estimates saw Australia as comprising only 1% of Sony's world market. It seems that this is the most likely explanation for Beta - in Perth particularly - having only a 30% share of the video market when compared to 40% and 50% shares in other world markets.

The Emergence of the Video Library

By early 1981, the two video cassette formats - VHS and Beta - were well established. To meet the growing demand for film titles available on video cassette, video libraries began to appear in Perth suburbs. The existence of these libraries indicated that video recorders were being used extensively for film viewing. One of the first to set up an outlet selling film titles on video was Bob Lassom. He opened a library early in 1981 in Rivervale and found that there was a strong demand for video rentals. Conditions of rental were much stricter than they are presently. Early libraries charged joining fees and/or in some cases life memberships, both of which were designed to help cover the cost of the video shop's purchase prices of new titles. Little government regulation of the video libraries saw a number of marginal and fly-by-night businesses set up, charge hefty membership fees and then vanish altogether. Concern by video shop owners at the extent of these practices led a number to form the video association of Western Australia in 1982. One video shop owner involved with this association is Michael Brock. He has served three terms as its president and is now its secretary. According to him, the most important functions of the association lie with its consultative capacity with the state government and its 'watchdog' function with the police force in matters ranging from legislation affecting the video industry to the establishment of an industry which seeks to offer a measure of professionalism and hence credibility in its dealings with the public. The Association has somewhere between 300 and 400 members though the present size of the video library industry in this state is not known because of the number of delicatessens, petrol stations and newsagencies which also rent video titles. In addition to this, the picture is further complicated by the knowledge that membership with the association is not compulsory.

The Operation of Video Libraries

The growth of suburban video libraries in the past four years is reminiscent of the suburban cinema boom which occurred during the late 1920s and 30s. Virtually all video libraries in Perth are run by the people who own them and in the vast majority of cases this ownership is confined to a single outlet. Video distributors do not themselves control libraries in Perth, preferring instead to sell titles to the suburban outlets. Until recently - about the last twelve months - libraries would charge a joining fee of something like $10.00 which entitled one to a life membership at that library. On top of this, hiring of titles range in price from between $2.00 and $4.00 each per night, depending on whether the title is a new release or not. Many libraries no longer charge a joining fee because of the greater competition that a large number of libraries now exerts upon the video cassette hire market.

Another indication that video libraries may have reached a saturation level is the number of libraries which have closed recently. In the metropolitan area alone in the last six months, Intervideo have closed five outlets, Douglas Hi Fi have closed a shop in Victoria Park, Video Atrium have closed in Rivervale along with a number of others. Whereas before there had been a steady growth in the number of outlets, this trend appears to have been reversed leaving the more established libraries with large memberships to cope with a stablilising demand. The rationalisation now occurring within the industry is further reflected in the small number of supermarket-style libraries which are beginning to appear. One such library is in East Victoria Park. 'Video 3000' carries over 4000 titles and displays them in a large showroom. This library is the product of an amalgamation of a number of small libraries from the eastern states and a great part of its business is taken up with title distribution and secondhand sales. The size of this library can be gauged by the example of one recent video release - The Killing Fields. Video 3000 stocked 21 copies of this title for hire (17 VHS, 4 Beta), where most libraries take perhaps a total of 5 or 6 titles in both formats. On one occasion that I visited this library - a Saturday evening - every one of the 21 copies was out on rental.

Rental Habits

Renting behaviour seems to be similar to cinema viewing. Members of video libraries are interested just come from cinema runs. Old titles, videos only a few months old, even if past cinema successes, rent infrequently. The rental life of a new video release - if popular at the cinema - generally runs at about 6 weeks (or approximately 60 runs), after this, the rental frequency declines dramatically. The attrition rate in terms of exhausted titles is truly staggering. One wholesaler/distributor - Hollywood Films - (50% owned by the Hoyts group and based in Sydney) occasionally takes as many as 500 traded-in titles from Perth video libraries in one day. Hollywood films either sell these 'exhausted' titles directly to the public (from their outlet in South Perth), or to the smaller video libraries attached to delicat~ssens and service stations. Fears that the Australian video market would be used as a dumping ground by overseas distributors seems justified. The shelves at Hollywood Films have hundreds of obscure titles which earn little rental revenue for video libraries and serve only to drive up the costs of operating a library. Films which do not gain a cinema run and are instead released directly onto video also - almost without exception - suffer from poor rental. Distributors manage to off-load these titles by offering them in a package with a proven cinema release title. Both this aggressive marketing by distributors and a revised system of taxing have contributed towards rationalising the numbers of video libraries operating.

The Rising Cost of Video Titles

Whilst the cost of blank tapes and video recorders have been decreasing, the cost of video titles has been steadily increasing. Bob Lassom recalls that when he began his video library, titles could be purchased for around $50.00, while the 'blockbuster' films were about $70.00. Titles now cost around $100.00 and Lassom blames excessive government taxing as the major reason for the increase. As he points out, for every video cassette there are taxes applied to the cover, the labels, the cassette and the tape. To add to this, the mini budget before the tax summit saw the introduction of a tax on the royalties taken from each video cassette which lifted the price of a video title by approximately $10.00. Then there was the redefining of the sales tax on videos so that the tax is applied to the last point of the distribution chain - the consignment agent - who then sells the title to the video shop owner with the sales tax added. This government move caused a shake up in distribution. Distributors now sought to deal direct with the video library owners. This circumvented the necessity of further adding to the sales tax calculations by removing the agents from the distribution chain. Now, distributors like Roadshow, Columbia-Hoyts and CEL all have video offices in Perth.

