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Formats Die More Slowly Than Studios Think

27 Feb, 2006 By: Stephanie Prange

I took my typical post-holiday trip through the local Target this week. VHS is now less than 5% of the store's offerings, but remarkably is still alive more than 20 years after the introduction of the format.

DVD, on the other hand, was as ubiquitous as ever. There were two endcaps at the registers, promoting discs at $9.44 and $13.78. The CD/DVD section was dominated by DVD, with prominent sections for TV DVD and family/kidvid titles.

DVD has gotten a bad rap lately from pundits who see its growth slowing. But if you go by the growth and death curve of VHS, DVD is merely middle-aged. Yet the studios are hopping to bring out the new kids on the block — Blu-ray Disc and HD DVD — and are preparing for video-on-demand.

In my neighborhood, DVD is still a hot commodity. Families make DVD purchases almost on a weekly basis. I think the studios would do well to not to push new formats too soon.

A new study from Parks Associates has found few new households willing to subscribe to Internet services, which will limit 2006 growth in overall Internet penetration to 1%, rising from 63% to 64% by year's end. “We are clearly facing a problem of demand, not supply," said John Barrett, director of research at Parks Associates. "Computers and Internet service have never been cheaper, yet many households still show little enthusiasm for the technology."

Consumers are balking at new technology. It's all coming at them too fast. The business would do well to maximize the proven asset — DVD — and not hold out the hope that consumers will rush to the next new thing.

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