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If you’ve followed the alternative asset space for at least the last two years, at some point, you’ve felt regret. FOMO realized. Boat missed.
Why didn’t I buy that Jordan card a few years ago? Because to me, it was just cardboard then.
Why didn’t I listen to my NFT-pitching friend? I thought he was a complete idiot! Because Ben didn’t make a compelling enough argument. It was incoherent psycho babble. And Ben IS an idiot.
Why didn’t I keep my ticket to Brady’s debut? Because it was a blowout loss to the Lions. He had six passing yards. Six!
Why, oh why, did I ever open my copy of GoldenEye for N64? Because that game was SICK. You’d have been a fool not to heat up some Pizza Bagels, crack that thing open, and hit up the Facility level with your buds.
Attention has turned from asset class to asset class as speculation swiftly raises the tide of collecting arenas old and new. And as soon as that tide rises, people feel VERY dumb for not having seized what was never really that obvious an opportunity. That’s why it’s so hard to be early to these trends: they’re rarely obvious and acting with conviction takes guts.
Well, if you’re familiar with the nascent rise of sealed VHS collecting, it’s safe to say that you are – in relative terms – early. And now, it’s up to you to decide if you believe in the category as a vehicle for future growth.
Wait.
**Record scratch**
Back up. Back up right this instant. Rewind and eject the tape altogether.
Did he just say sealed VHS collecting? Like the tapes? Big, clunky things from the nineties? Are people collecting floppy disks too? Did I die and pass on to some sort of afterlife where Blockbuster is still open and absolutely rocking? Can we hit Sam Goody after this? Just gotta be home in time for All That on Nickelodeon. Wonder what that Keenan Thompson’s gonna do when he grows up. Can’t do sketch comedy forever, right?
It sounds funny – ridiculous even – but isn’t that the case for most collectible items? Sure, more recently, video games have followed a similar vein, but people have meticulously collected comic books, wine, trading cards, coins, and countless other initially-puzzling assets for decades…and to great financial success!
If well-preserved comic books – that is to say, graded, encapsulated, and therefore unreadable comic books – are the subject of a market that can routinely generate millions of dollars in auction sales, it’s not outside the realm of possibility that the same could be true of a vehicle for film.
But why VHS? Why is VHS the right vehicle to capture the collecting fervor of passionate movie fans?
For the purposes of conversation, let’s lump BetaMax in with VHS. These were really the first solutions for home video that gained mainstream acceptance. In fact, though those mediums were introduced in the mid-1970s, it wasn’t until the 1980s that the concept of actually purchasing movies for a home collection, rather than simply renting them, grew more popular.
So, the VHS, which eventually won out against the superior quality but more complex Betamax, sits at a compelling moment in time from a collectability standpoint. Supply, particularly for 80s titles, was largely confined to the rental space, and was therefore A) relatively low and B) digested to poorer condition via consistent use.
Consider this: in the early-to-mid 1980s, the retail price for VHS tapes often approached $90. It wasn’t until after 1987 when Top Gun released for $26.95 that tapes became widely attainable at more reasonable prices. E.T. the Extra-Terrestrial then followed in 1988 at a price of $24.95. Simply put, before then, these were not retail products. It’s therefore easy to see how those mid-80s prints have the potential to become collectible.
But….VHS became ubiquitous not long after that. Home Alone released in 1991. There were 11 million copies of the VHS sold. The Lion King released on VHS in 1995. 32 million copies of The Lion King were sold on VHS. Thirty. Two. Million.
Still, the displacement of VHS by DVD, now decades ago, meant the junking of large swaths of well-kept supply that remained. Junking and the simple passage of time gives prospective collectors hope that true scarcity can propel the right titles, in the right prints, from the right moments to large future values.
DVDs, on the other hand, don’t benefit from the same forces. DVDs straddled eras. They rose to prominence in an era where movie rental remained popular but home collections were very much in vogue. In fact, it was only 2005, just a few years after DVDs caught and surpassed VHS in share, that DVD sales peaked at more than $22B. They later fell from grace in an era where physical rental was all but extinct and streaming was taking center stage, meaning there was little digestion. Neither moment creates favorable supply dynamics for collectability.
