Red Queens and Increasing Returns

I actually thought that all of the movies listed for my assignment would be available on Netflix.  However, I could only find Paycheck and this was the deciding factor for me as to which movie I would watch.  I think that the battle between DVDs and Video On-demand (VOD) is an example of Red Queens and not increasing returns.  Arthur (1996) explained that increasing returns, “cause products that are ahead to get further ahead” (p. 100).  Thornburg (Laureate, 2009a) expanded on the idea of this race in which one product gets further ahead to explain that the product which gets ahead, to explain that one product gets locked-in and drives the other to extinction, even if the winning product is subpar to the now extinct product.  Both DVDs and VOD may be experiencing increasing returns, however, one technology has not yet knocked the other out of the race.  The Redbox website boasts, “Renting more than 1.5 billion discs to date” (Redbox, 2012).  These numbers include rentals of both games and DVDs, showing that Redbox has diversified in its race for number one.  This service upgrade is a definite benefit to the consumer and a leg up for Redbox kiosks as the Blockbuster Kiosk does not offer games at the kiosk, but you may rent them online along with videos.  Meanwhile, there is much competition in the world of VOD itself.  The big players are Amazon, Best Buy, Blockbuster, Hulu, Netflix, Wal-Mart, and Redbox may soon join the race.  Typically these various VOD services require some technology through which the video will stream, such as a Nintendo Wii, a Sony Playstation 3, DVD and Blue-Ray disc players, TiVos, televisions, computers, and smartphones. 

Among all the competitors, the battle seems to be Netflix vs. Blockbuster, since these are the only two who offer videos through the mail, as well as, streaming video.  Netflix has already pulled ahead of its competitor in that they have been able to get Netflix automatically set up on new flat screen televisions.  The company even voiced the possibility that Netflix would be a part of almost all Internet accessible devices (Roth, 2009).  Anderson (2004) mentioned that ‘timing is everything’ and Netflix seems to getting the jump on its competitor.  Thornburg (2008) added that there were advantages to the consumer when dealing with Red Queens as the one who is running twice as fast is upgrading the product quality in efforts to achieve consumer lock-in.  In this case, it is a plus to the consumer to be able to access VOD from any Internet-ready device.

Revisiting McLuhan’s tetrad, VOD would be the emerging technology which enhances watching movies and television programming, obsoletes cable, retrieves the technology of holographic television, and reverses into the function of renting DVDs in order to watch movies.

Tetrad for Video-On-Demand

Video-On-Demand
Enhances Consumers may watch movies and favorite television programs as streaming video on Internet-ready devices.  Service is affordable, typically under $10.00 so far.	Obsoletes Cable Television.  Consumers no longer need to pay exorbitant prices for channels they do not watch or which provide programs which are of little or no interest to viewers.  The technology also obsoletes renting VHS movies and DVDs from a video store.
Retrieves The technology reverses into holographic television.  This technology is projected for the year 2025 and will allow 3D images in movies and television programs to appear to viewers.	Reverses The technology reverses into the function of paying for a membership at the video store and renting videos for viewing pleasure.

References

Anderson, C. (2004). Chris Anderson of Wired on tech’s long tail [Video]. Retrieved from http://www.ted.com/talks/chris_anderson_of_wired_on_tech_s_long_tail.html

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

Elon University/Pew Internet Project. (n.d.). Imagining the Internet: A history and forecast: Forward 150 timeline. Retrieved April 7, 2011, from http://www.elon.edu/docs/e-web/predictions/forward150years.pdf

Falcone, J. P. (September, 2011). Netflix vs. Blockbuster: What’s the best service for streaming and DVDs? CNET News. Retrieved from http://news.cnet.com/8301-17938_105-20093587-1/netflix-vs-blockbuster-whats-the-best-service-for-streaming-and-dvds/

Fox News Network, LLC. (2012). Netflix vs. Vudu vs. Amazon and More: A consumer guide to streaming video. Retrieved from http://www.foxnews.com/tech/2011/07/28/netflix-vs-vudu-vs-amazon-and-more-consumer-guide-to-streaming-video/

Laureate Education, Inc. (Executive Producer). (2009b). Emerging and future technology: Red Queens. Baltimore, MD: Author.

Redbox. (2012). Facts about Redbox: Media Center. Retrieved from http://www.redbox.com/facts

Roth, D. (September, 2009). Netflix everywhere: Sorry cable, you’re history. Wired Magazine: 17.10. Retrieved from http://www.wired.com/techbiz/it/magazine/17-10/ff_netflix

Thornburg, D. (2012). Apple and Google as an example of an evolutionary Red Queen effect in the technology world. Lake Barringon, IL: Thornburg Center for Space Exploration.

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