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TK's MORNING BUZZ: Retailers Should Benefit from the Expansion of Home Entertainment Because This Revolution Is Televised

10 Sep, 2001 By: Thomas K. Arnold

I have a theory that all forms of home entertainment will expand by leaps and bounds in the coming years. This is good news for everyone involved in, or on the periphery of, our business -- from video retailers to satellitesellers -- and, if proven true, should provide hope for even those who are not now sharing in what many are already calling a boom.

My theory is based on one principle: TVs are getting better and better, and that induces more watching. I see it in my own family -- I never have time for anything, but ever since I got rid of the 1986 27-inch Trinitron, replaced it with a 36-incher and added a cheap little home theater sound system ($399 foreverything), I am watching more movies than I ever have in the past.

My theory helps explain why DVD caught on as quickly, and as solidly, as it has; why the falloff in VHS sales hasn't been as dramatic as one might think; why small rentailers in some markets are reporting significant gains, year-over-year, in rental activity; and why the studios are scrambling allover themselves for a piece of the VOD pie-in-the-sky. No question, after years of talk, talk and more talk, the oven's finally warming up.

If my theory holds true, then things can only improve. We've got HDTV less than five years away, which means better broadcast quality. We're seeing a wealth of hot new flat-screen TVs come onto the market, and prices arestarting to tumble. And the widescreen market is also expected to blossom asconsumers embrace the new wider configuration so conducive to widescreen DVDsthat faithfully reproduce a movie the way it was intended to be seen.

Sure, certain elements feed off each other. TVs are getting better, in part,because people are switching from VHS cassettes to DVDs; and people are switching from VHS cassettes to DVDs, in part, because TVs are getting better.

But if you step back and look at the whole picture -- pun intended -- I think you'll share my view. It's a good time to be in this business.

Comments? Contact TK directly at:TKArnold@aol.com

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