Welcome to Tech Stuff, a production from iHeartRadio. Hey there, and welcome to tech Stuff. I'm your host Jonathan Strickland. I'm an executive producer with iHeart Podcasts and how the tech are you? So today I wanted to talk about a particular theory relating to technology. Now, I've done episodes on various quote unquote laws regarding tech. These laws are, you know, like stuff like Moore's law, which today we often interpret as this concept that every two years or so, computing power doubles. The original observation, which was made by Gordon Moore back in nineteen sixty five, was that semiconductor chip manufacturers were doubling the number of transistors that could fit on an inch square wafer of silicon at regular intervals, although the length between those intervals has changed over time, like whether it's twelve months or eighteen months or twenty four months. Moore's argument was that economic factors drove the push to make processors more complex, to cram more components on processors, not that there was some fundamental force that allowed this to happen. And in order to keep Moore's law relevant, we have fudged his observation several times. So rather than talking about physically doubling the number of transistors on a chip, we talk about computational output, you know, like processing speed, that kind of thing, because you can make the argument that the more important thing here isn't how many transistors are on the chep, it's how powerful is that chep? Because doubling the transistors, at least in the early days, was kind of shorthand for saying this processor is twice as powerful as one that came out last year. Right anyway, stuffing Moore's law or even stuff like Worth's law, that kind of thing. That's all stuff that I've I've covered on this show in the past. Today we're going to look at a different theory that relates to technology, and it's all about early adopters. Really, really, it's more than that. It's about the diffusion of innovation. That's what the theory is called. The idea comes from a guy named Everett M. Rogers, who is a sociologist and a professor who in nineteen sixty two published his observation on how societies ultimately accept new ideas, including new innovations like technologies. Now. He described his observation as sort of a bell curve. So imagine a bell curve. Right, it's low at the front end, then it peaks up into a hill, and then it slopes off and becomes low at the back end. Right, So the front end would be a group of people that he called the innovators. This would consist of just two and a half percent of the overall population that ultimately adopts this idea. So not two point five percent of the entire population of the world, just two point five percent of all the people who ultimately adopt whatever it is we're talking about. So these are the innovators. Behind them are the early adopters, and this represents another thirteen point five percent of that population. And then after that you get the majority of adopters and rogers. Divided them into two halves, he had the early majority and the late majority. Each of these consist of around thirty four percent of the population that adopts this idea. Then, bringing up the rear are the laggards sixteen percent of the population. These are the people who are slow to accept this new idea or product, but ultimately they do come around to it. But even with all these there will still be people who just never come around to accepting an idea or technology. So this is really just a way to describe the folks who do now. On top of that, to be considered an adopter, each person first must be aware of how this thing addresses some need or want. It's not enough for it to just be a new whatever it is, a new idea or a new product. That thing has to be able to do something that people perceive as being useful. If it doesn't solve a problem, then the company or person whomever is putting forth this innovation they need to come up with a way to invent a problem that this thing does solve. Steve Jobs is pretty darn good at this. He was good at convincing a general public that new technologies from Apple solve problems they didn't even know that they had had. The adopter also obviously has to make the decision to take the plunge and actually adopt this new idea, and then they have to use it and continue to use it. So the theory also identifies five factors that affect the adoption of a new idea. They are relative advantage. So how and to what extent does this new idea solve a problem or improve upon an earlier innovation. There's compatibility. You know, is the new idea or product or whatever aligned with the values and needs of potential customers. If they're in conflict, people are not going to adopt it. There's complexity. Is the new idea or whatever is it easy to understand and use? That's pretty self explanatory. There's triability, as in, can someone actually give this thing a whirl? Can they give it a test before they commit to adopting it, and if so, that definitely improves adoption. And then there's observability. Is it possible to see or perhaps even measure the outcome of adopting the innovation to say, I know that it has been an improvement because here are the ways I can measure, So can you tell that the thing is working? Generally speaking, this theory, this diffusion of innovation is a pretty decent observation. It's pretty rare for a new technology or idea in general to just take the world by storm instantaneously. Usually this is a process. We should also mention there are additional factors when you take into account technology. This isn't just