VHS: Going, Going... Gone?

John Scura
It is rare in this age of accelerated change that a technology can dominate a market for decades. Yet that is exactly what the VHS format has done since its inception in the late 1970s, toppling film in the adult entertainment sphere and blowing away competing formats like Beta.

VHS took adult entertainment out of sleazy theaters and moved it into the cozy comforts of home, and a new king of adult entertainment was crowned. But the reign of King VHS finally may be over. The DVD format now rules the marketplace. All hail the new King — but is the old one really dead?

"I don't think VHS is over," Metro Vice President Noel Bloom tells XBiz. "I've been saying this for a couple of years when everyone started to bury VHS. There's still a big market out there."

Bloom, a veteran of more than 30 years in the adult industry — going back to the days when he shot 8-millimeter films for his father's Pendulum Press company — admits that Metro stopped making new releases in VHS format three months ago. But he insists that there is still a huge market for "blowout items."

"We're selling those as fast as we can make them," he reveals. "Part of it is because so many other companies aren't carrying VHS anymore. The mail order people are still buying VHS, and we still have our 'A' titles. There are probably 20- 30 of those, and we haven't reduced our prices."

But the great majority of execs in the business think VHS has seen its last days.

"The advancement of technology is inevitable," Scott Taylor, owner of New Sensations and Digital Sin, tells XBiz. "There was a time when we all enjoyed the extra money that the dual format release of VHS and DVD brought us, [but] the loss of VHS … is just something we accept."

DVD Trumps VHS?
Jeff Mullen, president of marketing company All- Media Play and his own production company, X-Play, doesn't understand why anyone wouldn't change over to DVD.

"Anyone who hangs onto titles for a long time knows that there's a degradation that takes place with tape," he points out. "I like the fact that you can jump around with DVD, as opposed to having to cue up a tape, which takes forever. It's kind of like people who have jumped into TiVo and have fallen in love with it … because of the instant access."

Allen Gold of Cherry Boxxx says his company also has stopped making VHS releases, and adds that the few companies that continue to sell VHS titles are only getting about $1 per unit from the distributors. Most of them are now sold as "grab-bag" items, where distributors buy 50 different titles per box at $1-$2 per unit. The retailers then kick the price up to $3-$5 per unit, although they are still getting much higher over-the-counter prices in certain parts of the country.

"It's just that DVD machines are so cheap now," Gold says. "You can get a DVD player today for less than 50 bucks. I don't even think they're making VCR-only machines anymore. If they are, I don't understand why anyone would buy them."

Online rental site has never carried VHS. "Four year ago, when we started, VHS was on the way out," CEO Jax explains. "[Distributors] told us the VHS sales were decreasing. We didn't want to stock up on inventory that would be worthless in a few years."

All agree that DVD is a better format. The obvious reasons are the better picture quality and the compact size. "With DVD, you get more entertainment value on each disc than you could have on VHS, and DVDs are easier to display and use less shelf space at retail," SexZ Pictures owner Bo Kenney points out. Users also enjoy the additional features on a disc, which allows them to access particular scenes and even particular angles. For this reason, some companies now are using as many as five cameras during their shoots.

The advantages don't end with the consumer, either. Production costs are much lower than they were with the old video formats. Cherry Boxx is one of the many companies that shoot only HDready now, which produces a much higher quality picture at a fraction of the old cost of video format.

"Now we shoot two days a week," Gold says, "and we do five new titles every week."

"[Equipment] obviously has gotten much smaller over the years," adds Jeff Mullen. "Now people are shooting with cameras that are compact, although there are still some production companies using big 50- pound Beta cameras. I don't know why. I guess it's like the people who still like to play records."

Even Bloom, whose company still reaps profits from VHS, has to admit that DVD is much cheaper to produce.

"It's the cost of the materials," he points out. "Replication of a DVD is about 35 cents, and the case it goes in is 12-15 cents. The VHS replication costs 50-55 cents and the outer box is 23- 24 cents."

So DVD has all the advantages and no drawbacks, right?

Not so fast. The very simplicity and affordability in producing DVD product has created an ever-expanding glut of adult titles on the market.

"It's insanity," Mullen complains. "The joke is that every asshole with a camera thinks he's a director. That's why some companies are coming and going, and why the venerable companies that have been around are forced to really catch up."

Indie Spirit
The chief complaint among the "established" companies is that there are many poorly produced titles on the market, and consumers can't judge a movie's quality until they buy it and play it at home. A consumer has no way of knowing the difference between a lower-quality $12,000 movie and the well-produced $200,000 movie beside it on the retailer's shelf.

Bloom claims there are about 250-300 new releases coming out every week. "With these new cameras," he says, "you don't need a lot of light. All you need are the actors and a bed, and you shoot it."

There is no obvious way to control the flooding of the adult marketplace, either in terms of product quality or price. And the old stocks of VHS are complicating the matter.

"There are companies that purchase the existing VHS stocks at very low prices and sell them to stores so customers can get bargain rates," Mullen says. "I've seen comps selling for 49 cents. I don't think that does anybody a service, because basically it's a product that's been regenerated from tape. The quality sucks, and ultimately the audience is stuck with an inferior product. It doesn't help the companies that are trying to create a quality product, but I guess they [the compilations] have a right to be in the market also."

Though the intense boom in competition has made it difficult for the older firms to hold their prices, there seems to be no end to the demand. The income from the Internet alone seems to increase exponentially from year to year, approaching 20 million links on the major search engines. Just about all of this activity is DVD fueled.

"I'm amazed at the demand that keeps up with all this product," Bloom says. "But I was amazed way back when I was doing 8-millimeter."

And as for VHS in this competitive new market?

"I wish you could put the VHS stocks in a big bonfire and burn them," Mullen says.