Are sealed VHS tapes the next alternative asset class?


The era of COVID has been marked by the rise of new alternative asset classes.

As interest rates on savings accounts in banks have been infinitesimal, and human interaction has been limited, collectors have turned to more fun ways to make their money grow.

Cards and Memories were joined by NFTs, Cryptopunks and Bored Apes recording outrageous returns for early users who cashed in.

And more recently, nostalgic sealed items, namely video games, have started to take off. The best games, ranked by video game reviewer WATA, have sold for hundreds of thousands of dollars. The cream of the crop is in the millions of dollars or more.

So what’s the next step? Is this a new NFT animal or could it be another piece of the past?

Kohl Hitt is betting on the latter.

His family business has always created checkout items at big box stores like Walmart, but he recently focused on building a business to categorize old VHS tapes.

Hitt has saved tens of thousands of dollars, which serves as a reference guide for what is graded, and his wealth of knowledge makes him ideal for getting started in the business. Hitt’s company, VHSDNA, has just started classifying tapes, the second company to do so.

Competitor IGS recently announced a two-week hiatus in submissions until September 13 to catch up with volume and hire more employees.

EBay sales of coveted debut film VHS tapes are showing increased interest. Months ago, a collector could get a sealed first version of an iconic film for $ 100. Now that movie could cost $ 1,000 or more.

“I think that makes sense because these are smaller movie posters,” said Hitt, whose VHSDNA offers to categorize and encapsulate a VHS tape for $ 98 for a guaranteed month, $ 138 for that. a collector gets it back in a week.

VHS tapes seem to make sense from a collection point of view because, like video games, they were meant to be opened and played and so the scarcity factor is there.

So what does Hitt expect to be hot?

Early releases of ‘Star Wars’, ‘ET’, ‘Karate Kid’, ‘Rambo’ and ‘Back to the Future’, to name a few.

IGS has three grades of box and three grades of seal. Hitt’s system is simpler. There is only one number on its Lucite boxes, which contain an overall score of the conditions of the sleeve, flaps, shine and seal. On the back of the card, Hitt adds some fun facts about the contents of the tape and a rundown of the terms.

If there is one thing that will stop the spread of VHS tapes as a collector’s item, it may be the complexity. First press tapes don’t say “first press” and education is necessary. But second-generation video game collectors were able to familiarize themselves with the variants to make informed decisions.

First press tapes can often be noticed by making sure the copyright on the tape is a year or two after the film is released. The most common “Ferris Bueller’s Day Off” sealed tape, for example, dates from 1992, but the first press dates from 1986, the year the film was released.

And by spending and earning money, education becomes an incentive. There are 14 versions of ‘Star Wars’, Hitt notes, from 1984 to 1992. Buying the wrong version could make the difference between a tape worth $ 500 and one worth $ 15,000.

With the controversy swirling over which video game insiders at WATA have their games evaluated, Hitt wants to assure the public that the evaluation of his own games and their sale is not in sight.

“You will never see anything that I own for sale,” Hitt said.

Hitt also says he doesn’t think the rarity of iconic sealed films will ever be ruined by a big find.

“I’m 85 to 90 percent sure we’ve seen what’s out there,” Hitt said. “It’s not like you’re going to see some massive First Edition sealed tape storage finds popping up.”

Last month, an early version of a sealed “Star Wars” sold for $ 12,000. This week, a “Star Wars: Return of the Jedi” sold for $ 7,026. For old VHS tapes the numbers sound mind-boggling, but for those in the market who believe it, this is just the beginning.

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