Increasing return is one of the forces that explains how technology can emerge (Thornburg, 2013). Increasing return is the process in which some technologies that are ahead continue to be ahead, while innovations that lose advantages keep losing them even more (Arthur, 1996). The competition between DVDs and video-on-demand, that has been in place since 2010, is an example of increasing return.
In the 1990s, it was common to have a wonderful collection of DVDs or rent them in Blockbuster. However, by the end of the the first decade of this century, physical DVD became highly unpopular. Blockbuster had began losing its customers and went bankrupt in 2010 (Satell, 2014). Netflix, an online DVD store, replaced Blockbuster: in 2011, the number of Netflix DVD subscribers reached 13.93 million. Nevertheless, when the Internet became widely accessible and more and more individuals preferred to watch movies online, the number of Netflix DVD subscribers went down to slightly over 380 thousand by the beginning of 2016 (Statista, 2016). Currently, DVD industry continuing losing its advantages while video-on-demand continues to be ahead.
The ability to get access to a movie immediately without waiting until the needed DVD arrives made video-on-demands widely spread. In 2012, the number of Netflix streaming videos subscribers was 25.1 million and reached 27.2 million by the beginning of 2016 (Statista, 2016). Netflix is just one of numerous current websites that offers online movies. For example, I watched Star Trek (2009) on Amazon using our daughter’s Amazon Prime account that allows for streaming videos from the Web.
Thus, emerged physical DVDs became obsolete, were replaced by online DVDs, that are becoming obsolete now, being replaced by videos-on-demand. These processes, in accordance to McLuhan’s laws, occur simultaneously (Thornburg, 2013). Physical and online DVDs carried with it the seed of destruction “paving the way” for video-on-demand to follow.
Arthur, W. B. (1996). Increasing returns and the new world of business. Harvard Business Review,74(4), 100−109.
Satell, G. (2014). A Look Back at why Blockbuster Really Failed and why it didn’t have to. Retrieved from http://www.forbes.com/sites/gregsatell/2014/09/05/a-look-back-at-why-blockbuster-really-failed-and-why-it-didnt-have-to/
Statista. (2016). Number of Netflix DVD Subscribers in the US. Retrieved from http://www.statista.com/statistics/250940/quarterly-number-of-netflix-dvd-subscribers-in-the-us/
Thornburg, D. (2013c). Emerging technologies and McLuhan's laws of media. Lake Barrington, IL: Thornburg Center for Space Exploration.