Is VHS obsolete?

95 million U.S. households have VHS; 30 million have DVD

DVDs are getting more popular, but VHS is still the dominant format, experts say.

ATLANTA, Georgia (CNN) -- When Circuit City announced it was phasing out VHS movies in its 600 stores, the move was no surprise to some employees.

"Most of our customers are asking about DVD movies, not VHS movies," says Wade Hunt, a district manager for an Atlanta-area Circuit City.

The format does have its advantages: DVDs never have to be rewound, they can store extra features like outtakes and director commentaries, and it's easy to access different sections of the disc. Plus, the picture and sound quality are generally superior to videocassettes.

But considering that 95 million United States households have VCRs -- compared with 30 million that have DVDs -- some say the move by Circuit City is premature. And according to the Video Software Dealers Association (VSDA), people still rent three times as many VHS titles as DVDs.

CNN NewsPass VIDEO CNN's Ann Kellan looks at an electronics chain going digital and what it means for VCRs. (June 25) Play video

"The VHS format will decline naturally with the growth of DVD, but it's far too soon to write its obituary," says Bo Andersen, VSDA president.

Sales of DVD players started outpacing VCR sales last September, but that doesn't mean people are throwing out their VCRs.

One reason sales are still strong: it's a lot cheaper to record on VHS. Recordable DVD units can cost upward of $700. Until that changes, industry experts say, VCRs will always have a place in the home.

"I would say we're looking at probably 10 to 15 years before really consumers stop utilizing the product," says Sean Wargo, an analyst with the Consumer Electronics Association.

That's why Circuit City continues to sell VCRs and blank VHS tapes.

But many consumers are resigned to the eventual upgrade to the new format.

"I'm old enough to have an eight-track player and an eight-track tape," says shopper Mary Williams, "and I actually replaced it in cassette, and then replaced it in CD."

But Williams isn't plunking down her money for the latest DVD technology just yet.

"You're going to spend yourself into poverty being the first one on the block to have the new rewriteable DVD," she says, "so I'll just wait."