The nett effect of these taxes has been to reduce the number of new titles video libraries purchase. This has reduced the range of titles that small libraries in comparison to larger libraries can offer, and has contributed to library closures. A recent exception to the increasing prices of titles has been the latest CEL releases which are selling to the public at approximately $20.00. CEL have been able to do this through high volume sales and marketing. Their releases are available in supermarkets and record shops - traditional areas of high turnover. Michael Brock feels that CEL may have misread the video title market. He thinks that even at this low price people will rent these same titles in preference to owning them. Certainly this has so far been the case.

VCRs and Broadcast Television

There has been much discussion as to the way VCRs have altered broadcast television viewing. VCRs function as time shifting devices in regard to television programs. People tend to record programs which they would otherwise miss due to other commitments or a desire to view something on another channel. Commercial television stations especially have been concerned at the potential of the video recorder for avoiding advertising, possible simply by fast forwarding a recorded programme. In addition to this, traditional rivalry between stations in programming arrangements (e.g. the Sunday night movie) may need to be reorganised in light of the possibility of watching one program on one channel while recording the rival program on the other channel. So, too, the traditional effectiveness of a 'blockbuster' movie in capturing ratings is now lessened by the knowledge that the title to be screened has probably long been available at the nearest video library. However, the debate over how the video recorder has altered broadcast television viewing seems only minor when compared to that which has taken place concerning the video recorder's influence on the cinema.

Video Recorders and the Cinema

Some say that video will spell the end of the cinema. The reality is not quite so drastic. The WA manager of Hoyts' theatres, Max Reddin, sees video exerting less influence upon the cinema than it did a year ago. He pinpoints February 1984 as the point at which video did markedly affect national cinema attendances. Through his contact with the management of 'Ace' and 'City' theatres, Reddin established that overall cinema attendances in Perth had fallen by about 40% (this reflected the national figure). Since then, cinema companies have attempted to arrest this decline by doing a number of surveys aimed at pinpointing why people were no longer attending cinema sessions. Although these surveys revealed a number of problem areas - like the price of a movie ticket and the preference of screenings without shorts - video was seen as the most influential culprit. In an effort to bring people back to the cinema, Hoyts successfully introduced half- price sessions on Tuesdays. Hoyts have found, however, that this move has attracted a different audience to that of the regular cinemagoer.

According to Max Reddin, 80% of regular cinema audiences are under the age of 25 and an interesting link with video lies in the behaviour of the audience during screenings. Reddin has noticed that cinemagoers are much noisier during screenings than they used to be. This leads him to speculate that audiences now duplicate their video watching habits in the cinema.

Just as the cinema survived radio and television, it is recovering from video. In May of this year, Hoyts noticed that cinema attendances were again increasing. By August of this year, attendance figures are now only down 20% on the same periods before the decline. Cinema groups believe that this recovery is a long term one. Indeed, a number of new multi-million dollar cinema complexes are being constructed in the eastern states. Hoyts will open a multi cinema complex in Surfers Paradise this November while Greater Union are building a complex in Sydney and the Village group are also building a complex in Melbourne.

One interesting theory about the recovery of the cinema's popularity is that video's has decreased somewhat. Certainly much of the worthwhile video releases have been exhausted - video has lost its novelty value and now people are returning to the cinema to reappreciate the obvious advantages of a large screen and lively atmosphere. Nevertheless, cinema has not entirely recovered from the impact of video. Video seems to have well and truly killed the drive-in theatre as only a handful survive in the metropolitan area, and almost none in country areas. Nor have the cinema groups ignored video. Hoyts, for instance, realising its potential as a profitable industry, have become involved in its distribution. As Reddin points out, video distribution involves less financial risk than a cinema release. Simultaneous release of a 35mm print in a large number of cinemas is very expensive at the level of paying for the prints and in publicity costs as opposed to the copying of a master video tape which is very much cheaper.

VCRs and the Future

Video cassette recorders are suffering from rapid technological obsolescence as advances in technology are constantly making previous models redundant. If stereo video is the most recent of these changes, 8mm video appears to be the next major change. Rod Benness of Gibson- Benness - the state distributor of Sony Video 8 - believes that video 8 will eventually replace the current l/2 inch video formats within the next three years. He points to its superior picture quality and its 6-track audio facility - all on a tiny metal tape - as its selling points. As well as this, cassette size has been standardised this time, avoiding the problem of multiple l/2 inch cassette systems. According to Benness, demand for the Video 8 cameras has already outstripped supply (and a separate Video 8 VCR will be available after Christmas). Knowledge that a number of large manufacturers have taken up the Video 8 technology - including the giant Kodak company - raises the question of whether the days of 1/2 inch video are almost over. It begs the question: How will the vast number of video libraries and consumers cope with a change in cassette format?

For their help in preparing this article I would like to thank Max Reddin of Hoyts, Michael Brock of the WA Video Association, Rod Benness of Gibson- Benness, Don Moran and Bob Lassom. Although all are busypeople, they willingly made their time available for interviews. The views expressed, however, are my own.