In the Mid-1990s,in Hopes of Replacing Consumer Videotape Use in the Viewing

In the mid-1990s,in hopes of replacing consumer videotape use in the viewing of prerecorded movies,two forms of digital videodisk were introduced,DVD and DIVX. While DVD technology was used by a variety of manufacturers (including Sony and RCA),DIVX was a proprietary format developed by Circuit City. Both formats could play DVD movies,which cost about $30 each. However,DIVX movies (which could be played only on a DIVX player,and not on a DVD player)could be purchased for $5 and viewed for 24 hours,with the ability to view them renewable (including perpetual viewing)for a reasonable charge and a telephone call. Circuit City believed that consumers beginning to buy videodisk players and disks would prefer its format,since the disks were less expensive and offered the convenience similar to a rental with the option of a purchase (conveniently,by telephone from home)at a later date. However,the DIVX format never took off,and in mid-1999,Circuit City announced that it was being discontinued. This left DVD as the dominant format for videodisks.??Relate this example to the model of the innovation stream and corporate attempts to gain competitive advantage through technological innovation. Explain how this competition in formats between DVD and DIVX fits the model of the innovation stream.