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As Wal-Mart Goes ...

19 Jun, 2005 By: Kurt Indvik

I found it amusing last week when a number of news outlets picked up on the story published in Home Media Retailing and The Hollywood Reporter regarding Wal-Mart's flight from the VHS business.

Amusing because we, along with other trade press, have been writing about the demise of VHS for the past several years, and our data now consistently shows DVD raking in 95 percent or more of industry revenue and VHS continuing to falter. But when you attach Wal-Mart's name to anything, suddenly it's big news. When even Wal-Mart looks to be jettisoning VHS, it must officially be dead, right?

Though initially Wal-Mart did not return our request for comment on the story, the wave of news reports that followed ours prompted Wal-Mart to respond. (They did offer follow up comment to us for this week's issue of HMR.) For the record, Wal-Mart said it is not completely phasing out VHS by the time of its February 2006 merchandise “reset,” as our sources have said is very likely, but it is taking steps to adjust VHS stock by store, based on customer demand.

Though our sources and our report used such words as “could” and “most likely,” some of the headlines which ran elsewhere gave the story a distinctly more imminent and immediate tone. We're sticking by our story and our sources, and will be watching to see what the retail giant does with VHS based on customer demand. If it reflects what we already know about the VHS business, then our sources' estimation that the retail giant will “most likely” be out of the VHS business by February of next year isn't at all farfetched.

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