Janice Vis

Vis, Janice

ENGL 484

Prof. Jonathon Cohn

Feb 25, 2016

The DVD, Convergence, and the Potential for Profit

According to the article *Consumer Market: DVD Delivers* by Peter Brown the DVD was the “hottest product in 1999.” Most of this article focusses on the new video format and its potential to bring in revenue, but it also relates the success of the DVD and “new” products to convergence, and implicitly comments on the importance of competition. Brown defines convergence in relation to specific products, suggesting that convergence is “the combination of consumer, communications, and computer products into one single appliance.” In other words, convergence involves combining previously separate products into one item. For Brown, convergence is entirely economic and profit-driven. He sees convergence products as an opportunity for businesses to enter new markets, and predicts where businesses will be turning to increase their bottom line.

Brown focusses on the rise of the newly popular DVD, which he sees as a perfect example of a new consumer product that some companies are cashing in on. Although he praises the DVD, he also discusses some of the challenges that businesses face as new products begin to cross over between new markets. A DVD is not simply and electronic item; it is also an entertainment product, and therefore dependant on the cooperation of multiple market sectors. The article states the success of the new video format was made possible because of the support given by movie studios. Although Brown appears to have a positive outlook, it suggests that a few big players are able to control the entertainment market. As convergence products cross between markets, larger players have the opportunity to squeeze out and buy off the smaller companies. Therefore, convergence may lead to less competition.

Aside from the DVD, Brown also praises other “new” consumer products, such as video game consoles, digital cameras, and digital cable boxes. These are areas of the electronics market doing well in 1999, and he expects that businesses invested in these markets will only see their profits soar in the coming years. The article paints these markets as open to new businesses and start-up companies, and therefore open to cooperation with other business sectors, leading to innovative convergence products. Furthermore, the article suggests that these new digital and innovative consumer items will only increase in popularity.

Interestingly, he positions these products in opposition to the PC, which he believes will lose popularity to these new products and will not garner the interest of other companies. He labels the PC market as “unfriendly” to new companies, suggesting that start-ups and other business sectors are pushed out of the PC market by the current players. Furthermore, the article claims that the PC market is “flattening out,” indicating that the market for personal computers is not going to experience a growth in profits.

By creating a dichotomy between the “new” consumer products open for business and innovation and the “unfriendly” PC market, Brown is suggesting that convergence products necessary for market growth. The new digital consumer items will experience growth because there is room for new companies and the involvement of other market sectors; PC will not fare as well because new or previously separate players remain cut off from it. Thus, according to this article, competition is necessary for convergence, innovation, and ultimately, the success of a product.

This assertion is interesting when pinned next to the article’s previous discussion of the DVD and the film industry, which hints that the convergence of markets may limit competition. On the one hand, new innovative products are created when the market is open to business from other sectors. However, the major players in these sectors are also given the power to cut down the new competition. Brown’s view of the PC is perhaps overtly stark, but these implicit statements regarding the tension between competition and innovation remain relevant in today’s marketplace. Horizontal mergers may have been the solution to this tension. Rather than eliminating completion, major players opt to simply buy smaller businesses and hustle them into a corporate empire. But the article does not make any clear statements regarding this element of convergence. While it discusses some of the economic forces that may have – and may still be – central to the development of commercial giants, it seems blind to the implications of its own words.

Works Cited

Brown, Peter. "Consumer Market: DVD Delivers." *Electronic News* (1991). 4 Jan. 1999: 20. *Canadian Periodicals Index Quarterly*. Web. 25               Feb. 2016.

Other “Convergence” Articles

Gillen, Marilyn A. "Biz explores shape of music to come." *Billboard.* 19 Nov. 1994: 10+. *Canadian Periodicals Index Quarterly*. Web. 25 Feb.             2016.

Hawaleshka, Danylo. "Redefining television." *Maclean's.* 23 Nov. 1998: 96. *Canadian* *Periodicals Index Quarterly.* Web. 25 Feb. 2016.