Obtaining digital media including video and music requires little effort and money. For a recent project, I rented “Blade Runner” using an app on my iPod Touch. Then, I connected my iPod to my home theatre system and enjoyed surround sound and HD image quality. I did not purchase or rent a DVD, because video on demand (VOD) has displaced DVD rental for my personal entertainment.
The future of the fierce competition between DVD and VOD is explained by the concept of increasing returns rather than red queens. According to Thornburg (2010), red queens describe the competition between two technologies that continually evolve to stay strong in the market. At first glance, one might argue that the battle between these two technologies exhibits red queen forces. Agreeably, these two technologies emerged at relatively the same time and continued to develop throughout time (Anderson, 2004). Yet, the current state of DVDs causes me to believe that the red queen force is no longer relevant.
Similar to red queens, increasing returns also acknowledges the fierce competition between two technologies. However, in this race, one technology ultimately takes the prize replacing the competition due to multiple outcomes including adoption of outside influences (Arthur, 1999). While DVD purchases decreased in 2010, the VOD market increased by 20% demonstrating critical mass (Graser, 2011). Outside agents including gaming systems, iTunes, smartphones, wireless internet, and TiVo are creating potential adopters due to the merge with VOD services (Tynan, 2008). DVDs began on top, however, as users gain familiarity with technologies in the digital revolution, VOD services appeal to a wider audience. Pretty soon, VOD will push out DVD and Blu-Ray. VOD offers higher efficiency, affordability, and portability. The driving force between the battle of VOD and DVD results from increasing returns due to the impact of economic influences and the predictability of the replacement of DVDs (Arthur, 1999).
Using McLuhan’s tetrad model, DVDs are located in the obsolete category, because VOD technology has replaced DVDs in many situations. Additionally, VOD represents reversal as the future of video entertainment is shifting from physical devices to digital streaming (Seals, 2011). Markets would be wise to use the tetrad model to capitalize on the video streaming and budget according to the downfall of DVDs.
References
Anderson, C. (2004). Tech’s long tail [Video]. Retrieved from http://www.ted.com/index.php/talks/chris_anderson_of_wired_on_tech_s_long_tail.html
The future of the fierce competition between DVD and VOD is explained by the concept of increasing returns rather than red queens. According to Thornburg (2010), red queens describe the competition between two technologies that continually evolve to stay strong in the market. At first glance, one might argue that the battle between these two technologies exhibits red queen forces. Agreeably, these two technologies emerged at relatively the same time and continued to develop throughout time (Anderson, 2004). Yet, the current state of DVDs causes me to believe that the red queen force is no longer relevant.
Similar to red queens, increasing returns also acknowledges the fierce competition between two technologies. However, in this race, one technology ultimately takes the prize replacing the competition due to multiple outcomes including adoption of outside influences (Arthur, 1999). While DVD purchases decreased in 2010, the VOD market increased by 20% demonstrating critical mass (Graser, 2011). Outside agents including gaming systems, iTunes, smartphones, wireless internet, and TiVo are creating potential adopters due to the merge with VOD services (Tynan, 2008). DVDs began on top, however, as users gain familiarity with technologies in the digital revolution, VOD services appeal to a wider audience. Pretty soon, VOD will push out DVD and Blu-Ray. VOD offers higher efficiency, affordability, and portability. The driving force between the battle of VOD and DVD results from increasing returns due to the impact of economic influences and the predictability of the replacement of DVDs (Arthur, 1999).
Using McLuhan’s tetrad model, DVDs are located in the obsolete category, because VOD technology has replaced DVDs in many situations. Additionally, VOD represents reversal as the future of video entertainment is shifting from physical devices to digital streaming (Seals, 2011). Markets would be wise to use the tetrad model to capitalize on the video streaming and budget according to the downfall of DVDs.
References
Anderson, C. (2004). Tech’s long tail [Video]. Retrieved from http://www.ted.com/index.php/talks/chris_anderson_of_wired_on_tech_s_long_tail.html
Arthur, B. (1999). Competing technologies, increasing returns, and lock-in by historical events. The Economic Journal, 99(394), 116-131. Retrieved from http://www.jstor.org/pss/2234208
Graser, M. (2011, January 6). Blu-ray hits mainstream in 2010: Players, discs hit critical mass in US homes [Web log comment]. Retrieved from http://www.variety.com/article/VR1118029848?refCatId=14&ref=related
Seals, T. (2011, January). Netflix commits DVD-OCIDE: Targets cable VOD [Web log comment]. Retrieved from http://www.vision2mobile.com/news/2011/01/netflix-commits-dvd-ocide-targets-cable-vod.aspx#
Thornburg, D. (2008c). Red Queens, butterflies, and strange attractors: Imperfect lenses into emergent technologies. Lake Barrington, IL: Thornburg Center for Space Exploration.
Tynan, D. (2008). The 10 most disruptive technology combinations [Web log comment]. Retrieved from http://www.pcworld.com/article/143474/the_10_most_disruptive_technology_combinations.html
this is definitely an example of the evolution of technology...cell phone apps definitely have served to obsolete many things...I even pull up coupons on the cell phone instead of clipping them any more. Using them for movies is just one more way to keep my kids occupied while waiting in the doctor's office or some other appointment where they need to remain seated the whole time...
ReplyDeleteMarci:
ReplyDeleteI agree with you. I think this falls into the category of Increasing Returns. Arthur (1996) stated that DVDs compete with many VOD companies. Therefore, if a product or a company or a technology--one of many competing in the market--get ahead by chance or a clever strategy, increasing returns can magnify this advantage, and the product or company or technology can go on to lock in the market(p. 1).
Great Post!!! Although you brought about a great argument, I am still leaning towards the Red Queen theory. As I stated in others post, Blue Ray technology is keeping DVD’s in the game. Also most on demand companies do not offer streaming for a lot of new movies until they have been on the shelves for a while.
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