In VHS, just as with video games, it’s those beloved titles from the 80s and 90s that are imbued with nostalgia for a generation entering their peak earning years. That generation has demonstrated in other asset classes that it’s both willing and eager to allocate disposable income to collectibles. But is a significant portion willing and eager to dedicate dollars to the nostalgia-ridden, shrunken movie posters that are sealed VHS tapes?
You can start to wrap your arms around why someone might collect VHS. But if we want to understand their potential as a vehicle for capital appreciation, we need to better understand the market. The fun (and unnerving) part is that –more than with other categories – this is a market that is very much in the early stages of development in terms of infrastructure.
Just consider the grading landscape. Investment Grading (IGS) is likely the grading service most synonymous with VHS….for the moment. IGS has been around since **checks notes** 2020 at the earliest. So, to call them a leader might be overzealous. A visit to their site suggests this is a relatively early-stage, small-scale endeavor that has yet to attain the professional and institutional standards at which it would truly enhance the efficiency and legitimacy of the category. For example, the grading criteria is vague and unhelpful: “our examples and explanations are brief, because or full formularies are basically our ‘secret sauce’ for consistent and accurate grading. In the future, more hints will be released on our Instagram.”
Ah, okay…what?
Grading shouldn't be a “secret” or require “hints” to understand. Grading, done well and done right, is about increasing transparency and consistency of how the condition of an asset can be evaluated and compared. IGS does share a list of items that will generate a deduction, but the magnitude of each deduction is unclear, as are the categories that contribute to the overall grade and how these criteria fit on a scale.
To the company’s credit, they have released a “pop report” for VHS: a four-page PDF featuring sixteen titles.
That pop report does provide some insight into the areas graded: corners, edges, and surface of the box, as well as surface, tightness, and corners & edges of the seal.
For what it’s worth, reddit users on r/VHS have levied accusations that those operating IGS are also operating an eBay account that sells IGS games. As with many assets like this, there are additionally accusations of alleged shill-bidding and purchasing broad swaths of the market to control supply and raise prices.
IGS is not the only grading service on the market though. VGA, one of the longest-running and well-known video game graders, announced in October that it would begin grading factory-sealed VHS. For many, the track record in video games will not be a strong source of encouragement given there’s no dearth of controversy in that space. Transparency in grading criteria is not particularly strong at VGA either.
There’s also VHSDNA, launched in 2021. Again, grading criteria is not readily available, but their FAQ does state that they will not grade and sell any of their own VHS. So there’s that.
Surely, both more newcomers and existing grading companies will enter the space; it will come as little surprise if WATA or Certified Collectibles Group begins grading VHS.
The very clear reality here is that there is no market leader. There need not be a rush to submit VHS for grading because it’s very unclear which service or services could eventually set the standard and command higher values. Collectors entering the space should make any grading decisions carefully.
Research the various providers. Ask questions about their expertise – what qualifies them to authenticate and grade VHS? Understand the grading process – what are the key deduction points and what are the magnitude of those deductions? How are the various criteria combined to arrive at an overall score? Look at items that have been graded by that provider - how consistent do items of the same grade appear? Take a peek at the sales history where applicable - do the results make sense or do they require a suspension of disbelief?
The race to command the VHS space is far from over, and one could go so far as to say it hasn’t even begun.
I’ll be that one.
The race to command the VHS grading space has not even started.
Of course, the broader acceptance of grading leadership will be influenced by what’s sold in the most reputable channels. To date, sealed VHS has been transacted predominantly on eBay, and most sales of graded copies have been IGS. More on the market dynamics and pricing history on eBay in a moment (if you want to start making popcorn before we get there, now would be the time to do it).
As VHS gained steam on social media, with various influential parties taking notice, acceptance by other auction houses became an inevitability. In their recent fall auction, LCG Auctions, predominantly a purveyor of vintage, collectible toys, offered fifteen popular titles graded by VGA. Those 15 lots grossed over $58k, led at the high end by what’s believed to be a very early print of Return of the Jedi for $14.7k. Just two lots failed to reach four digits, a promotional copy of Home Alone and Beetlejuice.
Goldin Auctions recently announced that it too will be entering the VHS category, and from the looks of its upcoming auction, many of their copies will be VHSDNA graded, with a smattering of IGS.
