Thursday, May 5, 2016

Module 5 – Red Queens, Increasing Returns and the current competition between DVDs and Video-On-Demand (VOD)

Understanding the forces that drive technology is fascinating. Today we have so many choices in viewing movies from the comfort of our home. From going out and renting or purchasing the latest DVD, Blu-ray disc or the latest iteration of video media, Ultra 4K Blu-ray discs to several Video on Demand (VOD) options, such as iTunes and Amazon Prime to Netflix and Hulu, there has never been so many available options as there are currently (Valentini, 2012). As a Ph.D. student, studying Technology Education, one of my recent course assignments prompted us to view a Science Fiction movie based on a story by one of the leading Sci-Fi authors, Philip K. Dick, with the intention of identifying emerged, emerging, and not yet emerging technologies. For my assignment, I picked the movie Paycheck, starring Ben Affleck. Viewing this movie through the lens of picking and placing the technologies featured within the movie, into the three aforementioned categories of technology emergence was a very conscious process for me. I believe I became more enthusiastic about the future, in regard to our options of emerging technologies used in assisting us in life from viewing this movie and conducting research on these technologies.



In looking through the wide array of DVD and VOD options to view the movie Paycheck on my new 4K Sony flat screen TV, I really had to do a fair amount of personal research, based on the criterion of price, convenience, video display and sound quality to choose the best viewing option (Valentini, 2012). To be honest, I really did not take into consideration rental or purchase of a DVD or Blu-ray disc, for three reasons. First, I have not used a physical DVD in the last five years or so, secondly because I do not own a Blu-Ray disc player and lastly, from my research, I knew I did not have to leave the comfort of my home to find a means of viewing this movie. In fact, I have not purchased a new DVD since iTunes added video content, Movies, Music Videos and TV series episodes, back in early 2008.

I remember being very excited, back in 2008, that I could download a purchased movie to my Apple MacBook Pro or Apple TV and then save the media file to my Terabyte (TB) Apple Time Capsule, in a folder I labeled “My Video Media Library” to watch anytime I would like. Well, I am currently on my second TB Time Capsule, dedicated to movie and music media storage and going strong. I have recently started using Apple’s iCloud service in conjunction with my iTunes account and other streaming VOD services such as VUDU and Crackle and their cloud storage services, to access my video and music media anytime, any place on any of my devices. I enjoy all of the features of the DVD and Blu-ray disc experience without having to go to a physical Blockbuster Video, Hollywood Videos store or to a Redox DVD rental kiosk to secure a physical DVD or Blu-ray disc. Currently, I would be hard pressed to find a store that is solely dedicated to video rentals and sales like Blockbuster or Hollywood Video stores were just a few years ago. Coincidentally, I use to work at a local Hollywood Video store, when I was in graduate school working on my masters, just so I could grab a rental copy of the latest theatrical releases of a movies before they were all rented out. 

With the purchase of my new 4K TV, I now have quicker access to a variable plethora of Video on Demand services such as Netflix, Hulu, Sony’s new free streaming service Crackle, Walmart’s paid streaming service VUDU, Amazon Prime VOD, UltraFlix 4K, Ultra 4K Movie & TV and Dish Network’s VOD. With this much instant video technology at my fingertips, coupled with the convenience of watching video content, right on-demand, no waiting, why would I ever think about going out to a physical store or online to rent or purchase a DVD or Blu-ray disc? I have tried all of the VOD services on my 4K TV and from personal experience the picture and sound of these services are amazing. I would not think of paying extra for a Blu-ray disc and a Blu-ray player to play the disc on? In addition, all of these VOD services are available on all of my portable technologies, my iPad Pro, my iPhone 6 and across all Android devices as well. As the two images below indicate, my choice and a majority of other American consumers are choosing the convenience of the Video on Demand format over the DVD format (Kumb, Kunz, R., & Siegert, 2016). Therefore, I decided to rent the movie Paycheck through VUDU’s 4K streaming service on my 4K TV, this movie was amazing, especially in 4K.

