While the last machine is set to be manufactured in China this month, in Australia and elsewhere, the VHS tape, and its attendant packaging, is fast becoming as collectable an item as classic vinyl LPs.

Fan clubs and collectors' pages flourish on Facebook and elsewhere. On eBay some titles are being offered for sale for thousands of dollars, and at swap meets around the country hundreds of people turn up to share their love of a medium that was always bigger on convenience than it was on quality.

"People have a drink and swap war stories, and then swap tapes over beers – what could be more VHS than that," says Zak Hepburn, manager of the Astor Theatre in St Kilda and an avid collector, with a home library of between 400 and 500 tapes.

Hepburn says the first swap meet he was involved in two years ago drew about 50 people; now, the quarterly gatherings draw up to 200. While he obviously has a professional interest, not all collectors do; one of the biggest collectors he knows drives trucks for a living.

What they all share is a deep nostalgia for the era in which the VHS tape was the gateway to a world of discovery, when a trip to the video store could take you from the hit list of titles you knew you wanted to watch to an undiscovered gem, or a sick slasher film recommended by the video store guy.

"VHS was the great equaliser," Hepburn says. "You could have a low-budget tape sitting next to a high-end Hollywood release on the shelf. It was a classless society inside that store."

Whatever the budget of the film, they all suffered from the indignities VHS wrought upon them: image deterioration, tracking issues, poor sound quality, wide-screen images that were brutally cropped to fit the frame, or not cropped at all, so that a chunk on either side of the picture simply fell off the edge.

"It's the worst quality of any movie format," Hepburn says. "It's the real irony of the collector culture. Vinyl or other audio media have arguably better quality than digital, but this was always the cheapest medium. It doesn't hold up, but it's how a lot of people were introduced to movies."

Some of the most expensive titles in VHS-land are limited-release Disney animations. A "black diamond" edition of Beauty and the Beast, for instance, could set you back up to $10,000. A set of four such titles – The Sword in the Stone, Sleeping Beauty, The Lady and the Tramp and The Little Mermaid (with "banned original artwork") – is currently being advertised by a WA-based seller for $25,000.

But by far the biggest market is in the trashy end, the horror, sci-fi and exploitation films that lurked in the darkest corners of the video store.

Some of these films were SOV – shot on video – and necessarily low-budget and low quality, but every now and again turned up a gem. Others have simply fallen out of circulation, never selling enough to warrant the transition to more modern formats or dropping off the radar because a studio's rights to them had expired. Others were always destined to live in the cultish margins, like the rape-revenge cheapie Act of Vengeance that, at $500, remains Hepburn's most extravagant purchase.

Last year, no less a collector than Yale University bought a 2700-title library, much of it in the trashier realm, from a collector in Ohio. Yale librarian David Gary described the collection as "the kind of material that lets you get at the cultural id of an era".

Whatever the shortcomings of VHS, it's hard to imagine anyone saying that in 30 years' time about an iTunes algorithm.