Thursday, January 31, 2008

Format Wars

In some cases, “people” are under the impression that their opinions and preferences will influence the final outcome when there is a choice to be made not knowing that the choice has been made for them ahead of time.

“At times of decision- constitutive moments, if you will- ideas and culture come into play, as do constellations of power” Starr P.1

Two good examples are the video format wars like the VHS-Betamax of the 70’s and HD DVD- Blu-ray of today. People believe that they have an influence in such decisions when in reality these decisions were finalized in the boardrooms of multi-million dollar corporations having the power a long time ago.

The consumer always pays the price and in the end, the only winners are the stockholders laughing all the way to the bank.


At 9:56 PM, Blogger A. Mattson said...

I think you are attributing a too much power to these competing media corporations. These rivals are investing millions in different industrial standards. If the question of which format will triumph is already settled why would any corporation still invest in a losing format?
Consumer demand and culture do play a factor in determining the outcome of these markets. Corporations spend a lot of time and money trying to predict what these preferences will be.

At 3:43 PM, Blogger SandroB said...

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At 3:46 PM, Blogger SandroB said...

I agree to some extent that consumer demand was a factor determining the outcome. Back in the 70’s Sony came out with the first consumer video recorder (Betamax) followed closely by JVC a year later. When RCA decided they wanted to license the technology from Sony, they stipulated that the units had to be capable of recording for a duration of 4 hours. Sony told RCA that current technology could not reach that duration without sacrificing quality and they would not do it. Such was the case when RCA approached JVC. JVC’s parent company Matsushita met with RCA and told them that JVC would adjust their technology. Consumers in general had nothing to do or say regarding these decisions and in the end they paid the price of purchasing an inferior technology for a premium price.

As to why would any corporation invest in a losing format the answer is politics and money. Let us fast forward to the so called “new format war” Blu-ray and HD DVD. Consumers are undecided as to which format to choose. If they took the time to do some research and become informed consumers instead of gaining their knowledge from a misinformed electronics store employee they would know that this media war was decided on favor of the Blu-ray format months ago. Toshiba one of the makers of the losing format HD DVD has thousands of players out in stores and ships new ones every day. It would be corporate suicide to announce defeat one day and recall and dispose of these thousands of units. The solution is to sell (Corporate greed) them and continue playing dumb regarding the outcome. When a media format dies, it does not happen on an exact date on an exact time. You will see them very slowly selling less and less units until they finally disappear but they will not make an announcement of defeat they will just blame the consumer as usual.


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