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With DVD In the Fast Lane, Consumers Are Passing on VHS

10 Mar, 2003 By: Stephanie Prange

In talking to DVD-only retailers for a recent article, it became clear to me that previously viewed DVD sales are an important part of the new format's market.

As this week's online poll (over there, on the right) shows, retailers are garnering a good part of revenue from sales of previously viewed discs. My bet is that previously viewed DVDs are fueling a rise in revenue for rentailers, even as rentals may be taking a hit from sales. Consumers perceive pre-viewed DVDs to be more valuable than their VHS counterparts; indeed, many consider pre-viewed discs more valuable than a brand new cassette.

Consider this exchange, which I observed during a visit to Blockbuster over the holidays.

A woman asked the clerk if the store had National Lampoon's Christmas Vacation on DVD. She'd seen it on TV and wanted to add it to her collection. The clerk said they had some brand new copies.

“Do you have it previously viewed?” she asked, evidently looking for a better price.

“No,” he said. “It's too old.” (It wasn't a new release that had migrated to the pre-viewed bin.)

The clerk then showed her the new VHS copy, which cost about $2 less than the new DVD – a seemingly good option for a cost-conscious consumer.

Though she admitted her household had only one DVD player to its three VCRs, the customer did not buy the cassette. She opted for a new DVD. But her first choice obviously was a previously viewed disc.

I'm sure this scenario plays itself out continually in the rentail store. Customers look at a used disc as if it were a high-end car with only a couple thousand miles on it – in short, they see it as a really great deal. Whereas pre-viewed VHS is the old Pinto of video, DVD is the nearly new BMW. With DVD, rentailers have a really hot sellthrough product that puts them on a more level playing field with Wal-Mart.

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