In turn, this encouraged further take-up of the VHS standard. Some authors have claimed that where knowledge and information are important, there is a tendency for big networks to grow bigger whilst smaller networks shrink. Where network effects are important, this will affect firm behaviour by encouraging patent races in the development process in order to gain first mover advantages in production. The protection IPRs afford allow innovators to trade information in competitive markets through licensing use of these IPRs. This market power also allows producers to recover fixed costs through more creative pricing and marketing arrangements.
Publishers first issue a book in hardback and only later in paperback.
Films are released first in cinemas, then on video and television. Other techniques to segment the market or tailor the product to new groups of consumers can be used as well. Vertical restraints such as selective distribution of a film may also be used as part of a marketing campaign or to establish a brand image. Others may not be able to take advantage because IPRs relevant to their innovation are not yet available. For example, software for business methods is arguably patentable in the US but not yet in Europe.