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A photo provided by Steve Seifert Associates shows Andre Blay in 1982.STEVE SEIFERT ASSOCIATES/Steve Seifert Associates via The New York Times

Andre Blay, whose innovative idea of marketing Hollywood movies on videocassettes sparked an entertainment industry bonanza and a revolution in television viewing, died on Aug. 24 in Bonita Springs, Fla. He was 81.

The cause was complications of pneumonia, his son, Robert, said.

Once Hollywood studios, moviegoers and couch potatoes began catching onto the phenomenon in the late 1970s, Mr. Blay’s merchandising breakthrough created a new revenue stream that helped revive the film industry.

It also created a vast market for goods ranging from video recorders to popcorn that viewers could microwave at home.

The relatively high initial retail price of movies on videocassettes also prompted a proliferation of video-rental stores.

Mr. Blay, in effect, redefined the term “home movie” with a product that lasted just long enough to make him a multimillionaire.

In 1966 in Troy, Mich., he helped found Stereodyne, the first successful audiocassette and eight-track duplication company in the United States. Three years later, in Farmington Hills, Mich., a suburb of Detroit, he started Magnetic Video Corp., which, like Stereodyne, produced tapes for corporate customers.

In the late 1970s, Mr. Blay began pitching film studios on the idea of putting movies on videocassettes. Initially there were no takers but, in 1977, he was able to persuade Twentieth-Century Fox. to make a deal under which Magnetic Video would duplicate and distribute 50 of the studio’s most successful films, including M*A*S*H and The French Connection. For his part, he would pay U.S.$300,000 up front (about US$1.3-million in today’s dollars) plus US$500,000 annually and a US$7.50 royalty on each title sold.

He did not have the field to himself for long, but he made the most of being first. He went on to establish a new video-duplication operation, advertised in TV Guide and created the direct-mail Video Club of America.

As the price of recorders plummeted, his sales boomed, and so did rentals.

Fox bought Magnetic Video in 1979 for an estimated US$7.5-million (more than US$27-million today) and named Mr. Blay the chief executive of Twentieth-Century Fox Video.

By 1987, home video was generating more revenue than movie-theatre ticket sales.

Mr. Blay was inducted into the Consumer Electronics Association Hall of Fame for having “sparked a retail revolution as hundreds of mom-and-pop video and rental sales stores popped up in every community in America.”

Eventually, competition from other companies, piracy, the development of DVDs and satellite and internet transmission of movies to homes eroded Mr. Blay’s market share and profit. The VHS was relegated to an almost obsolete cultural artifact. Mr. Blay moved into making his own movies instead.

In 1981, he formed a video-software company, which he sold the next year to Embassy Communications. He became chief executive of Embassy Home Entertainment and also oversaw the production of films including Sid and Nancy (1986), The Princess Bride (1987) and Hope and Glory (1987).

After leaving Embassy, he formed Palisades Entertainment Group with Elliott Kastner. The company produced Prince of Darkness (1987), The Blob (1988) and Village of the Damned (1995).

Andre Alvin Blay was born on July 27, 1937, in Mount Clemens, Mich., to Robert Blay, a factory manager, and Agnes (Zuehlke) Blay, a homemaker.

He graduated with a bachelor’s degree in 1959 from Michigan State University, where he also later earned an masters degree in business administration.

In addition to his son, Mr. Blay leaves his wife, Nancy (née Fleming); a daughter, Cynthia Maxsimic; and five grandchildren.

In 2010 he was the author of a book, Prerecorded History.

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