Circuit City, the national electronics chain, is the first nationwide mass-market retailer to announce publicly that it is eliminating VHS product from its stores.  Since shelf space is at a premium in high traffic stores, the public's growing demand for DVDs is spelling the end for VHS pre-recorded movies in spite of the 90% penetration of VHS players in U.S. households.  Circuit City will use the space formerly given over to VHS tapes to display DVDs.  A couple of years ago Circuit City quit selling kitchen appliances and devoted the space to electronic software including VHS tapes, and at that time a relatively small section of DVDs.  In just two years the growing number of DVD releases and the growing sales of DVDs have spelled the end of VHS at Circuit City.


The same week that Circuit City announced the elimination of VHS movies, Disney released a study of the DVD market estimating there will be 60 million DVD-enabled households in the U.S by the end of this year.  The Disney study showed that an increasing number of families were buying DVD players.  During the three-month period that Disney studied families purchased an average of 6.4 DVDs, close to the 7.5 purchased during the same period by DVD owners who were not parents.  Back in the era of the 'early adopters,' The Matrix was the best-selling DVD of all time -- now there are already enough DVD-enabled families that we have Harry Potter and Shrek duking it out for a short-lived hold on the crown that The Matrix wore for well over a year.


It is clear from the Disney study and the Circuit City announcement that the DVD medium is moving quickly towards mass-market dominance in pre-recorded product.  Since the pop culture retailer deals with a younger tech-savvy audience that includes many 'early adopters,' the effect of the shift to DVD was felt earlier in our market, and many stores have long since switched to DVD, especially in anime, where the whole subbed vs. dubbed controversy is eliminated with the multiple audio track and subtitling capabilities of the DVD medium.  The fact that mass-market retailers have had to eliminate VHS pre-records to make room for the burgeoning number of DVD titles also indicates a trend that should favor specialty retailers.  The increasing number of DVD titles of all types will make it impossible for the mass merchants to carry all the releases of any genre, leaving lots of opportunities for retailers who specialize in anime or science fiction or Hong Kong films or animation, etc.