Audio Video News

A surprise announcement from the nation's second-largest consumer electronics retailer may put the decline of videotape into hurry-up mode.

On June 21, Richmond,VA–based Circuit City Stores, Inc. announced it would no longer stock pre-recorded VHS tapes. The move is a response to the rapid market acceptance of DVD. Shelf space in Circuit City's more than 600 stores will henceforth be dedicated to DVD, said company spokesman Jim Babb. "People have embraced the technology in a big way, and we're responding to that by increasing the space given to DVD titles," he stated.

The stores will continue to stock blank tape and videocassette recorders, but soon Circuit City customers who want to buy movies will be able to get them only one way—on disc. "People who are buying movie titles these days want to buy them on DVD," Babb explained. Circuit City is the first major retailer to make such a dramatic move. Best Buy Co., Circuit City's primary competitor and the #1 electronics retailer in the US, has made no public statement about its plans for continued VHS sales.

The market for blank tape is still strong; most US households have VCRs, and many people use the machines to record favorite television shows. Those who want to build movie libraries, however, were attracted to DVD from its inception. The video quality and durability are both unquestionably better, and DVDs have generally been priced to sell. The home video divisions of some film studios, in particular Warner Home Entertainment, have been pushing for low DVD prices to encourage impulse sales. The company's president, Warren Lieberfarb, has been quoted many times, asserting, "DVDs are sell-through, not rental products."

Video rental chains have been gradually re-organizing their displays to accommodate a growing number of DVD titles while thinning the ranks of slow-moving tapes. Some, like Blockbuster, have even devalued their videotape inventories in recognition of the declining demand for movies on tape. Tapes will be sold until they are gone from Circuit City stores, with no deadline for clearing them out, Babb said.

International Recording Media Association (IRMA) president Charles Van Horn was critical of Circuit City's decision, saying that the move to drop VHS "will disappoint the 60% of consumers who have a VCR but no DVD." Van Horn may not be aware that entry-level DVD players now sell for approximately the same price as basic VCRs, especially in stores like Circuit City's. This summer, IRMA is "ramping up its VHS Videocassette Coalition to promote the medium's effectiveness as both entertainment and marketing vehicles . . . just in time for the format's 25th anniversary," the organization's Website states.