Homevideo is the most important innovation to enter the entertainment industry since the mass adoption of television nearly 40 years ago. It has revolutionized the movie studios, contributed to the crisis besetting the broadcast television networks, and changed the way Americans are entertained. Homevideo is the only private-sector mass rental business, and has very quickly matured into a sophisticated industry. However, homevideo may be vulnerable to cannibalization by more efficient, convenient, and competitively priced delivery mechanisms because of its principal role as a resale market for feature films. Thus, homevideo may be ultimately replaced by the wider scale adoption of such alternative delivery mechanisms as pay-per-view or direct-to-home satellite services. (EW)