Hollywood was reluctant at first because the business model had always been you had to pay to see the movie each time. Who's gonna go see Star Wars or a Disney movie in the theater again if they can just watch it at home over and over whenever you want. That's why the tapes were initially so expensive when they did come out, because it was for renting not owning unless you were rich enough to not care.

With porn there was the obvious appeal of privacy.