Auction house involvement is generally a tailwind, and it can also contribute to the hastened maturation and increased efficiency of a market. More easily accessible and comparable sales data is of significant value, and so too is the demystification of prints and variants that can take place in lot descriptions.
The latter point is important in categories of great nuance. As in other asset classes, typically it’s the earliest prints that garner the greatest values. Distinguishing between those earliest editions and subsequent presses, and then comparing them in terms of rarity, is a challenge, one that requires expertise in many cases.
For example, LCG Auctions operated with caution in the case of the Return of the Jedi sale, declining to call it a first print despite strong indications supporting that labeling. There is significant ground to cover to allow prospective collectors to buy with confidence.
We would expect to see others currently engaged in the sale of comic books and video games, like Heritage Auctions, ComicConnect, and ComicLink, to enter the fray as well should the market show continued strength. There has been speculation that Heritage was indeed set to offer VHSDNA-graded items at auction, but those lots appear to have been ultimately removed.
Popcorn ready? Okay.
This is the part where it becomes clear the sealed VHS market has sprung from effectively nothing in a matter of months.
That is also the concerning part.
To be clear, there have been high-value sales in the past, but they correspond primarily with unsealed copies belonging to a certain niche - for example, black diamond Disney VHS from the mid-to-late 80s. But let’s break this down by looking at some of the top selling IGS-graded titles of the last few months – starting with Raiders of the Lost Ark.
All time movie. The type of movie that, if you think collectible VHS should be a thing, makes perfect sense as a market leader. One copy, from the third print (“press” is commonly used language in VHS) in 1988, graded an 8.5-9.0, sold for $37,500 in July of this year.
Uh-huh. Right. Okay.
Well, look, if a graded copy sold for that much in July, then surely there was interest in ungraded, sealed copies before then, right?
Right?!
Well, as it turns out, over the last year, no sealed copy of Raiders sold for even triple digits until a $499 sale in May. The vast majority of sales were below $25! That includes a few 1988 copies, which are rarer than the 1989 press and those that followed,
After the $499 May sale, there were a smattering of other, sealed sales in the low hundreds throughout the summer.
Then, wham! Fall comes, and all the sudden, you have a $12,500 sale of a 1981 (first print/press) copy, a $5,000 sale of a 1981 copy, a $4,000 sale of a 1981 copy, and a $2,000 sale of a 1988 copy (the same press as the graded $37,500 sale).
Just look at the Terapeak chart.
Alright, pretty suss, but that’s just one title.
Ba-dum.
Ba-dum.
You hear that? By God, that’s Jaws’ music! But are there sharks in the water?
Come on. That movie is beloved. If people were collecting sealed VHS, they were definitely collecting Jaws long before an IGS 8.0-9.0 sold for $8,500 in September.
Ehh, not so much. The chart looks pretty similar. Effectively nothing until early summer, and then rapid acceleration in the fall.
**Insert GIF of police chief Martin Brody looking terrified on the beach**
What about Back to the Future? Come on, everybody loves Marty and Doc! Surely, people were on the hunt for sealed copies eons ago, not just in the leadup to an IGS 7.5-8.0 copy selling for $8,500 in October.
Great Scott! Surely not!
Triple digit sales of sealed BTTF VHS didn’t start in earnest until May, and even then, they were predominantly for McDonalds promo copies which are NOT RARE. I’m considering buying one for $40 because I love the movie and I think the concept of buying a VHS at McDonald’s in the mid-1990s is absolutely hilarious.
Yeah, could I get a double quarter pounder meal please? Oh yeah, super size me for sure. And you know what, toss in one of them Back to the Futures while you’re at it.
But it’s not rare, nor is it valuable.
Then, in August and into fall, the four figure sales for copies from 1986 begin.
“Doc! I have to tell you about the future!”
“Huh?!”
“In the middle of 2021, people start randomly and inexplicably spending thousands of dollars on sealed VHS copies of this movie!”
Every single chart of a title that has had a high value IGS sale in the last few months looks a lot like this. Every. One.
Up until the summer of 2021, just flat near zero.
