DVDs propel Blockbuster growth

DVDs offer better quality sound and pictures than VHS

The world's largest video rental chain saw its earnings rise by 92% in the third quarter, helped by steady growth of DVD rental revenues.

The news will likely provide a further boost to shares in Blockbuster, which have nearly tripled since the beginning of the year.

Last month, Blockbuster said it was getting rid of 25% of its VHS tape library to make way for DVDs, a move that is expected to cost it about $450m (£305m).

If this and other charges are not included, the company's earnings were $43.4m, compared with $22.6m a year ago.

Rosy predictions

Blockbuster, which has about 7,800 stores worldwide, expects sales will continue to grow in the fourth quarter as it continues the shift to higher-margin DVDs.

DVDs, which offer higher quality pictures and sound than VHS, have boomed in popularity as the price of their players has fallen.

Sales of players in the US are expected to reach 14 million this year.

The image quality and extra features offered by DVDs, as well as their simplicity of use, appeal to consumers.