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The Walt Disney Company recognized that its flagship animation studio's family-friendly films were superbly positioned to conquer the home video market, and through its home video division, Buena Vista Home Entertainment, the company did just that during the 1980s and 1990s. Many harried parents discovered that it was a good investment to pay $20 to purchase a videocassette that could reliably keep their children riveted to the television screen for over an hour—and not just one time, but many, many times. Rather than sell a few thousand units at a wholesale price of $70 into the rental channel, video distributors could sell hundreds of thousands of units at a wholesale price of $15-20 into the retail "sell-through" channel. Therefore, in 1977, Magnetic Video originally priced its videocassettes at $50 to $70 each—a princely sum at a time when the average price of an American movie ticket was $2.23—and sold them only to wholesalers capable of handling a minimum order of $8,000. According to Douglas Gomery, studio executives thought that the handful of consumers actually interested in purchasing videocassettes in order to watch them again and again would be similar to the small community of film buffs who for decades had willingly paid hundreds of dollars to purchase release prints. Film studios and video distributors assumed that the overwhelming majority of consumers would not want to buy prerecorded videocassettes, but would merely rent the


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