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THE MORNING BUZZ: VHS Is Going the Way of the Dinosaurs

26 Sep, 2002 By: Thomas K. Arnold

Despite studio protests that it's still a “viable format,” and despite IRMA's pathetic attempts to revive the VHS market through an awareness campaign and grandiose statements about how great tape is, the videocassette is dying -- fast.

Let's just compare sales for two “monster” hits, less than a year ago. Last November, DreamWorks reported sales of 7 million units of Shrek in the title's first three days of release. Of that total, the majority (4.5 million) was VHS.

Last week, Disney reported first-week sales of 11 million units of Monsters, Inc. The breakdown: 7 million DVDs, only 4 million cassettes.

The balance of power has shifted dramatically this year, and it's going to continue until VHS sales are polarized far in the minority. The studios are more than happy to accommodate this transition, with Disney offering consumers $5 rebates if they buy a film on DVD that they already own on cassette.

DVDs are cheaper for the studios to produce, and cooler for the consumer to own, thanks to a variety of factors -- not the least of which are all the special features and kid-oriented games and other “interactive play” elements suppliers are incorporating on discs to get people hooked on the DVD experience at a very early age.

Already, as Video Store Magazine has reported, several anime suppliers have given up completely on VHS. And while studio executives still go out of their way to stress the continued importance of VHS, wait until the DVD penetration rate passes 50 percent (it's now around 30 percent) and I bet you're going to see an abrupt change in their rhetoric.

The fact is, the VHS cassette is antiquated, a flawed technology that has no place in today's digital world. I understand Hollywood's reluctance to drive in the stake, just yet -- but it has less to do with genuine belief in VHS' durability than it has to do with avoiding the fate that befell the humble 8-track what now appears to be ages ago.

The market for 8-tracks fell so swiftly that K-Tel, one of the largest suppliers, unceremoniously dumped millions of new cartridges in landfill.

Video suppliers clearly realize VHS' days are numbered, but they don't want to be stuck holding the proverbial bag. Even though cassette sales are spiraling downward, they haven't bottomed out just yet.

It'll be a few more months, but quite honestly, I don't see VHS lasting more than a year.

Then again, Sony only now pulled the plug on Beta.

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