a case of some people being more adventurous or more open to new ideas. Other stuff makes a really big difference, particularly when we're talking about tech, and one big thing about that is cost, because often when a new technology debuts, it's expensive. Really new technologies take a lot of money to develop and to produce. The companies that are making these things then pass those costs along to us, the consumers, at least most of the time, and that does make sense. You can't go making something that costs you, you know, hundreds of dollars to produce and then you turn it around and you sell it for twenty bucks, because you would be out of business in no time. But this does mean that the folks who will buy your do hiky have to be both willing to adopt something that is new and they have to be able to afford it, and that reduces the potential pool of customers a bit. So let's take the HUM CD player as an example. The first commercially available CD player came out in Japan back in nineteen eighty two. In October of nineteen eighty two. This was the Sony CDP one oh one, and Sony had worked in partnership with other companies like Phillips to develop the CD player technology for the market. So they had been working on this throughout the nineteen seventies, and it sunk a lot of money into making this thing happen, and there were a lot of battles as well to actually ultimately arrive at the CD form factor. The pitch of CDs to the consumer was that they were going to offer far more clarity than other forms of media that were available in the market, like vinyl albums and cassette tapes. But if you wanted one of these first players, you first had to cough up one hundred and sixty eight thousand yen. Now, back in October nineteen eighty two, in the CDP one oh one first debut, the exchange rate of yen to dollars was two hundred and sixty eight point five to five yen to one US dollars. So this would mean that the first CD player costs around six hundred and twenty six dollars in nineteen eighty two dollars. Now, if we adjust that for inflation, that would mean that buying a CD player when it first came out would cost you around two thousand and seventy five bucks or so two grand for a CD player. And here's the thing, other early CD players were even more expensive than the CDP one oh one. And remember this is a brand new technology. There's a limited library of CDs that are even available to purchase to play on the ding dang dern thing. So early adopters of CD tech had to have a lot of income at their disposal as well as a desire to experience something new in the world of audio. That's a pretty small slice of the overall market. Other technologies would follow the very same path. When the first HDTV sets debuted in America, they had a pretty hefty price tag as well. There was a Samsung rear projection HDTV that went on sale in nineteen ninety eight and it sold for eight thousand dollars. That's a lot of money. Eight grand to get an early HDTV. Some things were not quite as expensive when they first debuted. I mean, they would still set you back a good chunk of change, and they were really limited in their initial variations. For example, the first MP three player could only hold half an hour of audio and it sold for two hundred and fifty bucks back in nineteen ninety eight. Two hundred fifty dollars. I mean, that's a good chunk of change. It's not the craziest number we've talked about on this show, but for only half an hour of audio, that's asking a lot. All Right, When we come back, I'm going to talk more about early adopters and how important they are and also how risky it is to be one. But first let's take a quick break to thank our sponsors. So one role that early adopters play, typically at least in the tech ecosystem, is akin to a beta tester. Right. When you're an early adopter of a new technology, you're also a source of feedback to the company, right, Like you can tell the company, hey, this one feature is totally useless, or I really wish this technology had X, Y and Z features, or this is something that is really frustrating when I try and use this tech. So early adopters are often important to a company because they provide information about how to further refine a product so that it will have mass market appeal. You're not going to have a successful business if the only customers you ever get are early adopters and no one else ever follows suit. So listening to the early adopters is really important, and companies might end up in the process, shedding features in order to bring costs down so that the mass market is more likely to accept it, or maybe they're just features that no one found really particularly compelling, or maybe adding in some stuff to create it more convenience. So early adopters play a really vital role for companies, not just in getting the ball rolling for folks to adopt a new technology, but also the refining process. To be able to get there, companies have to do a lot of stuff like make sure that the manufacturing process is refined to make it as efficient and cost effective as possible. Otherwise you're never going to get into a mass manufacturing situation. Like if you're doing everything bespoke and by hand, it's always going to be a niche product. Doesn't mean you can't make a business out of that. You can just look at Bentley for example, but it does mean you're not going to take the pathway toward mass manufacturing and mass appeal. But if you are able to do that, if you are able to take those steps, that's when you can start to see the price tag come down and become more affordable to the general