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In this week’s studies we are discussing if DVDs and VOD (Video on Demand) are an example of Red Queens or Increasing Returns. Red Queens, according to
Thornburg (2008), are when two technologies are dominating the marketplace in a head-to-head fashion. The competition to stay ahead of the other benefits the consumer as the competitors constantly improve the product to stay in the game. (The term Red Queen was derived from the notion of Alice in Wonderland with the Red Queen in hand, running simply to stay in place.)
Increasing returns, according to
Arthur(1996) in his article entitled,
Increasing Returns and the World of Business is when two
two innovations also begin to compete but one clearly dominates the other into extinction.
I do not think that DVDs and VOD are Red Queens. When VOD services began, DVD rental places such as Blockbuster had to begin adding to their repertoire of services. For example, not quite yet in the VOD stage, when Netflix delivered movies to the house, Blockbuster added that feature.

Then VOD services began to gain popularity including Netflix, and Blockbuster began to offer VOD services.

I do not think DVDs can compete with VOD, and that eventually VOD will eliminate the DVD market. Currently, however, VOD has not completely modeled the increasing returns yet because, in my opinion, of the human factor of ease of use, need for a new piece of technology, need to learn new technology, and because VOD generally involves commitment to a monthly service. Beta, VHS, and DVD players were all generally the same: Insert a media device into a machine, play, FF, Rewind, Stop, eject. The concept of VOD is different. It will take more time for people to move over to the new way. Also, monthly fees may not appeal to many (like myself) who watch only 3 or 4 movies a year.
Red Queens or Black Jack?Thornburg (2008) warns us not to extrapolate the future from the past, that changes occur in a non-linear, exponential fashion with the appearance of wild cards at any moment. (A wild card, according to Thornburg, is an innovation that seemingly appears unexpectedly from nowhere and takes over the marketplace.) Arthur (1996) discusses his model of increasing returns and the new management style needed to accommodate this new business model. In Arthur’s discussion, he uses the analogy of gambling at a casino.
Using Thornburg’s reference to cards (Red Queen) and warning about wild cards and using Arthur’s gambling analogy, I propose that perhaps VOD could even lose to Black Jack. Black Jack basically trumps all. So a Black Jack innovation could simply trump all in the video marketplace and could be easy to use, easy to learn, convenient, not requiring learning complicated technology, and appealing to all. Black Jack is like Thornburg's wild card, but in this analogy, it may not be a complete surprise out of nowhere. Also, the term "Black Jack" has the connotative meaning of "I win!"
McLuhan’s TetradIn the end, I do believe that currently, VOD is beginning to replace DVDs, yet both have similarities in
McLuhan’s Tetrad. Below I have put the DVD into a Social Tetrad and the VOD into a technology tetrad.


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 emergent technologies. Lake Barrington, IL: Thornburg Center for Space Exploration.