As DVD Sales Fast-Forward, Retailers Reduce VHS Stock
Wednesday, June 15, 2005
The familiar VHS tape is rapidly going the way of the obsolete 8-track.
Big-name retailers Wal-Mart Stores Inc. and Target Corp. are taking steps toward decreasing their stocks of VHS movie offerings in response to a fall in demand, as customers prefer DVDs, which offer superior sound and picture quality and extra features such as outtakes.
"We've seen a growth in DVD [sales]," said Karen Burk, a spokeswoman for Wal-Mart. "It is very similar to what you saw with cassette tapes and CDs." Burk added that Wal-Mart, the world's largest retailer, still plans on carrying VHS movies and will adjust its stock based on sales at individual stores.
"We are not completely phasing out VHS," Burk said. "Our customers are not ready for that yet."
Target said through a company spokeswoman that the store plans to phase out some VHS titles, carrying only videocassettes of bigger name films and select children's and preschool movies. The store did not give a timetable for the changes.
Electronics retailers Best Buy Co. Inc. and Richmond-based Circuit City Stores Inc. stopped selling VHS movies in stores. Best Buy still sells some online.
Once the standard format for viewing movies at home, VHS is being replaced by newer technologies including DVDs and video on demand. In the first quarter of this year, sales of new VHS entertainment tapes fell by 40 percent compared with the same quarter the previous year, according to NPD Group, a market research firm. Sales for new entertainment DVDs were up 20 percent in the same period, according to NPD.
Industry observers say retailers will eventually stop selling VHS movies as more consumers opt for cheaper and feature-rich DVD players. "The only thing that was holding [DVD sales] back for a time was the price, and the price has come down," said David Smith, an analyst with Gartner Inc., a technology research firm.
With a basic DVD player selling for under $100, the number of households that have a DVD player has skyrocketed over the past few years. Nearly 90 million homes have DVD players, according to the Consumer Electronics Association. And retail sales of DVDs jumped to $15.5 billion in 2004, up more than 30 percent from 2003, according to the Digital Entertainment Group, a nonprofit funded by the entertainment industry.
Some movie studios view the slow death of VHS as a welcome boon, noting that fans and collectors like DVDs' additional features and smaller size. "It's a more contemporary product," said Pamela Godfrey, vice president for worldwide publicity for Warner Home Video Inc. "Plus you can collect a whole season of an actor's work and it doesn't take up four feet on a bookshelf."
While Warner Home Video still offers most movie titles in DVD and VHS format, Godfrey said certain adult-oriented movies such as horror films are sold only as DVDs. Godfrey added that VHS is a more common format for children's films. "If there is a VHS [player] in the kids' room," said Godfrey, "a family may not have replaced it for a DVD player."