Video On Demand is Queen and DVD Obsolete

If James Carville was asked to opine on the fate of the DVD in competition with Video On Demand, I am quite confident that his response would be, “It is the Cloud Stupid”. This blog seeks to inquire about that very phenomenon, the state of the competition between the DVD and Video Streaming which Alomari and Sumari (2011) divides into two categories: Live video streaming and Video on Demand (VoD). First, I will explain why this competition qualifies as an illustration of Increasing Returns (Thornburg, 2013c) instead of Red Queens (Thornburg, 2013g) with supporting examples. Second and last, I will provide my rationale for classifying DVDs in the Closure/Obsolescence side and Video On Demand in the Extension/Enhancement quadrant of McLuhan’s tetrad (Thornburg, 2013f).

1. The DVD vs. Video On Demand Competition: Increasing Returns, No Red Queens:

On March 22, 2013, under the title, “How Video On Demand Is Killing The DVD” , Geoff Talbot wrote: Unfortunately, the cruel hands of fate that smote the VHS are about to deal a similar blow to your fabulous collection of DVD’s. With access to the Internet widely available, the bandwidth it supports, an unlimited amount of videos available online, and on demand services just waiting to serve up the movie of your choice at the moment you want it, the need for a way to physically take a video with you is quickly diminishing.

After identifying Amazon Video On Demand, Netflix, Hulu Plus, Vudu, and Crackle as the as key Video On Demand enterprises worth watching, the article concluded “Once more you are going to the video store to rent and not buy A movie; the only difference is the video store is now in the cloud and you can access the content from just about anywhere”.

Thornburg (2013c) defined Increasing Returns as a powerful force invented by Brian Arthur and which drives the emergence of technologies using “Chaos and Complexity Theory” from a non-linear perspective. In other words, the “Increasing Returns” address situations where “you have a couple of innovations that hit the market around the same time, it’s possible that one of them will just by chance capture people’s imagination more than the other”.

On the one hand, the origins of Video On Demand go back to 1994 with a service from Cambridge Digital Interactive which “ provided video and data to 250 homes and a number of schools connected to the Cambridge Cable network (later part of NTL, now Virgin Media)“. On The other hand, DVDs or Digital Video Disks were “invented and developed by Philips, Sony, Toshiba, and Panasonic in 1995” to quickly become the ideal medium to store and distribute music, movies, and other forms of digital data. In the beginning, slow and expensive internet traffic drove consumers to adopt DVDs over Video On Demand services. Those days are now gone, chased away by the fast and powerful internet environment.

Thornburg (2013d) offered the Red Queen as another powerful force which drives technological innovations. Originated from the “the Looking Glass, this story by Lewis Carroll”, the concept illustrates the situation of two competitors who, after overcoming the rest of the competition, find themselves running “as fast as” they “can to stay in the same place”. This is definitely not the case between the DVD and Video On Demand. Or, if there is a Red Queen in this context, it is Video On Demand.

2. The DVD is Obsolesce and Video On Demand is Enhancement.

The DVD is currently standing as an obsolete technology in many ways. The first use of the term Cloud Computing which has come to define the fast internet of today was back traced to either 1996 or 2006. From those years to date, the clouds have become the favorite vehicle for customers to access digital content. I guess if I was again to ask James Carville why the laptop I bought last month from Dell came with no Disk Drive, no CD and no DVD player, his response would have been the same: “It is the Cloud Stupid!” By the same token, since customers are finding it is more convenient to just click and play or just press a key on their remote control to access digital content, it but appropriate to classify Video On Demand in the Enhancement quadrant of McLuhan’s tetrad (Thornburg, 2013f).

Alomari S, Sumari P. Statistical Information of the Increased Demand for Watch the VOD with the Increased Sophistication in the Mobile Devices,Communications and Internet Penetration in Asia. [serial online]. December 9, 2011;Available from: arXiv, Ipswich, MA. Accessed November 12, 2014.
Alomari, S. A., & Sumari, P. (2011). Statistical Information of the Increased Demand for Watch the VOD with the Increased Sophistication in the Mobile Devices,Communications and Internet Penetration in Asia. doi:10.5121/ijma.2011.3415
Arthur, W. B. (1996). Increasing Returns and the New World of Business. Harvard Business Review, 74(4), 100-109.

CDs and DVDs to go the way of the LP. (2003). Electronic Library, 21(6), 621.
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.
Thornburg, D. (2013d). Red queens, butterflies, and strange attractors: Imperfect lenses into emergent technologies

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