Module 5: Red Queens and Increasing Returns

Module 5:  Red Queens and Increasing Returns

When you decided to obtain a DVD for your science fiction assignment in Module 4, where did you go to find a movie based on a Philip K. Dick book? Did you rent or purchase a DVD, or did you view it digitally on your computer using Netflix or a similar vendor of video-on-demand?

In trying to locate a DVD for my science fiction assignment in Module 4, based on Philip K. Dick’s book, I went to www.Amazon.com to purchase one or more of the suggested movies. It was going to take 3-5 business, and I did not have the time because I was preparing myself to attend my third residency. I decided to visit three major retailers: Wal-Mart, Target, and Best Buy. The only store that had at least two was Best Buy. As an educator and a scholar, I wanted to purchase and add these movies to my DVD collection in order to use for future learning and teaching. The DVD movies: Total Recall produced in 1990 and Next, produced in 2007 would not play in my laptop computer purchased in 2006 for $2,500.00. When I got home the following week, I immediately tried both videos in my desktop computer DVD drive which I purchased in 2010 for $1,500.00. Unfortunately, I was only able to access the movie Next. The journey of obtaining a DVD for our science fiction assignment showed how technologies advance over times such as my laptop and desktop computers. Thornburg (2009) concluded that Moore Law is prevalent today because a trend in technologies in which the power of a technology doubles about every 12 months and becomes less expensive to purchase.

Between my job and taking courses at Walden University, I have not used Netflix or video-on-demand services for viewing movies. I only view movies for educational purposes from the library or ask a friend to borrow his/her copy.

Is the current competition between DVDs and video-on-demand an example of increasing returns or Red Queens? Justify your response with sound reasoning and specific examples.

Thornburg (2009) described increasing returns as, two innovations hitting the market at about the same time and by chance one technology gets locked in, and the other technology becomes extinct. He stressed that possibly that one captured people imagination more than the other and that the best technology does not always wins. Arthur (1996) argued that increasing returns are the tendency for that which is ahead to get further ahead, for that which loses advantage to lose further advantage.  For example, Thornburg cited Arthur’s video tape recording between Panasonic format (VHS) and Sony format (Betamax). Although Sony’s Betamax format was high image quality, and superior to Panasonic suboptical formal (VHS), Panasonic was able to cut a deal with film producers in converting to their format. This resulted in Sony not having the media impact and was force out of the market by Panasonic.

Thornburg (2009) defined Red Queens as huge competition between two strong technologies in the process and all other competitors are left behind these two technologies. Thornburg mentioned that Lewis Carol reviewed the Red Queens as Alice in Wonderland who has looked through the glass and ran as fast as she can. Thornburg stressed that Red Queens are a competitive force that drives emerging technologies. For instance, Thornburg mentioned that Netscape Navigator and Microsoft Internet Explorer browsers, both were available at the same time. Each browser was free to use for the Internet. Netscape and Microsoft were trying to stay a step ahead of each other in order to dominate the market and market shares. The constant battles and conflicts between these two browsers caused other competitors to fall behind. Another example that Thornburg discussed was Microsoft platform verses Apple platform. He revealed that Steve Jobs stated “a BMW does not sell as well as a Chevrolet. I do not care. I want a BMW.” Despite the fact that BMW is of a higher quality than the Chevrolet, Thornburg argued there is still a market for Apple, and Microsoft platform and the two will continue to have battles and conflicts among each other.

Illustration by John Tenniel of the Red Queen lecturing Alice for Lewis Carroll's "Through The Looking Glass."

Based on my analysis and examples of increasing returns and Red Queens, the current competition between DVDs and video-on-demands are examples of increasing returns and Red Queens.

Where do you think DVDs and video-on-demand are on the four criteria of McLuhan’s tetrad?

I think that DVDs and video-on-demand are both rotating through each quadrant of McLuhan’s Laws of Media and battling out their conflicts in order to stay on top of the market. For example, Netflix allows you to select a movie anytime and anyplace. The new movies are available quickly than DVDs. I think that it really depends on what people want at a particular time. Heymann (2011) stressed that the SNL Kagan study, the Economics of TV and Film revealed that consumers are now opting to sign up for streaming and/or rental services, like Netflix. They are using video on demand (VOD) services more and more, as they discover these services can be cost effective.

Unfortunately for studios, according to SNL Kagan, the revenue from VOD has not yet offset the resulting drop in DVD sale revenue, which was their top earner for more than a decade now.

Heymann (2011) revealed “SNL Kagan tracked 415 titles in our database that were released on DVD in 2010, and among those titles wholesale revenue dropped by 43.9% from $7.97 billion in 2009 to $4.47 billion in 2010,” said a spokesperson. “It is important to note that this does not include Blu-ray revenue, which grew significantly in 2010. It should also be noted that this sample of the video market does not include library titles, direct-to-video titles and TV on DVD, as well. When looking at the video retail market as a whole, consumer spending only declined 10.8% to $11.86 billion in 2010.”

Heymann (2011) indicated Fox claimed victory once again in 2010 in terms of market share, thanks primarily to Avatar. The distributor had 15 titles in the study, and those titles took in $605.9 million from 30.1 million DVDs shipped.



Number one DVD in 2010, shipping over 10.3 million units and making $207.5 million in revenue.

References

Arthur, W. B.  (1996).  Increasing returns and the new world of business.  Harvard Business Review, 74(4), 100−109. http://web.ebscohost.com.ezp.waldenulibrary.org/ehost/resultsadvanced?sid=465bbda8-6e62-40c4-8075-1fc8504c8516%40sessionmgr104&vid=2&hid=112&bquery=Increasing+returns+AND+the+new+world+%22of%22+business&bdata=JmRiPWJ0aCZjbGkwPUZUJmNsdjA9WSZ0eXBlPTEmc2l0ZT1laG9zdC1saXZlJnNjb3BlPXNpdGU%3d

Heymann, G. (2011).  Will video on demand services like Netflix make DVDs a thing of the past?

http://technology-headlines.com/2011/05/26/will-video-on-demand-services-like-netflix-make-dvds-a-thing-of-the-past/

http://www.fromoldbooks.org/LewisCaroll-AliceThroughTheLookingGlass/pages/036-red-queen-chastises-alice/547x680-q75.html

Laureate Education, Inc. (Executive Producer). (2009). Evolutionary technologies. Baltimore: Author.

https://class.waldenu.edu/webapps/portal/frameset.jsp?tab_tab_group_id=_2_1&url=%2Fwebapps%2Fblackboard%2Fexecute%2Flauncher%3Ftype%3DCourse%26id%3D_967488_1%26url%3D

Laureate Education, Inc.  (Executive Producer).  (2009).  Increasing returns.  [DVD].  In emerging and future technology.  Baltimore:  Author.

Laureate Education, Inc.  (Executive Producer).  (2009).  Red Queens.  [DVD].  In emerging and future technology.  Baltimore:  Author.

Michele

Module 5:  Red Queens and Increasing Returns

I responded to the following community members:

Timothy Weaver

http://weave1-weave1.blogspot.com

Kevin Klein

http://kklein66.wordpress.com/

Michele