Module Five: Red Queens, Increasing Returns and the War on DVD/Video on Demand

In order to obtain one of the films based on the books by Philip K. Dick in module 4, I began first with the resources I have immediate access to.  I reviewed the “guide” listings of movies scheduled for broadcast on cable television, which produced two of the Dick films.  After reading each review, I chose Minority Report; set it to record digitally via TIVO and watched it the following day after it was recorded for me.

There was a time when the only option to seeing a movie was to rent one from a video store or purchase it.   Technological advancements now allow the very same film to be streamed or downloaded immediately to one’s television or personal computer. This emergence in technology has also led to competition between DVD sales and Video on Demand.  The current competition between Video on Demand and DVDs is an example of increasing returns (Laureate Education, 2009). Since high speed internet is now more affordable, with larger screen size displays, and with superior image and graphics quality than was available in the past, more people use online resources than ever before, causing the video rental business to slowly become obsolete.  This is easily represented in the competition between Netflix and Blockbuster.

Netflix began in 1997, moving to subscription services in 1999, and now with customer subscriptions including both rented movies delivered in the mail, as well as streamed movies through TIVO, Wii, Xbox 360, Apple’s iPad, iPhone and iPod Touch devices as well as select brand-name televisions.  While Netflix was concentrating on video on demand business, Blockbuster, as its primary competitor, did not expand to the video on demand market soon enough, which ultimately led to their demise as they filed for bankruptcy in 2010.  As the transition was made to digital format in the United States in June of 2009, many Americans have flocked to stores to purchase updated televisions, many of which are fully equipped with internet connection, and ready for streaming with automatic access to streamed or downloaded content, for example, my Samsung Blu-Ray player came equipped with recommended internet TV applications:  Pandora internet radio, VUDU, Netflix, and Blockbuster, with capabilities to access Twitter, Google maps, You Tube videos and more.  The TIVO offerings on my television include Blockbuster, Amazon Video on Demand, Netflix, You Tube, Rhapsody, Pandora, Live 365, and Podcaster.   These companies will all reap the benefits of being readily available and “on the screen” as customers tune in to their newly-acquired television sets.  The law of increasing returns (Laureate Education, 2009) suggests that as one technology is chosen, customers continue with it, contributing to even more growth for the first-chosen technology.

Video on demand rekindles the movies at home concept.  The fact that companies such as Netflix continue to “rent” movies by delivering them to mailboxes, suggests that DVDs are not becoming obsolete; one only has to look at the shelves in Walmart to realize they continue to be sold.   As image quality becomes better and better, Blu-Ray DVD will obsolete the basic DVD however.

Vint Cerf: It’s all about Video on Demand

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.

Cerf, V. It’s all about video on demand. Retrieved from http://www.youtube.com/watch?v=KB9dAFkKlBo

What you need to know about the digital tv transition.  Retrieved from http://www.dtv.gov/

Laureate Education, Inc. (2009). Emerging and future technology. Baltimore: Author.

Newman, R. (2010). How Netflix killed Blockbuster. US News & World Report: Money. Retrieved from http://money.usnews.com/money/blogs/flowchart/2010/9/23/how-netflix-and-blockbuster-killed-blockbuster.html.

Netflix. Retrieved from http://movies.netflix.com

Samsung Blu-Ray DVD. Retrieved from http://www.samsung.com/us/video/blu-ray-dvd/

Thornburg, D. (2008c). Red Queens, butterflies, and strange attractors: Imperfect lenses into emergent technologies. Lake Barrington, IL: Thornburg Center for Space Exploration.

TIVO Retrieved from http://www.tivo.com/