                                   

In understanding if the competition between the umbrella terms and formats for DVD versus Video on Demand (VOD) is an example of Increasing Returns or Red Queens, I had to really stick to the facts and examples that Dr. Thornburg (2014e) impressed upon our class. Thornburg (2014e) notes that W. Brian Arthur is credited with influencing and describing the modern theory of Increasing Returns. The theory states that when two innovations hit the market at about the same time, by chance, one technology gets locked in and drives the other to extinction. Arthur tells us, “Increasing returns are the tendency for that which is ahead to get further ahead, for that which loses advantage to lose further advantage” (Arthur, 1996 p. 100). The concept or theory of Increasing Returns comes from the branches of mathematics called Chaos and Complexity Theory. W. Bryan Arthur used mathematic models to develop this theory, which is a recognized force for the development of new technologies (Thornburg, 2014e). Arthur’s theory concludes that emerging technologies do not follow a linear process; the process is always nonlinear (Thornburg, 2014e). In addition, the best technology in many cases, does not win out.

The example for Increasing Returns given by Thornburg (2014e) was the late 1970’s Videotape Format War, that of the Panasonic and partnering companies format (VHS) obsoleting the Sony and partnering companies format (Betamax). While Betamax was superior in image quality, less trouble prone and the overall superior technology it was still bested by the VHS format. The sub-optimal VHS format won out and was adopted because Panasonic was successful in convincing major film distributors to convert their movies to the VHS format, before Sony did, thus bringing popular movies of the day to market quicker on VHS. Here is a short video explaining the rivalry of the Betamax and VHS formats.

How Sony's Betamax lost to JVC's VHS Cassette Recorder


A more recent example of Increasing Returns would be the High Definition DVD Format War of the early 2000’s, pitting Sony’s Blu-ray disc format against Toshiba’s HD DVD disc format. This time Sony and its’ partnering companies were not going to lose out. As an educator, I am very impressed with the young man, in the video below, explaining the history of the High Definition DVD Format War.
     



                                      
                                                                                                                                            
              




HD-DVD vs Blu-Ray: How Sony won the format war


Thornburg (2014e) states that Red Queens are not as common as the other forces that drive emerging technologies. In addition, Red Queens happen when there is a huge competition between two technologies: in the process of these two technologies battling, all other competitors are left behind (Thornburg, 2014e). When we see two technologies that achieve a goal or similar goals, shooting up and all other similar technologies falling aside, we are looking at a Red Queen (Thornburg, 2013d, 2014e). The phrase “Red Queens” comes from Lewis Carroll’s 1871 published manuscript, Through The Looking Glass, where the Red Queen explains to Alice,

“Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!


As an example of Red Queens, Thornburg (2014e) discussed the rivalry between Apple’s computer hardware platform and the PC’s computer hardware platform. Both companies waged war in competitive TV commercials, such as the I’m a Mac / I’m a PC ad campaign, where each company was trying to best the other. Steve Jobs is quoted as saying, “BMW’s don’t sell as well as Chevy’s, but I want a BMW. There are enough people who want a BMW (Macintosh computer) to keep BMW (the Apple hardware platform) alive and competitive (against the PC hardware platform) (Jobs & Beahm, 2011). When the PC hardware format first came to market besides the Microsoft and Apple hardware platforms, there were hardware platforms from Commodore, Atari, and IBM, this an example of a Red Queen, because the Apple and PC hardware platforms left all other competitors behind, many of which do not exist any longer. Commodore was said to have the best platform out at the time, but no longer exists, proving once again that quality or best technologies, like Betamax do not always win out.
I view the battle concerning DVD technology versus Video-On-Demand (VOD) technology to be an illustration of Red Queens. This is because both technologies are still in existence (Rodriguez, 2016). While major DVD rental and purchase stores like Blockbuster Video and Hollywood Video are no longer in existence, consumers can still purchase DVDs from Big Box stores like Walmart and BestBuy or online at Amazon or DeepDiscount.com. Consumers can also opt to purchase a Video on Demand service such as Netflix, Amazon Prime, Hulu or even Blockbuster, online or through several different formats of set top and gaming consoles. Neither of these video technologies have pushed the other to extinction (i.e., Increasing Returns). However, in the near future VOD’s Streaming Video services may obsolete DVD’s, Blu-ray discs and the consoles needed to run them (Valentini, 2012).



