Literature Critique:The DVD vs. DIVX Standard War: Empirical Evidence of Network Effects and Preannouncement Effects

The introduction of new technology, DVD, for replacing videocassettes was an open format to avoid format wars. However, preannouncement of DIVX made confusions to the market on different formats. Hence, it had slowed down the adoption of DVD. The effect was short-lived; DVD survived and became a successful technology, while DIVX failed to enter the market. In the following, the success of DVD, the effects brought by preannouncement of DIVX, and the failure of DIVX will be discussed.
The introduction of DVD was a breakthrough video product throughout 1990s. …