Think about that. In late 2020 and early to mid 2021, one of the hottest speculative moments in collectibles on record, there was virtually NO high-priced activity in sealed VHS.
Look, that doesn’t mean VHS as a high-value collectable is untenable. But it does mean that it effectively materialized out of nowhere without a strong foundation of diehard, true collectors on which to build. The diehard collectors hunt VHS because they like the aesthetic, or they appreciate watching a movie on the technology of the time, or they simply feel nostalgic. They do not care about sealed VHS, and they aren’t interested in the potential price appreciation. And there absolutely is a community of VHS collectors out there: r/VHS has 24.7k "tapeheads", while a "VHS Collectors/Traders" group on Facebook has 8.2k members. The commonality between these two pages? Photos of sealed VHS are a massive rarity.
The importance of sealed VHS and its condition is primarily a construct of collecting enthusiasts and speculators from other categories. The purists don’t confer the same value to whether or not the package remains sealed, or even if it’s in pristine condition.
That is a problem.
Maybe that will change. Maybe some of those twenty five thousand "tapeheads" will have their heads turned towards the gems of the space in mint condition. But for now, however the market materialized, the race to buy up suspected future grails is on, and the reality here is that there are NO floors to fall back on. There is NO track record. If someone buys at the levels derived from those summer and fall graded VHS sales, they’re buying at levels that were basically established overnight. There was no gentle appreciation. There wasn’t even really rapid appreciation. It just…happened.
So if a wave of speculators swoops in, loses interest, and crashes out, there isn’t necessarily a ride-or-die collecting base that will be there to buy up supply at any elevated level.
That makes VHS about as wildly speculative a category into which one can buy right now. Could it take off? The possibility that a population as large as the movie-loving one could turn to the category for collecting purposes is incredibly tantalizing. You easily begin to see how the space levels up quickly. But, that possibility is just that, a possibility, and the excitement to date is based on a very short period of headline sales, of which many will be skeptical.
Of course, we now know that there is significant skepticism over the rise of the video game collectible space. There appear to be a fair number of parallels here – or the very aggressive doubter might more bluntly say that VHS seems to be following the exact playbook that's been alleged of the video game world. Despite the skepticism though, it appears that, at least to some degree, the video game category is here to stay. Of course, there was some collecting base that existed before the meteoric rise, and even that rise was not as fast and as sudden as this one.
For a bit of reference and context, at the first Heritage auction that featured video games in 2019, the highest priced game was just $3,360 and the average sales price was $332.04. Think back to the results of that LCG Auction and some of the eBay results we covered..
It’s preferable when entering a market as new and as speculative as this one that the assets are priced accordingly. But with “grail” type assets already being priced in the high four or even five figures, the spectrum of possible outcomes isn’t as asymmetrical as one might hope.
This is increasingly high stakes speculation, and that requires a huge tolerance for risk.
While collectible categories have soared in many arenas, movies stand out as a category that has not yet seen rabid fanhood manifest itself into a collectible vehicle for the masses. Movie props have been the expensive targets of the very wealthy, movie posters and movie poster art have captured a niche cinephile audience, but to date, nothing has attained broad acceptance and appreciation.
Following the blueprint of sports cards in particular, categories have reached new levels by embracing the standardization and authentication of grading – to add varying levels of scarcity and therefore collectability– while also finding new arenas of exchange.
VHS appears set to tread that well worn path. But, we’re left to wonder if taking shortcuts without the backing of a steadily growing and truly devoted collecting base might set the table for lost money.
The opportunity to act in the formative stages of a new collecting category is immensely intriguing. But acting takes guts. Major guts. Or as Taka Tanaka put it in Major League, which coincidentally may be a collectible VHS itself: “marbles.” The academic term would be risk tolerance, and the layman’s explanation would be that this is a category you shouldn’t invest anything in unless you can afford to lose it….or in this case, unless you’d be okay with it if all you could do with that VHS is pop it in a VCR and have a nice little Friday movie night.
It may be a product of the world in which we presently live that a category like this one can spring up overnight and stand the test of time. It could also be the case that some are trying to fit a square peg in a round hole – forging a valuable, collectible market where there isn’t genuine interest.
I guess we’ll find out down the road.
Roads? Where we’re going, we don’t need roads.
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