Using the Blu-Ray vs DH DVD example, and other sources, provide advice to a chief executive officer of a firm for the best strategy to deal with a standard battle Candidate Number: 69619
Word Count: 1569
In the VCR market, although Betamax format of Sony was the technologically superior t VHS formats of JVC, there were still many factors that led to the dominance of VHS over Betamax. Firstly, the recording length is a major factor. Compared with the original Sony Betamax video recorder which could only record for 60 minutes, which is not long enough to record a film. Conversely, VHS of JVC could manage 120 minutes. Apart from this, one more factor is the rental price of VHS is lower. It is clearly that VHS machines were much cheaper and simpler to manufacture (Owen, 2008), which was obviously an attractive element for companies in the market. Furthermore, JVC followed a more open policy for their partners so that a big VHS “family” was built up. Additionally, the efforts of supporting firms could not be ignored. They not only gave standard greater credibility to the VHS but also induced a faster pace of product improvement at crucial moment when the market was selecting between Betamax and VHS systems. Also, in the late 1970s, VHS obtained market share depending on a slight technological advantage over Betamax. Last but not least, taste change of customers. They preferred to watch prerecord movies than shows they record themselves. In this way, VHS naturally became the most used format in stocking movies.
Blu-ray and HD-DVD are two formats that competed to become the next generation high-definition DVD format to replace standard DVD (Media College, n.d.). The main features of both Blu-ray and HD DVD provided the capability for higher definition video, and greater storage space. The shorter wavelength of the blue laser diode which sparked the two formats enabled more data to be fitted into a special sized disc. Furthermore, both these two formats featured the capacity for vastly superior video to standard DVD. In the aspect of data access speed, both of them exceeded standard DVD’s 11.08 megabits per second due to Blu-ray and HD DVD has respectively reach 53.95 and 36.55 per second. Additionally, in storage capacity, compared with standard DVD’s maximum 8.5GB of date, Blu-ray held minimum 25GB of date while HD DVD has minimum 15GB of data. Also, Max resolutions of both formats were 1080p and their Compressions were MPEG-2, AVC MPEG-4 and VC-1 (Media College, n.d.).However, there are some differences in construction. The data layer lay o.1mm below the surface in Blu-ray Discs, while HD DVD and standard DVDs the data layers are normally 0.6mm below the surface. Such proximate data layer to the surface of Blu-ray Discs, which is a scratch-resistent surface, was required to minimize damage, but in HD DVDs and standard DVDs it was not. In addition, each of them contains different advantages. Blu-ray clearly had much greater storage capacity, re-writable discs can record and playback at the same time while HD DVD was the first format to the market. It was certainly cheaper to produce in short time (Media College, n.d.).
In economics and business, a network externality is the effect that one user of a good or service has on the value of that product to other people. When network effect is present, the value of a product or service is dependent on the number of others using it. From this perspective, the nature of high definition video market’s network externalities is that a good becomes more valuable as more people use it. When network externalities are strong, they can radically affect the way a market behaves, and they cannot be ignored. According to Park (2003), in the case of durable goods, consumers not only consider the current utility but also expected future utilities that are derived from the use of products. For this reason, when customers are certain of which of Blu-ray and HD DVD, if any, will be the most...
References: Huang, C., Liu, Y. and Xia, Z. (n.d.). Sonyâ€™s Blu-Ray Strategy. [online] Available at: http://www.mcafee.cc/Classes/BEM106/Papers/2007/Bluray.pdf [Accessed 18 Apr. 2015].
Mediacollege.com, (2015). Blu-ray vs HD-DVD. [online] Available at: http://www.mediacollege.com/video/format/compare/bluray-hddvd.html [Accessed 18 Apr. 2015].
NYU Stern, (2002). Betamax and VHS. [online] Available at: http://pages.stern.nyu.edu/~lcabral/teaching/betamax.pdf [Accessed 18 Apr. 2015].
Owen, D. (2015). The Betamax vs VHS Format War. [online] Mediacollege.com. Available at: http://www.mediacollege.com/video/format/compare/betamax-vhs.html [Accessed 18 Apr. 2015].
Park, S. (2004). Quantitative Analysis of Network Externalities in Competing Technologies: The VCR Case. Review of Economics and Statistics, 86(4), pp.937-945.
Wiss, A. (2006). HD DVD and Blu-ray â€“ a Format Battle with Only One Winner?. 1st ed. [ebook] Sweden: Master of Science Thesis Stockholm. Available at: https://www.nada.kth.se/utbildning/grukth/exjobb/rapportlistor/2006/rapporter06/wiss_andreas_06162.pdf [Accessed 18 Apr. 2015].
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