Many business sectors have a lifespan
influenced by technological advancement or economies of scale. We once had a
corner shop, a butcher, a baker or delicatessen in most streets selling basic
groceries, nowadays supermarkets offer economies of scale, convenience and
prices small business are unable to compete with.
So too with technology, are there any photo
processing businesses left? The local video rental library morphed into a DVD
and Blu ray rental business and is soon heading to obsolescence. Online video
streaming brought about by fast Internet connections with media companies
distributing movies on demand, pay television through telephone cables. There
is no need to drive down the DVD rental shop, select a couple of movies to
watch in a certain time-frame and race back to return them before late fees are
applied.
You can now watch a movie or TV show at
your leisure, how many times did you return a movie un-watched so as to not
incur late fees? The media companies are not only technologically advanced as
compared to the DVD shop, they incorporate economies of scale.
DVD retail shops still exist, one suspects
their cost structures remain high with suburb by suburb coverage with real
estate and associated costs forming a significant and increasing burden. During
the 80s and 90s, many small video rental entrepreneurs were forced out of
business by the large chains; we are now seeing the large multi-media consortium doing exactly the same to them.
No comments:
Post a Comment