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.
References
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.
Hi Lena:
ReplyDeleteThe rise of on-demand streaming video and decline of physical DVDs is interestingly curious. I often wonder if increasing returns will impact music in the same manner. In fact, last weekend I went to Best Buy to purchase a CD for my friend's mother for her 87th birthday. She is a retired music teacher who worked in DC public schools and Memphis, TN public schools for over 40 years combined. Her love of music has not waivered in her senior years. She has a collection of CDs, and of course, that is her preference. While I was browsing the CD selection at Best Buy what became apparent very clearly was the diminished volume. I remember when I bought a new CD almost every Tuesday, that was over seven years ago (the day music dropped) and the number of aisle and sections of music in Best Buy were endless. This is no longer the case. It didn't take me long to find a birthday CD because there were far too few choices. Do you forsee the driving force of increasing returns impacting CDs? If so, with what, and how?
Hi Linette,
ReplyDeleteIt is a very interesting story. I think you might be right. The driving force of increasing returns is impacting CDs. More and more people buy music online and download it on their cell-phones or other similar digital devices. I guess on the next step, individual's cell-phones, watches, or other wearable technologies will begin create new music-on-demand right on the spot:)
Lena
You're clearly thinking like a futurist. I agree
ReplyDelete