Last distributor of VHS tapes hits the ‘stop' button

Pop culture is hitting the eject button on the VHS tape, the once ubiquitous home video format that will finish this month as a creaky ghost of Christmas past.

After three decades of steady if unspectacular service, the spinning wheels of the home-entertainment stalwart are slowing to a halt at retail outlets. On a crisp Friday morning in October, the final truckload of VHS tapes rolled out of a Palm Harbor, Fla., warehouse run by Ryan J. Kugler, the last major supplier of the tapes.

"It's dead, this is it, this is the last Christmas, without a doubt," said Kugler, 34, a Southern California businessman. "I was the last one buying VHS and the last one selling it, and I'm done. Anything left in the warehouse we'll just give away or throw away."

Dumped in a humid Florida landfill? It's an ignominious end for a product that redefined film-watching in America and spawned an entire sector led by new household names such as Blockbuster. Major chains gave up on VHS a few years ago but not Kugler, who casually describes himself as "a bottom feeder" with a specialization in "distressed inventory."

Kugler is president and co-owner of Distribution Video & Audio Inc., a company that pulls in annual revenue of $20 million with a proud nickel-and-dime approach to fading and faded pop culture. Whether it's unwanted "Speed Racer" ball caps, unsold Danielle Steel novels or unappreciated David Hasselhoff albums, Kugler's company pays pennies and sells for dimes. If the firm had a motto, it would be "Buy low, sell low."

"It's true, one man's trash is another man's gold," Kugler said. "But we are not the graveyard. I'm like a heart surgeon - we keep things alive longer. Or maybe we're more like the convalescence home right before the graveyard."

The last major Hollywood movie to be released on VHS was "A History of Violence" in 2006. By that point major retailers such as Best Buy and Wal-Mart were already well on their way to evicting all the VHS tapes from their shelves so the valuable real estate could go to the sleeker and smaller DVDs and, in more recent seasons, Blu-ray discs. Kugler ended up buying back as much VHS inventory as he could from retailers, distributors and studios; he then sold more than 4 million VHS videotapes over the past two years.

Those tapes went to bargain-basement chains such as Dollar Tree, Dollar General and Family Dollar, and Kugler's network of mom-and-pop clients and regional outlets, such as the Gabriel Bros. Stores in West Virginia or the Five Below chain in Pennsylvania. If you bought a Clint Eastwood movie at the Flying J Truck Stop in Saginaw, Mich., or a "Care Bears" tape at one of the H.E. Butts Grocery stores in Texas, Kugler's company probably put it there. He also sells to public libraries, military bases and cruise ships, although those clients now all pretty much want DVDs.

Kugler estimates that 2 million tapes are still sitting on shelves at his clients' stores, but they are the last analog soldiers in the lost battle against the digital invasion. "I'm not sure a lot of people are going to miss VHS," he said, "but it's been good to us."

The VHS tape never really had a chance once the DVD arrived in the late 1990s with all its shiny allure - higher quality image, nimble navigation and all that extra content.

After a robust run at the center of pop culture, VHS rentals were eclipsed by DVD in 2003. By the end of 2005, DVD sales were more than $22 billion and VHS was slumping badly but still viable enough to pull in $1.5 billion. Next year, that won't be the case.

Just before Halloween, JVC, the company that introduced the Video Home System format in 1977 in the United States, announced that it no longer would make stand-alone videocassette recorders. The electronic manufacturer still produces hybrid VHS-DVD players, but it's not clear how long that will last.