public. Tapping into early adopters requires a particular approach to marketing because early adopters are kind of like visionaries. They like big, bold ideas and they like to take big leaps from where they currently stand, so you have to kind of appeal to that sense. It's almost like a sense of adventure. They get really swept up in the excitement of possibility. By contrast, when you look at the majority of consumers, the mass of people who, if you're lucky, will follow those early adopters, they're once and perspectives are different. You can't use the same marketing approach or you will scare them off. So they want dependability, they want practicality. They want to feel like there is little to no risk when it comes to adopting the technology, and they often will take a wait and see approach to make sure that this new tech isn't just going to disappear in a puff of smoke overnight. They're not foolish to do this. Sometimes jumping on a new tech bandwagon does not pay off. Let's consider one notable example and take the sad tale of the HDDVD format and its fate in the Great Format War. Now we've talked about this particular format war before on the show. Many times. In fact, the birth of tech stuff happened the same year that the death of HDDVD happened, So I talked about it a lot in the very early days with my co host Chris Pollette. But the two main adversaries in this format war were Toshiba, which was the company behind the HDDVD format, and Sony, which of course is the company behind the Blu ray technology. The goal was to bring high definition video to home theater enthusiasts, so that's what both of these technologies were meant to do, and there were technical differences between the two, but for a lot of people there wasn't enough of a difference to make it easy to decide one versus the other. So these two companies each individually announced plans to bring the next generation of home video to the market way back in two thousand and two. That's when they made the announcement. It would actually take four years to do it. However, it did not take long for the two companies to consider trying to work out a truce between them. Because format wars are expensive and they're risky. There is no guarantee that the format you have created is going to win, and if you engage in a format war. At that point, you've already spent millions of dollars on research and development, on production, on marketing, and that money is not gonna return to you. You're not going to get that back, especially if you lose the format war, and consumers obviously are not crazy about format wars either. Competing formats hurts adoption. A lot of that majority in the diffusion of innovation theory will hold back when there are competing formats at play, because no one wants to be the person who's holding the bag who sunk potentially thousands of dollars in a technology that ultimately goes nowhere. Trying to come to some sort of compromise, Tashiba and Sony could find no common pathway forward. The blu ray format could hold more data on a disc, like significantly more, ten gigabytes more in fact, but the HDDVD format was easier to incorporate into computer systems and so would be less expensive to be able to do that sort of thing, and it would require less investment on the manufacturing side, because you could upgrade a current DVD production facility to HD DVD for far less money than it would cost to do Blu Ray, and so Tashiba and Sony both got to work on their respective technologies, which finally launched in two thousand and six. Teshiba tried to undercut Sony. The first HD DVD player retail for five hundred ninety nine bucks, which if we adjust for inflation today, would be nine hundred forty three dollars. That's still really expensive. But Sony's first Blu Ray player retailed for a whopping one thousand dollars. If we adjust that for inflation, that's one thousand, five hundred Sony five bucks. Sony's format cost significantly more than the Tashiba alternative. Sony had one distinct advantage. They had exclusive content. You know, Sony had the benefit of being both an electronics company and also a movie studio, So when you're pushing a home theater technology, it really helps that you're also the source for some exclusive content. By withholding Sony Pictures films exclusively for the Blu Ray format, Sony could apply leverage on Toshiba. Other studios were less eager to throw all in on either. Camp Warner Brothers in Paramount, for example, both chose to release home theater films on each format, and for about a year, Sony and Tashiba were in pretty stiff competition among early adopters. So collectively they sold fewer than a million units of HDDVD players and Blu Ray players, I mean all put together, it was fewer than a million units. Tashiba did have an edge over Sony in the early days. But then Sony pulled another ace out of its corporate sleeve, and that ace was the PlayStation three, and he incorporated a Blu Ray player into the PS three. And while Sony had decided against selling early Blu Ray players below cost of manufacturing, they did not do that same thing for the PS three, and so Sony sold the consoles at a loss. And in fact PS three consoles, a lot of them, were priced lower than the other video players that were on the market. So this got Blu Ray players into a lot more homes. This was a move that really helped tip the scales. But what really got things moving was when other studios began to make the choice of Blu Ray over HDDVD. Now that decision made sense for these studios because they saw the installed base for the Blu Ray format was growing