DISNEY TO RELEASE 26 CLASSICS ON VHS, DVD.

Byline: Dave McNary Staff Writer

The Walt Disney Co., stung by a slumping performance in its lucrative home video business, announced Wednesday a major loosening of its policy of keeping animated blockbusters out of circulation.

The entertainment giant will make 26 of its classic titles, including ``Pinocchio,'' ``Peter Pan'' and ``Lady and the Tramp,'' permanently available over the next two years on both the VHS and DVD formats.

It will create a ``Platinum Collection'' of 10 of its best sellers, including ``The Lion King'' and ``Aladdin,'' and rerelease one each fall before retiring it for 10 years. The platinum line will start in 2001 with ``Snow White'' on both VHS and DVD.

Disney's previous policy on releasing animated home videos generally called for limiting the window of availability and then waiting as much as a decade before rereleasing a title. The company held off on a major rerelease this year in order to build demand for older titles, but doing so pulled down fiscal 1999 profits in the Studio Entertainment division by 85 percent to $116 million.

Disney, which has been slow to issue on the increasingly popular DVD format, also announced Wednesday that all future home video titles will be released simultaneously on VHS and DVD.

``We believe that DVD represents a huge opportunity for our company,'' said studio chief Joe Roth in a statement released during a meeting of about 150 analysts at Disney headquarters in Burbank. ``Just as with the VHS format, which saw incredible growth of video unit sales as VCR penetration rose, DVD demand will surge as penetration levels hit critical mass.''

Tom Adams of Adams Media Research said the new strategies appeared to be sensible responses to a changing market. ``They're giving something up in terms of making a big event of new releases, but they're still not saying that all releases will be available all the time. It's a good middle-of-the-road strategy.''