Red Queens and Increasing Returns
Arthur (1996) explains the survival driven and technologically influenced business world of the 21st century as based on the economy of increasing returns. Technologies increase their chances of dominating the market through strategic alliances and continued improvements in compliance with Moore’s Law (Arthur, 1996; Thornburg, 2008b). In conjunction with Red Queens where two predominate technologies emerge, gain popularity, and struggle to grab the market share of a technology market this battle for dominance continues until either a wild card emerges to change the whole game or one technology eventually wins out and takes control of the market due to capabilities or marketing strategies, as sometimes its virtues are smaller, and its popularity wins out and users become “trapped” in its vortex (Thornburg, 2008b). Increasing returns continue and Red Queens sometimes eventually grab the market due to alliances with other technologies that provide an advantage or due to marketing and popularity as perceived by the consumer as a better product (Thornburg, 2008b).
In a previous assignment for our Emerging Technologies class we were assigned the task of choosing a movie based on a Philip K Dick novel, obtain the movie, and complete our assignment. There are several ways to view a movie utilizing technologies available today. For this discussion, we are examining two means to watch the movie, purchasing or renting a DVD and the use of video-on-demand (VOD) to view the movie. We now examine how and why we chose our methods of viewing and how these technologies fit into the categories of increasing returns and Red Queens. While engaged in the assignment I explored the options of renting through VOD or purchasing a DVD.
From my own personal experience, I would say that these two technologies are situated in the economics of increasing returns due to popularity and filling the needs of people in two different genres of movie watchers. Yes, you could argue that they both provide a technology that allows people to engage in entertainment which makes this battle appear like the struggle of the Red Queens but I believe they are two similar but different technologies (Thornburg, 2008b). VOD companies such as Netflix, Hulu, and now Amazon and others as well as cable and satellite on-demand (for current features) provide a service that allows people to add to their movie and entertainment collections utilizing computer networking technologies of purchasing entertainment through downloads, usually at a much lower cost, without the delay of waiting for a DVD to arrive (if ordered online) or having to go to a store to purchase the DVD. In fact, because of the convenience and cost of VOD, this technology may replace DVD technology in the entertainment industry over time. In McLuhan’s tetrad, VOD may obsolete the DVD (Thornburg 2008a). I believe the Red Queens in this scenario are yet to emerge as more companies throw their proverbial “hats in the ring” of the VOD arena. The Red Queens are emerging in the area of VOD separate from the DVD/Blu-ray market. VOD is a “wild card” in the entertainment viewing industry and the competition in the VOD market will produce the Red Queens (Thornburg, 2008b).
At this time, however, DVD’s continue to be popular with the general public and many people continue to hoard them and create huge collections filling shelves and DVD books. I am one of those people and since I had the time to wait for the video to arrive by carrier after I ordered it online at Amazon I continued with my DVD purchasing habit. Right now, there is a market and increasing demand for DVD and Blu-ray, and the makers of those products are now offering digital copies when purchasing a DVD or Blu-ray (sometimes you can even get all three). I sometimes wonder when I will be replacing my DVD collection with a home entertainment system with storage capacity to contain all my movies and music just as I replaced my records with 8-tracks, my 8-tracks with cassettes, cassettes with cd’s, cd’s with mp3’s and 4’s on my IPod and my VHS cassettes with DVD’s. The technology is available and the “bandwagon” is rolling the question is “which Queen with reign” in the future of VOD?
Arthur, W. B. (1996). Increasing returns and the new world of business. Harvard Business Review, 74(4), 100−109. Retrieved from the Business Source Complete database.
Thornburg, D. D. (2008a). Emerging technologies and McLuhan's Laws of Media. Lake Barrington, IL: Thornburg Center for Space Exploration.
Thornburg, D. (2008b). Red Queens, butterflies, and strange attractors: Imperfect lenses into emergent technologies. Lake Barrington, IL: Thornburg Center for Space Exploration.