This article is from the RCA SelectaVision VideoDisc FAQ, by firstname.lastname@example.org (Tom Howe) with numerous contributions by others.
RCA expected to sell 200,000 players in 1981 (they sold half that
number), and the company forecast that in 10 years the players would be
in 30 to 50% of all American households with $7.5 billion in annual
sales of players and disc. Why didn't this happen? The simple answer is
competition from another video delivery platform- the VCR. RCA's
estimate of the success of the CED system may have been accurate,
perhaps even conservative, if there had never been a video cassette
recorder. When the CED system hit the market, VCR's were well
established, and the typical consumer thought "Why would I want this
VideoDisc player, when for about the same price I can get a VCR that
both plays and records." RCA's market research didn't take videocassette
rental into account at all, and a lot of consumers who earlier would
have been willing to purchase movies now preferred to rent them.
If not for the media problems, RCA could have released the CED system
regionally in 1977 when it probably would have been more successful. At
that time VCR's would have been double the price, prerecorded tapes and
rental outlets were rare, and blank tapes were just a little less than
the anticipated price of a VideoDisc. The RCA VideoDisc system was a
technological success, increasing the data density of an audio LP by
over two orders of magnitude, but it simply reached the market too late.