Red Queens and Increasing Returns

For my Science Fiction assignment, first thing I did was to search my collection of DVD's for the "Minority Report." However, I did not find it, so I found myself at a video movie store buying a resale copy to replace my missing copy. Although I typically used Netflix to watch movies via the Internet, I wanted the ease of going back to the video to review a scene when needed. Hence, I purchased another copy of the movie. The best part is that I paid only $3.99 for the copy. I guess buying an outdated movie has some merit.

Why use video on demand? Video on demand has the ability opening up the a wider array of movies to consumers with high definition quality and easy accessibility. However, video on demand has forced some changes to occur in the DVD rental market. The most visible change is the sudden closure of video rental stores like Blockbusters, Hollywood movies and etc. Consumers found that the ease of video on demand or even Netflix shop online and return at ones leisure has become the norm.

Although both venues are of the same market, people have gravitated towards video on demand because of its accessibility and the fact that they do not have to worry about returning the product. Hence, I would describe this occurrence as increasing returns, as the products are the same in terms of what they offer consumers. One can rationalize the DVD slowdown to consumers belief that the cost of video on demand is less than having to gas their car, go out to the store, shop down countless aisles of DVD's, and having to return prior to a due date to avoid late charges. Just these facts alone have contribute to the downfall of DVD rental stores. Finally, with video on demand, consumers are able to get newly released much faster than store released dates.

I believe that video on demand rekindles the concept of using a central data facility to store thousands of videos which consumers have the ability to call up for use on their personal televisions or computers. The videos are stored at a remote location which receives a request via a network and the information is called up from a central data facility for the viewer of the movie.

However, I do not believe that DVDs will become obsolete as there are still those individuals out there like me who prefer to collect movies for a personal library. Besides, the new Blu-ray DVDs have provided consumers with the same viewing capabilities of HD movies.

References

Arthur, W. B. (1996). Increasing returns and the new world of business. Harvard Business Review, 74(4), 100-109.

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