Module 5 Assignment: Red Queens and Increasing Returns

Lewis Carroll introduces the Red Queen character, in Through the Looking-Glass, as a mentor of sorts. The Red Queen informs Alice that in their fantastical land “It takes all the running you can do, to keep in the same place” (Laureate Education (Producer), 2014g). Brian Arthur (Laureate Education (Producer), 2014e) coined the phrase “increasing returns” to represent the phenomenon that results when a population chooses one of two competing products over the other, resulting in the extinction of the product that was not chosen. We see this scenario play out in the war between the two technologies, DVD and Video on Demand.

The rivalry between the DVD and Video-on-Demand technologies represents a combination of both the Red Queen and Increasing Returns phenomena; and, the dilemma is indicative of a competitive business environment where one company is pitted against another. And, as Dr. Thornburg (2013d) posits, the “winner” of the ultimate duel is not necessarily the company with the best quality or cheapest product; it is the organization that manages to outlast all other companies irrespective of the odds, as a result of public choice. The evolutionary path of the digital technology, at this stage, positions Video-on-Demand at the enhancement phase of the McLuhan tetrad, while the DVD is on a downward spiral to obsolescence.

Extension/Enhancement

Thornburg (2013c) describes an enhancement technology as one that leads to the extension or amplification of some type of functionality that the user population possesses. Video-on-Demand (VOD) is a system that enables viewers to use their computer, interactive TV, or mobile device to access their preferred choice of filmed entertainment. Cable, satellite, and Internet technologies serve as the conduit for the delivery of the product to the customer. VOD has dramatically changed the entertainment industry. The production of movies has been impacted by the increased availability to viewers that has resulted in an expanded product variety (Tan, Netessine, & Hitt, 2015). Consequently, the ability to download or stream a movie at will, irrespective of the time or location of the customer who wants to view the movie, provides the ultimate convenience for the customer.

Closure/Obsolescence

 DVDs became the next generation of digital disc storage at the beginning of the 21st century. DVDs were a bigger and faster alternative to the compact disc and earlier technologies like CDs which had two major functions, providing music and storing readable data. Equilibrium is a state that results in the balancing act of opposing forces. In a similar manner, a seesaw does a balancing act when one person is raised; the person on the opposite side is lowered. Economically, when the market share of one product increases, the market share of an competitive product decreases. The end of the Blockbuster era was precipitated by customers who were willing to pay for 3.4 billion streaming video views in 2012.

DVDs have become an archaic digital form in the entertainment industry. Movieland continues to provide the customer with an ever-changing platform for displaying its videos. And this is the result of a cyclical pattern. The customer initially viewed movies in a public forum. Subsequently, the customers would go to a public forum and rent a movie. This act was followed by a plethora of customers who would buy a movie. The vehicle of access for the digitized movies was generational; first beta, then VHS, CDs, and DVDs. Now, the customer is able to access movies in a pay-for-service platform that delivers the content to the customer anywhere and at any time. Movies were offered in a public forum, the local movie theater. Then the movies were rented via a local video rental facility which was transformed into a local video store. Now the videos are housed in the cloud and are accessed via the Internet, cable, or satellite technologies.

References:

Laureate Education (Producer). (2014e). David Thornburg: Increasing returns [Video file]. Baltimore, MD: Author.

Laureate Education (Producer). (2014g). David Thornburg: Red queens [Video file]. Baltimore, MD: Author.

Rick, C. (2012). Streaming video on-demand to be king of entertainment as disc fall? Retrieved at Streaming Video On-Demand to be King as DVD Discs Fall? http://tubularinsights.com/streaming-video-ondemand-vs-dvd/#ixzz4P67GgGx4

Tan, T., Netessine, S., & Hitt, L. M. (2015). An Empirical Study of the Impact of Product Variety on Demand Concentration.

Thornburg, D. (2013c). Emerging Technologies and McLuhan’s Law of Media. Lake Barrington, IL. Thornburg Center of Space Exploration.

Thornburg, D. (2013d). Red Queens, Butterflies, and Strange Attractors: Imperfect Lenses into Emergent Technologies. Lake Barrington, IL. Thornburg Center of Space Exploration.

 

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3 thoughts on “Module 5 Assignment: Red Queens and Increasing Returns

  1. Renee

    As I look at your post I am reminded that marketing strategy is one way to achieve a Red Queen or increasing returns. It may be what accounts for what we see sometimes when the weaker technology edges out the the better technology.

    Again the matter of convenience is raised.I remember as a child I used to run home to catch the signing on of the television station. Broadcasting started about 4pm each evening and ended at midnight. At that time I watched what the station was broadcasting. Today we watch on demand. VOD rekindles personalized entertainment and entertainment upon request. For example in the Shakespearean era, the royals would summon the playhouse to Court to present their latest play. VOD is summoning to Court in high tech.

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  2. Thanks Victoria. I believe that DVDs are outdated technology. I must admit that my view may be a bit skewed because in the IT arena, DVDs have been replaced by flash drives for the most part. Over the last three years, computer makers have been phasing out the DVD drive on computers – most applications are cloud-based. What I do not like about cloud-based services is that instead of purchasing and owning an application product, you pay a monthly fee to use it. Matthew mentioned the renting of movies in his post. I admit that I was surprised that you stated in your post that you believe that DVDs will still be around for five years. Now in retrospect, I can see that I was focused on the IT industry and not the film industry. You brought up an excellent point, the two industries are separate and distinct. It will be interesting to watch how long DVDs will be around in movieland. Great comment!

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  3. Renee,

    Wonderful post. Do you think DVDs will eventually stop being produced because of the accessibility of VOD services?

    Victoria

    Like

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