Friday, June 20, 2003

Rewinding movies is becoming a thing of the past.

DVD rentals outpaced videocassette rentals last week for the first time, the Video Software Dealers Association reported.

For the week ended Sunday, 28.2 million DVDs were rented vs. 27.3 million VHS cassettes, according to the trade association’s VidTrac, a point-of-sale tracking technology.

“The American public has fallen in love with DVDs,” said Sean Devlin Bersell, a video association spokesman. “The acceptance of DVD has exceeded every expectation.”

Weekly revenue from DVD rentals began exceeding VHS rental revenue in the week ended March 16, according to VidTrac.

Since then, weekly DVD rental revenue generally has been beating VHS rental revenue. But the number of VHS rentals was greater than the number of DVDs rented — until last week.

Americans have accepted DVDs faster than they did black-and-white TV, color TV, VCRs and CD players, said Mr. Bersell. About 50 million Americans have bought DVD players since they were introduced in 1997. It took the VCR 10 years to reach the same threshold.

The most attractive feature, he says, are the bonus materials that videos don’t have. Mr. Bersell said he spent three evenings watching just the bonus material of his favorite movie, “The Wizard of Oz.”

“I love that DVD. By the fourth night, I turned to my wife an asked: Can we watch the movie now?” he said, laughing.

A DVD, or digital video disc, offers clearer images in a CD format and it has more room for extras like behind-the-scenes interviews, extra footage and director commentary.

DVD rentals have grown as more Americans buy the players, Mr. Bersell said. And the price has dropped as supply has met the demand — originally costing at least $300, they now run about $100.

“This is a milestone in the history of home video,” said the video association’s president, Bo Andersen. “Since the advent of video rental 25 years ago, videocassettes have been the dominant format for video rental. Now, just over six years since its launch, DVD has supplanted that pioneering technology in the rental market, as it previously did in the sales market.”

The growth in DVD rentals is a surprise to some industry officials, like Mr. Bersell.

Blockbuster, the largest movie-rental store in the country with 5,500 stores nationwide, said DVDs took 53 percent of rentals in the first quarter, an increase of more than 20 percent from last year.

“DVD has been the fastest-growing commercial electronic in history,” said Randy Hargrove, a spokesman for Blockbuster, who has seen a growing appetite for DVDs among his customers.

About 4,500 of Blockbuster’s 9,100 movies for rent are DVDs. The chain changed its format to mostly DVDs in the fall and has mixed the two formats on some stores’ shelves.

The company plans to introduce next year an online service that will allow customers to order DVDs online and receive them in the mail.

“Our stores respond to customer demand,” said Mr. Hargrove, “and they want more DVDs.”

Wal-Mart, the world’s largest retailer, also is trying to stay competitive by offering an online DVD-rental service that ships movies by mail to customers. Customers pay a monthly fee of $15.54 for an unlimited number of rentals and may receive two by mail at a time. Or they can pay $18.76 to receive three at a time.

Netflix, an online competitor, offers three DVD movies a month, delivered for $19.95. Customers may rent as many as three at once. While Netflix offers more than 15,000 movies, 2,000 more than Wal-Mart, it doesn’t plan on changing its fees. With 2 million customers, it is the top online DVD service.

Still, some don’t see old-fashioned videos ever leaving the shelves.

“We still think videos and DVDs are going to coexist for the foreseeable future,” said Mr. Hargrove.

As far as movies that were made pre-disc, VHS still corners the market. Most of the DVDs rented are new releases, but Mr. Hargrove said movie companies are adding old films to expand their collections.

“The library is expanding, so it won’t just be new releases,” he said. “DVDs still have some room to grow.”

Mr. Bersell said videocassettes are linear, unlike DVDs, where “you can design your own home-video experience.”

“And the final thing — you don’t have to rewind.”

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