Videotapes, VCRs mounting a comeback
By Theoden K. Janes
The Arizona Republic
If the DVD format didn't already have a billion things going for it, it does now. This month, the video industry shipped its 1 billionth disc into the marketplace.
Associated Press library photo
That's nine zeros. And that's another milestone that the format reached more quickly than VHS did.
John Reeves of Midlothian, Va., browses through DVDs at a Circuit City store near Richmond, Va. Some retailers are phasing out VHS movies in favor of DVDs.
Since their debut in 1997, DVD players have made their way into U.S. households twice as quickly as VCRs. In that time, the average cost of a DVD player dropped from $700 to about $150, a mark it took the VCR 24 years to reach.
Although standard DVD players cannot record television shows, they can produce 540 lines of resolution to VHS' 230, which is a fancy way of saying that a DVD's picture quality is more than twice as good as that of VHS.
"If somebody asked me to give up my VCR, I'd say, 'That's fine,' because I don't use it," said Paul Tafoya, 23, of Chandler, Ariz., who has owned a DVD player for about a year. "DVD is just a hot thing right now."
But it also could become a thing of the past in record time, if electronics manufacturer JVC has its way. The company is trying to orchestrate a comeback for videotape, giving VHS a high-tech makeover introduced to upscale retailers as D-VHS earlier this year. It can play back up to 1,080 lines of resolution, according to JVC.
Worried? Don't be, industry insiders say. Not yet.
According to market research firm NPDTechworld, more than 30 percent of 104.7 million U.S. households own a DVD player, and millions more can play discs on personal computers with DVD-ROM drives or specially equipped Microsoft Xbox or Sony PlayStation 2 video-game consoles. Researchers estimate that penetration will reach almost 47 percent by the end of 2003.
VCRs, introduced in 1974, did not achieve that saturation level until 1988.
One need look no further than Wal-Mart, the largest U.S. retailer of packaged videos, for proof that DVD is the new standard. Its Web site sells 28 different DVD players but just 16 types of VCRs. Or consider that Circuit City, the nation's second-biggest electronics chain after Radio Shack (which doesn't sell movies), is phasing out VHS titles because of decreased demand.
"There's been criticism from different trade groups that said, 'Well, you know, maybe what Circuit City's doing is a bit too early,' " Circuit City spokesman Bill Cimino said. "But really, it was a reflection of what our customers were buying, and what our customers are buying are DVD movies."
Consumers often say DVD has an edge over VHS because of the superior image quality, the portals it provides to additional movie information and no rewinding is needed. Viewers can skip to their favorite scenes, like going directly to a CD track. In fact, DVD hardware also reads CDs.
But affordability really has been the key. New DVDs cost anywhere from $12 (sometimes lower) to $30, and bargain hunters can find players for less than $60.
The least expensive player at Wal-Mart, for example, is one manufactured exclusively for that retailer by Ontario, Calif.-based Apex Digital Inc. It sells for $68.87. Kmart and Circuit City also have been advertising Apex models for as low as $99.74 and $64.99, respectively.
As far as software is concerned, consider this: "Harry Potter and the Sorcerer's Stone" carries a list price of $26.99, and advertised prices less than $20 abound. The VHS version retails for $2 less but only has about five minutes of the disc's several hours of bonus material. Seeing "Harry Potter" in the theater could cost a family of four about $30 or more, based on the National Association of Theater Owners' average ticket price of $5.35 plus popcorn and soda.
DVD seems to be shifting the ratio of consumer spending toward purchases and away from rentals, Adams Media Research President Tom Adams recently told the magazine Video Business. That poses a potentially serious challenge to companies such as Blockbuster.
Adams said in Video Business that consumers are buying about 16 DVDs a year, compared with the 4 1/2 videotapes a year that consumers averaged when that format was at its peak.
It's important to remember, though, that your VCR is not useless.
A Consumer Electronics Association report says 4.7 million DVD players were sold to dealers from Jan. 6 to May 26, while, during the same period, 4 million VCR decks were sold at an average of less than $70 apiece. It also emphasized figures that show consumers still rent VHS titles 3 to 1 over DVDs.
Although a small number of DVD recorders are on the market, the average cost is about four times that of a standard DVD player.
As a result, even Circuit City continues to stock VCR decks and blank VHS tapes despite its phaseout of movie titles, conceding that consumers still want those products so that they can record.
And Blockbuster Video, with 5,300 stores nationwide, stocks almost twice as many tapes as it does discs, although DVD has been gradually gobbling up more space on its shelves.
"Certainly you're going to see DVD increasing, but you're still going to have both formats in our stores," said Randy Hargrove, Blockbuster spokesman.
Part of the reason VHS rentals and sales may take awhile to taper off significantly is because more than 90 percent of U.S. households own a VCR. Replacing a collection of 50 VHS movies with DVD versions could take months or even years, at a cost of $1,000 or more.
VHS may be up against a more mundane foe: Many consumers' VCRs may simply die of old age.
In time, DVD, may also die.
The bell may begin tolling for it in 2006, the year the Federal Communications Commission wants TV stations to go all digital, shutting off their analog broadcasts. When this happens, Americans regularly will be fed a diet of stunning, virtually 3-D images, ones that are vastly sharper than what a DVD can deliver.
As a result, consumers will start expecting more out of a home-video format, and that's where JVC is hoping D-VHS tape (also known as Digital VHS) fits in.
D-VHS is fully compatible with VHS tape, eliminating the need for people with large collections to start from scratch. It also is capable of recording high-definition broadcasts, which neither DVD nor VHS can do.
And Hollywood studios love it because D-VHS uses a new Macrovision copy protection system and features uncompressed video, which is more difficult to transmit via the Internet than the compressed material on DVDs.
But insiders wonder if consumers would be willing to return to the days of fast-forwarding and rewinding, and whether D-VHS prices will drop enough. JVC's newest model sells for about $2,000 at high-end home-theater stores; movies, of which there are only a handful, go for $30 to $50.
