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Beltway Confidential

Regulatory robbery: How Hollywood tried to kill the video rental industry at birth

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Beltway Confidential,Movies,Timothy P. Carney

Regulation is often the tool incumbent businesses use to protect existing business models from innovation. The story of Hollywood trying to block video rental stores is a classic in this genre, and Derek Khanna tells it at TechCrunch.

In brief: The content industry sued Sony to ban the Betamax. Industry lobbyists pushed the "Consumer Video Sales Rental Act" to ban the renting of videos purchased commercially. Top Hollywood lobbyist Jack Valenti tried to severely restrict the VCR, telling Congress "I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone."

It's a great story of why politicians and regulators should generally ignore industries running to government asking for protection in the form of regulation -- such as casino magnate Sheldon Adelson trying to curb online gambling and the taxi industry trying to kill limo services like Uber.

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