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VHS Lives! -- on Kidvid

21 Jul, 2005 By: Meryl Schoenbaum

Midyear 2005. DVD has unseated VHS rentals and sales in most categories, but has it completely done so in what is considered widely to be the last bastion of the videocassette market — the kidvid genre? Home Media Retailing asked key executives from several leading children's suppliers and distributors about the continued viability of VHS.

Debbie Ries, HIT Entertainment: VHS sales are still an important part of children's home entertainment. With 80+ million homes using VHS players, there is ongoing demand for children's favorite shows on VHS, including “Barney,” “Bob the Builder” and “Thomas & Friends.”

Lori MacPherson, Buena Vista Home Entertainment: According to our research, there are still about 3 million households actively buying VHS kidvid product. While this number is considerably smaller than it was a few years ago, it still represents meaningful consumer demand. VHS has made up 10 percent to 20 percent of our sales on recent infant/preschool releases like The Heffalump Movie, Disney Princess Stories and Baby Einstein: Baby Monet. However, as families continue to embrace DVD and retailers continue to devote less shelf space to VHS, those percentages are sure to dwindle.

Dennis Fedoruk, The Brainy Baby Co.: VHS continues to sell. In fact, since many of the major retailers have announced that they are dropping VHS from their shelves, our VHS sales have increased dramatically. I expect that this trend will continue as more and more mass market retailers force VHS off the shelf. This is creating a great opportunity for our company. I realize that the retailers and the DVD manufacturers want to force the transition into DVD, but VHS is king in the “kids room.” Until every VHS player ends up in the dumpster, VHS will still be around … especially if there are children with sticky peanut butter fingers!

Suzanne Faber, Anchor Bay Entertainment: VHS sales in the kidvid genre remain exceptionally strong for us. Many consumers don't see preschool children's product as a collectable item or one that they will own long term and, therefore, look for the lowest cost. VHS players also are easier for young children to handle versus DVD players, and many households have moved the VHS players into the children's rooms when purchasing the DVD player for the main living area — all the more reason to continue buying VHS for kids.

For sales thus far in 2005, Anchor Bay VHS rentals have remained constant, and yet, sellthrough continues to keep pace and in many cases outperform sales of companion DVD titles. Part of this is due to the fact that much of Anchor Bay product is sold with value-add items. Our “Thomas” series is sold largely with a train on top. While the value of the VHS tapes may be somewhat diminishing, the train value continues to be high. Net, net the VHS business is still a very significant and profitable part of the business.

Alan Fergurson, Sony Wonder: Several major retailers are continuing to stock VHS, and our preschool business is still 30 percent VHS, so we will continue to be in the VHS business.

Michael Rathauser, Lions Gate Home Entertainment: Yes, VHS does still sell in the kidvid genre. We find this to especially be the case with preschool, episodic TV properties, but it also applies to kidvid in general. In some cases, we have preschool titles in which 50 percent of our business is still in VHS. With some of our event children's titles, we find that while initial-week sales skew much more toward DVD, after the initial few weeks, at stores carrying VHS, VHS can represent 30 percent to 40 percent of weekly sales. The overall decline in VHS sales is as much a function of retailers forcing the transition by reducing or eliminating their VHS children's shelf space as it is of households transitioning to DVD.

Sarah Slater, WGBH Boston Video: WGBH Boston Video's titles are distributed primarily to specialty stores and to the educational/library marketplace, where we still see a strong demand for VHS from schools and libraries, and from parents who are still using the older technology. We only recently introduced our kidvid titles on DVD and are experiencing a strong surge in sales, but not at the expense of VHS sales. I think the diminishing demand for VHS will take much longer to reach our marketplace, and WGBH plans to continue offering its titles in both formats for the foreseeable future.

Joe Lyons, 4Kids Entertainment: It seems the 2004 holiday season marked a dramatic change in the kidvid market, as we saw the gap between DVD and VHS sales grow wider each week in 2005. With parents and kids always on the go, DVDs offer more options than VHS on where and when they can watch their favorite shows.

Len Levy, Pro-Active Entertainment Group: We represent a number of producers and independent labels that offer kidvid products. They have all added DVD versions of their titles. Though one company continues to offer VHS, the requests are few are far between. With the shrinking availability of VHS products at retail, the sale and rental activity of kidvid titles has shifted accordingly.

Elisa Peimer, New Video: VHS has traditionally been a holdout format in the kids' business, mostly due to the cheaper price and the fact that many parents still kept a VCR in their child's room after replacing their own VCR with a DVD player. As DVD has become more saturated in the market though, that's starting to change, and at a faster rate than we've seen previously. In the past six months, we've seen a significant drop-off in the format. DVD players are so cheap now that it's easy to replace a child's VCR with a new DVD player, and the cost of DVDs have come down enough to make them a perfectly viable option for children's entertainment.

Larry Brahms, MTI Home Video: Absolutely. We found that there is still a strong demand for VHS with mail order, catalogs and specialty accounts. Our catalog and mail-order catalog division flows at 50/50 (VHS/DVD).

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