very quickly, much faster than HDDVD, largely due to the PS three. That would mean that they could pick that format and hit more homes and not produce DVDs or discs in both Blu Ray and HDDVD format. They could choose just one and that would cut way back on expenses. So if you're going to make a choice of picking just one format, it makes sense to go with the one that has the larger install base among customers. So that's what they did. Various studios made the decision to go all in with Blu Ray and with Sony, and the very last big one to do this was Warner Brothers, which signaled the beginning of the end for HDDVD. There are even rumors that Sony had made the decision a little easier for Warner Brothers by greasing the wheels with a half billion dollar payoff, but that allegation was never confirmed. As far as I can tell, the death of HDDVD happened pretty quickly near the beginning of two thousand and eight. I remember attending cees that year and seeing the buzz about Tashiba canceling the HDDVD presentation just two days before it was supposed to happen, and that was all because of the Warner Brothers announcement. Later in two thousand and eight, Tishiba announced it would stop production on HDDVD systems, and the format war had ended and Blu Ray was the clear winner. So for some early adopters, the conclusion was a really tough blow because some of those adopters sung a not inconsiderable amount of money into HDDVD systems and libraries. That's precisely the kind of thing that keeps the majority of consumers cautious. It's why they are inclined to hold back upon the introduction of a new technology, particularly if they are competing formats. So that's why early adopters are really important. They're kind of the guinea pigs for new ideas and technologies. It's why the majority is also more cautious. They don't necessarily have the access to discretionary income where they can just spend it on a new technology that may or may not work out. It's why some technologies just fizzle out after a brief period of hype. I think of things like Google Glass. Potentially the Apple Vision pro will follow that same model. We'll have to see. But yeah, I wanted to spend some time to talk about the diffusion of innovation. It is a cool idea and I think it's a pretty valid observation. You know, it's not going to apply universally, but I think it's a good general rule to look at, and it's something that a lot of businesses pay attention to when it comes to how they position their technologies, their new technologies with introducing them to the market. Hope you enjoyed this quick episode of tech Stuff, and I'll talk to you again really soon. Tech Stuff is an iHeartRadio production. For more podcasts from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen to your favorite shows.

Welcome to Tech Stuff, a production from iHeartRadio. Hey there, and welcome to tech Stuff. I'm your host Jonathan Strickland. I'm an executive producer with iHeart Podcasts and how the tech are you? So today I wanted to talk about a particular theory relating to technology. Now, I've done episodes on various quote unquote laws regarding tech. These laws are, you know, like stuff like Moore's law, which today we often interpret as this concept that every two years or so, computing power doubles. The original observation, which was made by Gordon Moore back in nineteen sixty five, was that semiconductor chip manufacturers were doubling the number of transistors that could fit on an inch square wafer of silicon at regular intervals, although the length between those intervals has changed over time, like whether it's twelve months or eighteen months or twenty four months. Moore's argument was that economic factors drove the push to make processors more complex, to cram more components on processors, not that there was some fundamental force that allowed this to happen. And in order to keep Moore's law relevant, we have fudged his observation several times. So rather than talking about physically doubling the number of transistors on a chip, we talk about computational output, you know, like processing speed, that kind of thing, because you can make the argument that the more important thing here isn't how many transistors are on the chep, it's how powerful is that chep? Because doubling the transistors, at least in the early days, was kind of shorthand for saying this processor is twice as powerful as one that came out last year. Right anyway, stuffing Moore's law or even stuff like Worth's law, that kind of thing. That's all stuff that I've I've covered on this show in the past. Today we're going to look at a different theory that relates to technology, and it's all about early adopters. Really, really, it's more than that. It's about the diffusion of innovation. That's what the theory is called. The idea comes from a guy named Everett M. Rogers, who is a sociologist and a professor who in nineteen sixty two published his observation on how societies ultimately accept new ideas, including new innovations like technologies. Now. He described his observation as sort of a bell curve. So imagine a bell curve. Right, it's low at the front end, then it peaks up into a hill, and then it slopes off and becomes low at the back end. Right, So the front end would be a group of people that he called the innovators. This would consist of just two and a half percent of the overall population that ultimately adopts this idea. So not two point five percent of the entire population of the world, just two point five percent of all the people who ultimately adopt whatever it is we're talking