“We Start Industries…”

Friday, September 18 2015
“We Start Industries…”

“Who wants to watch the same film twice?”

It’s the video industry’s equivalent of turning down The Beatles, but when Steve Ayres told his former boss at MGM/UA in the early days of the video industry, back in the early 1980s, that was the reply. It would, he was told, never work.

But Ayres, one of the key figures in helping shape the video industry as we know it today, wasn’t going to let the disbelief of one of the major studios put him off.

He, along with a few others, including senior Woolworths buyer Paddy Toomey, believed that the British public wanted to own films and other genres and would happily build collections based around VHS cassettes.

Unperturbed, Ayres and his boss at the newly formed Video Collection label, released their first range of 50 titles on September 16 1985.

And thus started the journey of a multi-billion pound industry. This week The Raygun spoke to Ayres, who still has his finger in assorted pies in and around the business in the shape of non-executive director roles at the likes of Go Entertain on the 30th anniversary of the creation of what was then known as the sell through business.

He was running MGM/UA in the UK in the early 1980s, but the studio may have had a huge library of titles there was little in the way of new product coming through. In a rental-dominated business, this put the studio at something of a disadvantage.

“I went to my boss in New York,” he recalls, “and said ‘we should be selling these’. People buy and collect books, they buy and collect music, people will do the same with video. He said ‘who wants to watch the same film twice?’”

Ayres was determined to follow through and worked with other distributors such as BBC Enterprises (soon to become BBC Worldwide) and Thorn EMI to put a package of children’s titles for sale in outlets such as `WHSmith and Woolworths.

It worked and the momentum grew. Ayres was approached by Paul Levinson, then at a new company called The Video Collection. “He told me I was playing on the fringes,” says Ayres. “He told me to come and join him and do something meaningful.

Based in a small office in Covent Garden, Ayres and a small team started putting a package of 50 titles, made up of some 30 or 35 feature films, a dozen or so children’s titles and “maybe five music titles”. The films were predominantly from the Republic Pictures catalogue, with The Quiet Man at the fore alongside other assorted John Wayne movies and Doris Day and the likes. Children’s titles included a raft from Hanna Barbera, music included Johnny Mathis and Dionne Warwick. They would retail at £6.99. Up until then, any retail releases would have cost more like £19.99 or £14.99.

“It was a mind-blowing price at the time,” he says now. “There was a lot of industry reaction, the studios told us were were devaluing the business.”

After inking an exclusive deal with Woolworths, more of which in a minute,  some 300,000 titles were shipped to 1,000 stores – the entire estate of the retailer at the time. Each store had one rack, all the same size. “A big store had one rack, a small store had one rack,” laughs Ayres. “It was so unscientific.”

The stores opened at 9am. “By about 11am, we had a phone call, I don’t know how a branch got through to me. They asked if we were the outfit who’d sent these videos.” Ayres stalled, fearing the worst fro the store in Porstmouth. “They said they’d sold out and asked for more. ‘Have you checked there aren’t more there?’ I asked. He told me ‘don’t tell me how to do my job’. I remember the conversation like it was yesterday.

“Within 15 or 30 miutes, the second call came through from another store, it was the same story. Then Edgware Road [Woolies’ flagship London store] called.” says Ayres. The calls kept coming in, it was selling out around the country. As Ayres now says: “The only comparison is being at home on general election night, at 2am watching the results flooding in. And you realise it’s a landslide.”

What he describes as “the joy of being right” was tempered, however. “In 1985, he capacity of the industry was geared to low volume rental, but we needed high volume. Straight away we needed another 1 million units. The racks were empty and the the capacity wasn’t there, even rental was seasonal to an extent. Duplication was full. There was a joy of having a successful launch, but we knew we had a problem.”

Eventually, after much huffing and puffing, thesee problems were resolved. As he notes: “Manufacturing was so difficult that first year. But mmarkets have a way of aligning capacity, and they catered for this new business. We used seven or eight different plants, some in Germany, some in Holland.”

The phrase game-changer is overused in the entertainment business, but this really was that. “Up until then, the biggest selling title had done about 20,000 units. We had titles that were selling hundred of thousands.”

And then the studios came in: “I said to our small team that we had 100 per cent share, but the giants would come in and we’d have a smaller share.

“Our mission was to make sure we had sufficient product flow.”

Ayres and his team set off on a flurry of activity, inking output deals with studios, rights-holders, football teams, the works. As long as the fledgling VCI had product, he knew it would be OK.

“Knew immediately others would want to come in. One or two companies even got in touch to ask ‘how did you do this?’ But having competition wasn’t a bad thing, we knew if a Disney came in, a Warner came in, the market would be bigger.”

Although he welcomed their arrival, he is keen to point out it was the entrepreneurial nature of UK operators that fired the industry. “The studios were very much followers. It was an independent group of entrepreneurs who created the industry.”

He pays tribute to the likes of Toomey (who died in 2011), Levinson and Warren Goldberg, another key figure in the early days of Video Collection. (Ayres and Goldberg are both now involved in what are effectively becoming industry dynasties – the former’s daughter Gabriella works at Spirit with former long-term Video Collection/VCI staffer Robert Callow; Marc Goldberg, Warren’s son, is at the helm of thriving independent operation Signature.)

“Paddy was hugely influential. in this, he ended up coming to work for VCI. From day one he believed it and he really made it happen at Woolies. It was a test and it raised a few eyebrows, but we were pretty confident.”

The exclusivity lasted until 1986 (“I wasn’t flavour of the month with hmv and WHSmith,” laughs Ayres) and the Video Collection went into other stores on February 1 (after a month’s delay due to duplication problems).

From then on it was first after first after first: a rush release of the wedding of Prince Andrew and Sarah Ferguson made it into hmv stores in London on the actual day of the wedding (“we took ads in the Evening Standard, telling people to go into any hmv store in London and have a glass of champagne on us. We did with a VHS cassette what newspapers were doing and ended up in the

Guinness Book of Records”), the first ever stand-up release with Mike Reid (“we put him on Des O’Connor; the next thing, we were selling 200,000 or 300,000 units”). Video Collection floated, was then bought by Kingfisher and eventually became 2entertain as part of a joint venture with Woolworths. When the retail giant collapsed, it reverted back into BBC Worldwide.

These, however, are other stories, for another day.

Let’s go back 30 years ago and the seismic shift in the business brought about by that fateful launch on September 16, 1985.

“At our launch,” Ayres concludes, “Paul Levinson said ‘we don’t start companies, we start industries’. I thought at the time that sounds a bout arrogant. But it was true.”

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