Blockbuster dumping VHS for DVD

[James Harvey]

According to www.zap2it.com, VHS may be going extinct. If
ever a sign that the demise of VHS
and the domination of DVD is nigh,
this is it.

Conservative video rental chain
Blockbuster Video announced
Monday that it will beef up its DVD
selection and reduce its VHS
inventory and select video games
by 25 percent. With the digital fever
that has struck America, the
portion being given the heave-ho
only contributes less than one
percent of Blockbuster's revenues.
The company will also reduce the
residual values of VHS tapes and
games to around $2 and $5
respectively.

The changes are supposed to be implemented in time for the holiday season and will
cost the company $450 million.

This is all based on the higher profit margin to be found in the exploding DVD rental
market. "We believe this is the opportune time to capitalize on the continuing explosive
growth rate of DVD," said John Antioco, Blockbuster Chairman and Chief Executive
Officer. "The format has clearly gone mainstream, and consumers are demonstrating
that they prefer to rent, rather than buy their movies, a trend we predict will continue,
especially when consumers are focusing on value for their dollar."

Industry-wide, DVD rental revenue is up a whopping 184 percent over last year to $936.4
million as of Sept. 2, while VHS is down 10 percent to $4.84 billion. What's more,
wholesale cost for top DVD titles are about $15 on average compared to the $30 of
VHS.

An estimated 30 percent of Blockbuster's domestic rental revenue is expected to come
from DVD by year's end.

After successful tests, Blockbuster will also launch a holiday promotion to sell DVD
players packaged with free DVD rentals. Other promotions planned include a "rent
before you buy" one and free DVD players to purchasers of prepaid DVD rental cards.

[Calhoun07]

In my store, that amounts to about 25% of three thousand titles being cut back! WOW, that's awesome! Of course, I would not mind if they just became all DVD.

[Anthonynotes]

Blockbuster Video plans on switching 25% of its VHS tapes in stores to DVD's:
http://dailynews.yahoo.com/h/nm/2001...kbuster_1.html

Basically, it's more profitable to rent DVD's for Blockbuster....

-B.
Still doesn't own a DVD player...or a VCR...

[James Harvey]

I think this is good news. VHS is on the quick decline now (but will still stick around) and DVDs have been becoming more proedominant recently. I'm not suprised at all.

[Leaping Larry Jojo]

Hey, just when I got my own DVD player a few months ago...

[Anthonynotes]

Originally posted by Dick Grayson
I think this is good news. VHS is on the quick decline now (but will still stick around) and DVDs have been becoming more proedominant recently. I'm not suprised at all.

Well, I'm sure VHS will stick around for awhile, as long as recordable DVDs aren't economically feasible/affordable... along with the still-large # of VHS users (the library of tapes, the lack of all VHS films transferred to DVD yet, the # of people with VHS tapes [and who can't afford or don't want a DVD player yet], etc.).

-B.
Who doesn't have a DVD player... but could use a new VCR (since his current one seems to be going on its last legs)