about. So these are the innovators. Behind them are the early adopters, and this represents another thirteen point five percent of that population. And then after that you get the majority of adopters and rogers. Divided them into two halves, he had the early majority and the late majority. Each of these consist of around thirty four percent of the population that adopts this idea. Then, bringing up the rear are the laggards sixteen percent of the population. These are the people who are slow to accept this new idea or product, but ultimately they do come around to it. But even with all these there will still be people who just never come around to accepting an idea or technology. So this is really just a way to describe the folks who do now. On top of that, to be considered an adopter, each person first must be aware of how this thing addresses some need or want. It's not enough for it to just be a new whatever it is, a new idea or a new product. That thing has to be able to do something that people perceive as being useful. If it doesn't solve a problem, then the company or person whomever is putting forth this innovation they need to come up with a way to invent a problem that this thing does solve. Steve Jobs is pretty darn good at this. He was good at convincing a general public that new technologies from Apple solve problems they didn't even know that they had had. The adopter also obviously has to make the decision to take the plunge and actually adopt this new idea, and then they have to use it and continue to use it. So the theory also identifies five factors that affect the adoption of a new idea. They are relative advantage. So how and to what extent does this new idea solve a problem or improve upon an earlier innovation. There's compatibility. You know, is the new idea or product or whatever aligned with the values and needs of potential customers. If they're in conflict, people are not going to adopt it. There's complexity. Is the new idea or whatever is it easy to understand and use? That's pretty self explanatory. There's triability, as in, can someone actually give this thing a whirl? Can they give it a test before they commit to adopting it, and if so, that definitely improves adoption. And then there's observability. Is it possible to see or perhaps even measure the outcome of adopting the innovation to say, I know that it has been an improvement because here are the ways I can measure, So can you tell that the thing is working? Generally speaking, this theory, this diffusion of innovation is a pretty decent observation. It's pretty rare for a new technology or idea in general to just take the world by storm instantaneously. Usually this is a process. We should also mention there are additional factors when you take into account technology. This isn't just a case of some people being more adventurous or more open to new ideas. Other stuff makes a really big difference, particularly when we're talking about tech, and one big thing about that is cost, because often when a new technology debuts, it's expensive. Really new technologies take a lot of money to develop and to produce. The companies that are making these things then pass those costs along to us, the consumers, at least most of the time, and that does make sense. You can't go making something that costs you, you know, hundreds of dollars to produce and then you turn it around and you sell it for twenty bucks, because you would be out of business in no time. But this does mean that the folks who will buy your do hiky have to be both willing to adopt something that is new and they have to be able to afford it, and that reduces the potential pool of customers a bit. So let's take the HUM CD player as an example. The first commercially available CD player came out in Japan back in nineteen eighty two. In October of nineteen eighty two. This was the Sony CDP one oh one, and Sony had worked in partnership with other companies like Phillips to develop the CD player technology for the market. So they had been working on this throughout the nineteen seventies, and it sunk a lot of money into making this thing happen, and there were a lot of battles as well to actually ultimately arrive at the CD form factor. The pitch of CDs to the consumer was that they were going to offer far more clarity than other forms of media that were available in the market, like vinyl albums and cassette tapes. But if you wanted one of these first players, you first had to cough up one hundred and sixty eight thousand yen. Now, back in October nineteen eighty two, in the CDP one oh one first debut, the exchange rate of yen to dollars was two hundred and sixty eight point five to five yen to one US dollars. So this would mean that the first CD player costs around six hundred and twenty six dollars in nineteen eighty two dollars. Now, if we adjust that for inflation, that would mean that buying a CD player when it first came out would cost you around two thousand and seventy five bucks or so two grand for a CD player. And here's the thing, other early CD players were even more expensive than the CDP one oh one. And remember this is a brand new technology. There's a limited library of CDs that are even available to purchase to play on the ding dang dern thing. So early adopters of CD tech had to have a lot of income at their disposal as well as a desire to experience something new in the world of audio. That's a pretty small slice of the overall market. Other technologies would follow the very same path. When the first HDTV sets debuted in America, they had a pretty hefty price tag as well. There