Circuit City pushing out VCR tapes in favor of DVD

Soon, you'll no longer be able to buy movie videos at Circuit City. No more "Hunt for Red October," no more "Casablanca" -- at least not to play on your videocassette recorder. The nation's second-largest electronics retailer is phasing out sales of videotape movies as the chain makes way for the inevitability of DVD.

Circuit City Stores Inc. is the first national retailer to sound such a clear death knell for videotape and the VCR, the dominant form of home video entertainment for almost two decades. Citing steadily increasing consumer hunger for DVDs, which provide higher sound and picture quality, Circuit City has stopped selling movie videotapes at some stores and will soon discontinue sales at other stores.

"We're responding to what people are wanting to buy," said Jim Babb, a Circuit City spokesman. "People have happily embraced DVDs. Our sales have been moving toward DVD for quite some time."

Circuit City's decision affirms that consumers are driving another technological transition, much as when eight-track players yielded to cassette tapes and vinyl records succumbed to compact discs.

Best Buy paring stock

Even though Best Buy Co., Circuit City's chief rival, has no plans to halt sales of movie videos, the 400-store chain is paring its stock of videos while expanding the number of titles it offers on DVD, which stands for "digital video disc" or "digital versatile disc," depending on whom you talk to.

In September, Blockbuster Inc. said it would remove 25 percent of its less-popular and older videotape rentals from stores to make room for DVD movies and video games, at a cost of $356 million.

But the decision paid off, said company spokesman Randy Hargrove.

Blockbuster reported $799 million in DVD rentals in 2001, compared with $289 million the previous year, a 176 percent jump. DVD rentals represented 18.5 percent of rental revenue last year, Hargrove said. By the end of this year, they should represent about 40 percent.

VCRs still enjoy massive marketplace dominance: More than 95 percent of U.S. homes have video players.

VCR sales declining

But retailers watch trends: VCR sales have been declining for some years, while DVD penetration is at 30 percent and rising, according to the trade group Consumer Electronics Association. At Blockbuster, rental revenue for videotapes in 2001 stood at $3 billion, but that's down from $3.4 billion the previous year.

Consumers choose DVD over videotape not only for its superior picture and sound quality, but for the extra content DVDs often contain, and the more sophisticated features on DVD players.

They have embraced DVD technology at an unheard-of rate, according to research. By the beginning of 2001, DVD players were in 20 percent of U.S. homes, an acceptance rate twice as fast as VCRs experienced.