After the VCR was introduced to the American mass market in the mid-1970s, the home entertainment options for many Americans were greatly expanded. In combination with the emergence of cable television and satellite, the VCR initially seemed to pose a substantial threat to the dominance of network television and movie theaters. The VCR not only enables viewers to rent movies that they can watch comfortably in their own homes, it also allows them to record programs from television, allowing greater flexibility in terms of viewing schedules. Renting videos is less expensive than the cost of a ticket (or multiple tickets) at a movie theater. Hence, the VCR has also transformed the film industry—film producers now make the most of their profits from video rentals (even in cases when films are quite successful at the box office). By the mid-1990s, over 86 percent of American households owned a VCR.

The VCR is not the last word on home entertainment, however. Films are also available on laser-discs and DVDs (digital video discs or digital versatile discs). These technologies promise to transform once again the home viewing experience. Laser-discs have been available in the United States since the late 1970s, but they never became popular. They are cumbersome and can only contain approximately 1 hour of material per side. Laserdiscs also have analog video components (like videotapes) so they suffer from some generational degradation. DVDs, on the other hand (available since 1996), hold more promise. They are digital, and therefore suffer very little generational degradation, and are comparable in quality to studio masters. They are also much smaller than laserdiscs, and can contain up to 4 hours of material (8 hours if both sides are used). Both laserdiscs and DVDs have features that videotapes do not have (such as scan and search functions), but only DVD is capable of interactivity. While all these new technologies allow consumers to have control over the time and space of the consumption of media goods, the goods are still primarily produced by Hollywood, allowing the New Hollywood to demand ever-increasing market share in the US and abroad.