was a Samsung rear projection HDTV that went on sale in nineteen ninety eight and it sold for eight thousand dollars. That's a lot of money. Eight grand to get an early HDTV. Some things were not quite as expensive when they first debuted. I mean, they would still set you back a good chunk of change, and they were really limited in their initial variations. For example, the first MP three player could only hold half an hour of audio and it sold for two hundred and fifty bucks back in nineteen ninety eight. Two hundred fifty dollars. I mean, that's a good chunk of change. It's not the craziest number we've talked about on this show, but for only half an hour of audio, that's asking a lot. All Right, When we come back, I'm going to talk more about early adopters and how important they are and also how risky it is to be one. But first let's take a quick break to thank our sponsors. So one role that early adopters play, typically at least in the tech ecosystem, is akin to a beta tester. Right. When you're an early adopter of a new technology, you're also a source of feedback to the company, right, Like you can tell the company, hey, this one feature is totally useless, or I really wish this technology had X, Y and Z features, or this is something that is really frustrating when I try and use this tech. So early adopters are often important to a company because they provide information about how to further refine a product so that it will have mass market appeal. You're not going to have a successful business if the only customers you ever get are early adopters and no one else ever follows suit. So listening to the early adopters is really important, and companies might end up in the process, shedding features in order to bring costs down so that the mass market is more likely to accept it, or maybe they're just features that no one found really particularly compelling, or maybe adding in some stuff to create it more convenience. So early adopters play a really vital role for companies, not just in getting the ball rolling for folks to adopt a new technology, but also the refining process. To be able to get there, companies have to do a lot of stuff like make sure that the manufacturing process is refined to make it as efficient and cost effective as possible. Otherwise you're never going to get into a mass manufacturing situation. Like if you're doing everything bespoke and by hand, it's always going to be a niche product. Doesn't mean you can't make a business out of that. You can just look at Bentley for example, but it does mean you're not going to take the pathway toward mass manufacturing and mass appeal. But if you are able to do that, if you are able to take those steps, that's when you can start to see the price tag come down and become more affordable to the general public. Tapping into early adopters requires a particular approach to marketing because early adopters are kind of like visionaries. They like big, bold ideas and they like to take big leaps from where they currently stand, so you have to kind of appeal to that sense. It's almost like a sense of adventure. They get really swept up in the excitement of possibility. By contrast, when you look at the majority of consumers, the mass of people who, if you're lucky, will follow those early adopters, they're once and perspectives are different. You can't use the same marketing approach or you will scare them off. So they want dependability, they want practicality. They want to feel like there is little to no risk when it comes to adopting the technology, and they often will take a wait and see approach to make sure that this new tech isn't just going to disappear in a puff of smoke overnight. They're not foolish to do this. Sometimes jumping on a new tech bandwagon does not pay off. Let's consider one notable example and take the sad tale of the HDDVD format and its fate in the Great Format War. Now we've talked about this particular format war before on the show. Many times. In fact, the birth of tech stuff happened the same year that the death of HDDVD happened, So I talked about it a lot in the very early days with my co host Chris Pollette. But the two main adversaries in this format war were Toshiba, which was the company behind the HDDVD format, and Sony, which of course is the company behind the Blu ray technology. The goal was to bring high definition video to home theater enthusiasts, so that's what both of these technologies were meant to do, and there were technical differences between the two, but for a lot of people there wasn't enough of a difference to make it easy to decide one versus the other. So these two companies each individually announced plans to bring the next generation of home video to the market way back in two thousand and two. That's when they made the announcement. It would actually take four years to do it. However, it did not take long for the two companies to consider trying to work out a truce between them. Because format wars are expensive and they're risky. There is no guarantee that the format you have created is going to win, and if you engage in a format war. At that point, you've already spent millions of dollars on research and development, on production, on marketing, and that money is not gonna return to you. You're not going to get that back, especially if you lose the format war, and consumers obviously are not crazy about format wars either. Competing formats hurts adoption. A lot of that majority in the diffusion of innovation theory will hold back when there are competing formats at play, because no one wants to be the person who's