Tag Archives: Video Rental

RFID- Its technology and future developments

RFID (Radio Frequency Identification Technology) is a technology that is not only used in disruptive technology but will only enable the technology to evolve and expand into other sectors! According to engineering.com RFID technology is found in several aspects within the transportation industry. In the trucking industry the CRESCENT program on the west coast allowed trucks to bypass weigh stations by using a weigh in motion system. The program has now been applied to more than 30 states that utilize a common RFID tag in order for trucks not to have a different tag for each weigh in system.

Airports have also implemented this technology in their tracking of excess parking in arrival/departure areas. Airports have discovered that they can utilize RFID toll tags to keep track of individual parking times much to the expense of the jobs at exit booths. This technology has also found its way into the rail industry as well. One of the major problems that interstate railroads face is knowing which trains belong to which company at any given time. This means that a train could switch cars in a different state and the company of that train would not know for weeks, months, or even years. A potential solution to this problem came in the 1980s with the introduction of RFID tags one on either side of the train. The problem with these tags was that many could not withstand the extreme temperature of the cargo they were carrying. Other developments such as trailer tracking and container tracking have been looked into but never implemented as the RFID tag process was eventually hauled.

One of the most common aspects of RFID in public transportation are tolls. Companies such as EZ-Pass present RFID technology as an alternative for customers to traditional cash payments. One of the biggest challenges for this technology has been the acceptance of multiple tag protocols with each vendor unwilling to release their implementation secrets. This problem came to a head when tolls in the northeast began to see the value in RFID technology for congestion at tunnels, bridges, and toll roads as thousands used traveled through each form of infrastructure daily. The solution was a common protocol for all vendors to license their RFID technology. Some chose to license their protocols with other vendors while others chose to develop dual protocol tags to be used within multiple applications.

RFID technology has also been proposed for guns ushering in a new era for smart gun technology. This technology already available in other countries has been introduced to California by Armatix of Munich, Germany. This 22 LR caliber 10 round pistol uses a target response system only allows the gun to fire when the user has fired it on a recognized target. The pistol is also paired with a iw1 active RFID watch which is a PIN activated wristwatch that communicates with the gun to arm it for firing. Without the watch, the gun cannot be fired. Smart guns are also developed by Triggersmart headquartered in County Limerick Ireland. Their gun also uses a RFID tag similar to Armatix that will not fire unless it is in the hands of an authorized user.

For the transportation industry RFID has proven to be a key player. It has allowed for faster interstate transportation with programs such as CRESCENT and EZ-Pass for tolls. The airline and train industries have also began utilizing this technology with varying success. As RFID has continued to evolve the transportation industry it has expanded into other products such as smart gun technology. While RFID has not been limited to these industries it has shown to change the framework of traditional methods for these industries. Some question to consider as this technology evolves are the following: Who benefits and does not as a result? What other everyday products will RFID eventually infiltrate?

For more on RFID in transportation click here

For more on smart gun technology click here

 

The Fall of Blockbuster

The Video Rental Industry was a six billion dollar industry. It was created in 1978 by Video Station in Los Angeles, California. Like other advancing industries, Mom and Pop video rental stores gave way to major chains, such as Major Video Corporation, Palmer Video, and Blockbuster. These chains boasted gigantic tape selection, sometimes in the tens of thousands. The independent stores could only stock one to two thousand copies on the shelves. Blockbuster could afford to charge less and have more copies of the hits. As of 1988 the company brought in $70,000 monthly and 26% of that was profit. The New York Times claimed that it was “bent on becoming the McDonald’s of video stores”. It was reported that the company was so strong that it feared antitrust law when it attempted to buy Hollywood Entertainment Corporation, back in 2004-2005. The company was so big that it was almost considered a monopoly, and the consumer’s protection needed to be considered. In the end, these fears were never realized. The company declared bankruptcy and collapsed. So how did this giant monopoly-like corporation go from 9,000 locations to less than 300? Disruption.

 

Disruption is the displacement of established technology which, often times, creates a new industry. Blockbuster and the entire video rental industry became one of the biggest victims of disruption in the past two decades. In the beginning, with its unique rental policy, the company solved the problem of rental VHS theft and led the industry for years. Viacom bought Blockbuster for $8.4 billion dollars in 1994, the equivalent of $24.26 billion dollars in 2015, and then Blockbuster successfully goes public in 1999, raising over $465 million in its IPO.

Two years earlier, entrepreneur Reed Hastings, is frustrated after getting fined $40 in late fees. This became part of the inspiration in his next decision, the founding of Netflix. As Blockbuster was making over $700 million in late  fees in 2000, Netflix had just started mailing out DVD’s to customers. Of all the mistakes the video rental store made, the biggest was declining to purchase Netflix. Multiple offers were made in 2000, but Blockbuster declined to pay $50 million for the upstart. Netflix, not discouraged, would go public in 2002 and continue to be a creative force.

The creative destruction was no longer on the side of the Blockbuster, and the company had to play catch up. There were several attempts by the video rental store to react to Netflix’s newfound success. In an attempt to compete with Netflix, the company launched its own DVD mailing service in 2004. Netflix would sue for patent infringement, forcing Blockbuster to pay $4.1 million. To make the company look more attractive, Blockbuster began to give a week grace period for rentals in 2005. This led to a flatter operating income for the year, and so to compensate the company decreased its marketing budget. The company would create its own streaming service, Blockbuster on Demand, and one-dollar DVD rental machines to compete with Redbox, but it was too little too late. The company was de-listed from the stock exchange in 2010 and filed for chapter 11 bankruptcy. DISH Network purchased the company in 2011 and closed the last of the distribution centers.

The problem was that Netflix disrupted the industry. As technology advanced, that company led the charge towards customer-oriented, convenience oriented movie renting. As this history shows, the company kept trying to fight the tide, but not on their own terms. Blockbuster went from the greatest to gone in less than a decade, peaking in power in the mid 2000’s and then bankrupt by 2011. So what can be learned from the Blockbuster story? Never settle. Innovation is always around the corner and one company policy can give away to a whole new set of consumer demands. Netflix now carries the torch in the media world. While Blockbuster was falling, Netflix would continue to disrupt the industry. The next post will discuss the rise of streaming further, elaborating on how streaming services established their footing in the industry and how disruption persisted.

In the next part we will discuss the rise of streaming and the persistence of its disruption.