It took a huge gamble and the overcoming of a lot of industry cynicism for Paramount to try something very different with the home release of Star Trek II: The Wrath Of Khan.

“Video sales will probably never overtake video rentals”, mused Premiere magazine back in the summer of 1989. It was part of an article looking at how “a small but significant minority” of film fans who were building up collections of their own. Not renting their tapes, but buying them and keeping a library of films of their own. It’d surely never catch on.

And yet in the late 1980s, it still wasn’t. A statistic in the same issue revealed that 64% of VCR owners in the States had no plans to buy videos, and were happy renting them. 18% meanwhile both bought and rented videos, and 4% were only buying them. No idea where the other 14% went either.

The argument – as put forward by the article – was that “rentals dominate the video market” partly “because few movies bear repeat viewing”. As such, when it came to release films on video, studios priced their tapes at a level that only rental shops could realistically afford – $80-100 US, around the equivalent of £65-80 – and sell-through titles were thin on the ground. When they did appear, they tended to be of older, classic movies, rather than high profile releases.

Until Paramount had a brainwave.

The studio had already gone leftfield when it came to selling merchandising licenses for 1979’s Star Trek: The Motion Picture, putting on a huge show for them involving the Trek cast and a laser effects show.

When it came to promoting Star Trek II: The Wrath Of Khan, it went lateral again. The studio was interested in testing whether consumers would stump up to actually own a tape rather than rent it, and the first guinea pig was an episode of Star Trek by the name of ‘Space Seed’. I’m indebted to the official Star Trek website for the fact that this episode was billed on its cover as ‘the episode that inspired Star Trek II: The Wrath Of Khan’, and that it was sold that overtly.

A few weeks after the new Trek movie arrived in cinemas, then, Paramount issued the episode on tape to buy. The first ever episode of the show released directly to consumers to buy. Paramount watched the sales figures with interest, and the numbers soared.

But it was the precursor for the main event. Paramount had been toying with releasing one of its features at a more affordable price, and Star Trek II was to be it.

It thus opted to price the movie at $39.99 on both VHS and the superior Betamax format, still just north of £30 but this was still a technology in its relative infancy too. It backed the release with a hefty advertising campaign, both to consumers and to the trade press. In the case of the latter, the studio knew it needed video stockists on side, and that there was a sizeable risk in trying to convert renters into buyers. It produced special retailer promotions and pushed the release hard, but still there was real cynicism aimed at the studio. Some of the industry were convinced the idea was doomed to failure.

The studio won its gamble handsomely.

Paramount reportedly needed to sell around 60,000 tapes to make a profit on its – ahem – enterprise, and it was very much in uncharted waters. Yet it  shifted around 120,000 copies of the tape in that first run, doubling expectations, and igniting a slow but certain change in the industry. The studio wouldn’t quickly capitalise on it, but gradually, more and more companies opened their eyes to the idea of selling retail-priced videos.

That said, Paramount’s vice president Hollace Brown noted at the end of the 1980s that “we were the only ones out there for several years”. He wasn’t wrong. Whilst catalogue titles were growing, big new movies going direct to sell-through were thin on the ground. Paramount released Raiders Of The Lost Ark on video to buy not long after, and shifted a million copies. Beverly Hills Cop followed in 1985, and Top Gun too was a huge sell-through hit in 1987 for instance.

Others eventually woke up. Universal and Disney followed suit, and E.T. The Extra Terrestrial was another major breakthrough title. Studios would, though, cling in some cases to the rental model until the late 1990s, and it was DVD that ultimately saw it off.

But it was the success of The Wrath Of Khan that lit the metaphorical touchpaper for what we now see as commonplace in the physical media industry. As Paramount wrote in a trade ad, “we gave you a recent blockbuster picture at a blockbuster price. We were told it was risky but we wanted to turn rentals into sales. It has succeeded and we thank you for your part in this marketing breakthrough”.

It would still take a little longer for the market to turn, and the culture of people owning copies of films to fully catch on, and it’s telling that nearly a decade after The Wrath Of Khan’s release, it was still very much the exception rather than the norm. The prediction was that by 1993, video sales would still only account for a quarter of the market. But by the end of that decade, it’d actually account for the lion’s share.

And is was the Enterprise that got it all started…

See also:
The videos that went straight to buy in the UK in the 80s and 90s.
Remembering the Britannia movie club: buy four videos, pay for one

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