holding the bag who sunk potentially thousands of dollars in a technology that ultimately goes nowhere. Trying to come to some sort of compromise, Tashiba and Sony could find no common pathway forward. The blu ray format could hold more data on a disc, like significantly more, ten gigabytes more in fact, but the HDDVD format was easier to incorporate into computer systems and so would be less expensive to be able to do that sort of thing, and it would require less investment on the manufacturing side, because you could upgrade a current DVD production facility to HD DVD for far less money than it would cost to do Blu Ray, and so Tashiba and Sony both got to work on their respective technologies, which finally launched in two thousand and six. Teshiba tried to undercut Sony. The first HD DVD player retail for five hundred ninety nine bucks, which if we adjust for inflation today, would be nine hundred forty three dollars. That's still really expensive. But Sony's first Blu Ray player retailed for a whopping one thousand dollars. If we adjust that for inflation, that's one thousand, five hundred Sony five bucks. Sony's format cost significantly more than the Tashiba alternative. Sony had one distinct advantage. They had exclusive content. You know, Sony had the benefit of being both an electronics company and also a movie studio, So when you're pushing a home theater technology, it really helps that you're also the source for some exclusive content. By withholding Sony Pictures films exclusively for the Blu Ray format, Sony could apply leverage on Toshiba. Other studios were less eager to throw all in on either. Camp Warner Brothers in Paramount, for example, both chose to release home theater films on each format, and for about a year, Sony and Tashiba were in pretty stiff competition among early adopters. So collectively they sold fewer than a million units of HDDVD players and Blu Ray players, I mean all put together, it was fewer than a million units. Tashiba did have an edge over Sony in the early days. But then Sony pulled another ace out of its corporate sleeve, and that ace was the PlayStation three, and he incorporated a Blu Ray player into the PS three. And while Sony had decided against selling early Blu Ray players below cost of manufacturing, they did not do that same thing for the PS three, and so Sony sold the consoles at a loss. And in fact PS three consoles, a lot of them, were priced lower than the other video players that were on the market. So this got Blu Ray players into a lot more homes. This was a move that really helped tip the scales. But what really got things moving was when other studios began to make the choice of Blu Ray over HDDVD. Now that decision made sense for these studios because they saw the installed base for the Blu Ray format was growing very quickly, much faster than HDDVD, largely due to the PS three. That would mean that they could pick that format and hit more homes and not produce DVDs or discs in both Blu Ray and HDDVD format. They could choose just one and that would cut way back on expenses. So if you're going to make a choice of picking just one format, it makes sense to go with the one that has the larger install base among customers. So that's what they did. Various studios made the decision to go all in with Blu Ray and with Sony, and the very last big one to do this was Warner Brothers, which signaled the beginning of the end for HDDVD. There are even rumors that Sony had made the decision a little easier for Warner Brothers by greasing the wheels with a half billion dollar payoff, but that allegation was never confirmed. As far as I can tell, the death of HDDVD happened pretty quickly near the beginning of two thousand and eight. I remember attending cees that year and seeing the buzz about Tashiba canceling the HDDVD presentation just two days before it was supposed to happen, and that was all because of the Warner Brothers announcement. Later in two thousand and eight, Tishiba announced it would stop production on HDDVD systems, and the format war had ended and Blu Ray was the clear winner. So for some early adopters, the conclusion was a really tough blow because some of those adopters sung a not inconsiderable amount of money into HDDVD systems and libraries. That's precisely the kind of thing that keeps the majority of consumers cautious. It's why they are inclined to hold back upon the introduction of a new technology, particularly if they are competing formats. So that's why early adopters are really important. They're kind of the guinea pigs for new ideas and technologies. It's why the majority is also more cautious. They don't necessarily have the access to discretionary income where they can just spend it on a new technology that may or may not work out. It's why some technologies just fizzle out after a brief period of hype. I think of things like Google Glass. Potentially the Apple Vision pro will follow that same model. We'll have to see. But yeah, I wanted to spend some time to talk about the diffusion of innovation. It is a cool idea and I think it's a pretty valid observation. You know, it's not going to apply universally, but I think it's a good general rule to look at, and it's something that a lot of businesses pay attention to when it comes to how they position their technologies, their new technologies with introducing them to the market. Hope you enjoyed this quick episode of tech Stuff, and I'll talk to you again really soon. Tech Stuff is an iHeartRadio production. For more podcasts from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen to your favorite shows.