Theaters, movie rental stores, Redbox rentals in big box super stores, and Netflix: where to go, where to go, when you want to watch a movie? When charged to watch a movie based on a Philip K. Dick book, I consciously chose to rent from a local movie, music, and gaming supply store. They need my business. My community needs the tax base and the jobs created by the store. I will continue to support it as long as they are in business. Blockbuster and Movie Gallery have recently closed their doors and bowed to the convenience of door-to-door delivery and online movie streaming provided by Netflix. My neighborhood store may, indeed, be in jeopardy.
Netflix, founded in 1999, is the world’s largest subscription service for movies and television episodes over the Internet and by mail. According to the Netflix website, for $8.99 a month, members can instantly watch unlimited movies and TV episodes. No due dates. No late fees. In 2004, Netflix recorded nearly 2 million members (Desjardins, 2004). In 2009 they had 12.3 million subscribers. By 2010 they recorded more than 15 million subscribers. Anderson (2004) described four stages, or inflection points, where technologies collide, changing the technology and its impact on society. The stages are: critical price, critical mass, displacement, and low to no cost. By any definition, the information presented above provides evidence of these ‘collisions’. In the short decade since Netflix arrived on the scene, the critical price was established [Movielink offered movie downloads for $5 over a 24 hour period (Desjardins, 2004)], critical mass was achieved, the cost per unit rental has become negligible, and the big business rental stores were displaced by the technology and convenience of the emergent business.
Initially, Netflix presented a Red Queens challenge to the other movie rental businesses (Thornburg, 2009b). Incentives were offered; prices and availability of movies and services were juggled as the competing businesses fought to maintain their positions in the market. Before the end of the decade, however, the force of Increasing Returns dominated as Netflix forced the closure of the competing movie rental stores (Thornburg, 2009a). Before long, even DVDs may become obsolete as movie streaming gains ground. Bandwidth issues, however, must be addressed by ISPs before streaming can become the norm.
The following tetrad represents the four stages of how the movie industry has shifted due to emergent technologies:
In this PC World blog, Jacqueline Emigh (2009) predicts the death of the DVD due to movie downloads. Following her discussion are extensive comments, both in support of her arguments and against. http://www.pcworld.com/article/181345/best_buy_movie_downloads_is_the_death_of_the_dvd_nigh.html
chris_anderson_of_wired_on_tech_s_long_tail.html