4K/Ultra HD Blu-Ray Discs: Everything You Need To Know!



The DVD market is currently attempting to popularize Ultra HD 4K Blu-ray discs and their accompanying players, but is it too late? From personal experience, I have seen an Ultra HD 4K movie streamed through a 4K TV and also an Ultra HD 4K Blu-ray disc, played through an Ultra HD 4K Blu-ray player. Both the Ultra HD 4K disc and players are very expensive, compared to streaming a 4K movie, roughly $4 per movie rental, through a service like VUDU directly to a 4K TV. From my experience, the picture quality was nearly the same, but the cost was drastically different and not worth it to purchase an Ultra 4K disc for $30 each and the Ultra 4K disc player for $400 on top of the purchase price of close to $1,000 for my new Sony 4K flat screen (Juklc, 2016).

Double-click to enlarge the image above

Blockbuster Closes Its Last Store




In conclusion, Ultra 4K Blu-ray disc may become the best iteration of the DVD to date, as far as home theater technology is concerned. Definitively, a disc that convincingly projects movies on your home flat screen that look almost as good as they do in the local theater, where currently movies are viewed digitally in 4K could help save the DVD format in this high tech battle. Ultra 4K packs in four times the resolution of existing Blu-ray disc and players, over 8 million pixels, versus 2 million and this technology is accompanied by new technologies such as high-dynamic range (HDR), which dramatically increases color range, brightness and overall picture depth. Yes, Ultra 4K Blu-ray discs will be everything the movie patron could ever want or wish for in a home video format. And yet, this new technology is likely to be largely ignored by most consumers because of price. For this reason, I will continue to view my HD 4K content through the free and less expensive streaming VOD services that my 4K TV, and Apple’s iTunes offer rather than purchasing Ultra HD 4K Blu-ray discs. Consequently, I believe the consumer convenience of being able to stream high quality HD 4K movies from the luxury of our own homes will eventually lead the VOD market to obsolete the DVD market.


Resources

Links to purchase DVD’s online:

DeepDiscount.com - http://www.deepdiscount.com
Blockbuster.com - http://www.blockbuster.com


Currently new streaming VOD service apps:
Crackle – Free Online Streaming Entertainment Service - http://www.crackle.com


References

Arthur, W.B. (1996). Increasing returns and the new world of business. Harvard Business Review. Retrieved from https://hbr.org/1996/07/increasing-returns-and-the-new-world-of-business

Carroll, L. (1917). Through the looking glass: And what Alice found there. Rand, McNally.

Fritz, B. (2016). Home-entertainment sales fall again. The Wall Street Journal. Retrieved from http://www.wsj.com/articles/home-entertainment-sales-fall-again-1452115876

Jobs, S., & Beahm, G. W. (2011). I, Steve: Steve Jobs in his own words. Agate Publishing.

Juklc, S. (2016). Why 4K Blu-ray has a shaky future in home entertainment. 4K.com. Retrieved from http://4k.com/news/why-4k-blu-ray-is-has-a-doubtful-future-in-home-entertainment-12053/

Kumb, F., Kunz, R., & Siegert, G. (2016). Research on the motion picture industry: State of the art and new directions off the beaten track away from theatrical release. Journal of Economic Surveys.

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.

Rodriguez, A. (2016). Thanks Netflix: The worst countries to be in if you’re in the DVD business. Quartz. Retrieved from http://qz.com/628917/the-worst-countries-to-be-in-if-youre-in-the-dvd-business/

Thornburg, D. (2013d). Red queens, butterflies, and strange attractors: Imperfect lenses into emergent technologies. Lake Barrington, IL: Thornburg Center for Space Exploration.Thornburg, D. (2014). Red Queens, Butterflies, and Strange Attractors: Imperfect Lenses into Emergent Technologies. Licensed via Creative Commons Attribution-NoDerivs 3.0 United States License. http://creativecommons.org/licenses/by- nd/3.0/us/ Third-party images removed.

Valentini, V. (2012). In VOD we trust: Navigating the minefield of the ever-changing distribution platform. The IDA. Retrieved from http://www.documentary.org/magazine/vod-we-trust-navigating-minefield-ever-changing-distribution-platform