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Utility vs Quality
You might still be puzzled about my previous post, and what relevance my Omega Seamaster being replaced by an Apple Watch might have had to the point I was trying to make. Let's cover that here in a short article about why utility always wins in the mass market, how quality, while often being of secondary importance in the mass market, doesn't preclude the success of quality in a niche market.
Technology creates the illusion of improvement through innovation, sweeping away quality in a burst of heat, light and hype, before using the ensuing chaos to deliver on the promise of utility. Think of it as The Shock Doctrine of technological progress. This doesn’t always work though. Sometimes, when utility is not achieved before disillusionment has set in, the technology can take years, or even decades before anyone looks at it again. Speech and voice recognition are slowly regaining the appeal they lost after some embarrassingly public failures. VR is another case in point. VR came to the attention of the market in the 1990s, but it would be more than two decades before utility was achieved, and even then, many commentators could be seen trotting out their mantras of "Fool me once..."
The classic, if tired story of how VHS replaced Betamax, despite the latter’s technical superiority, is often brought up in such discussions. I’ll just offer a couple of points without rehashing the entire history, and then I’ll offer a parallel between this story, and the continuing story of PC vs console.
First, Sony actually only stopped making the tapes in 2015. Wild, right? You see, Betamax didn’t entirely go away. It didn’t go away because the market for utility, is the mass market, where paradigm shifts require massive beneficial transitions for incumbents to be usurped, but the market for quality is a niche market where innovations are only important if they deliver greater quality. These more discerning markets are less cost-conscious.
This is why, while VHS was in control of the home market, professional markets continued with the superior Beta technology. Consider Betacam, the dominant format used by news organisations for years after the home victory of VHS. Betacam was derived from Betamax.
Consider also the music recording industry. The great transition to digital master recordings was facilitated by the Sony PCM-F1, a name ubiquitous among recording professionals, a device on which so many CDs for the mass market were mastered through the mid–1980s all the way through the 1990s.
High quality then, doesn’t go away, it finds a niche where the customers’ priority is quality over utility. Consider also the PC games market. This is a market that ebbs and flows, but has never entirely been usurped by the more mainstream console market. If you want the highest fidelity gaming experience and cost is not a concern, then you will want a PC gaming rig that can cost up to an order of magnitude more than a console.
The second point I want to make about the Betamax story is a challenge to the canard about the wide availability of porn on VHS being the major factor in its victory. This cynical story might be funny to repeat, but the real reason is once again, one of utility: The eventual consumer victory has more to do with the fact that when the first consumer camcorders made their appearance, VHS allowed consumers to view their recordings directly from the camera. You couldn’t do this with the Betamovie format. So you see, ultimately, despite the superior quality of Betamax, VHS didn’t just offer more content, it offered more utility. Utility drives adoption, which attracts content.
If you recall the faux pas committed by Xbox for the launch of Xbox One, you might remember the consumer outrage over the news that games could not be shared, being locked to an account, for a console that would always have to remain online. Now this doesn't sound unreasonable in 2020, but in 2013, PlayStation was able to achieve a decisive PR win by making it clear that games could be shared. This was a story of the vital importance of utility in the mainstream market. Xbox has recovered well by focussing on improving utility across the entire value chain.
Back to music: I have a Linn Basik turntable and a Musical Fidelity X-LPS phono pre-amp setup in my shed. This equipment is 20 years old and still sounds great. How often do you think it gets used? This setup looks great on my shelf, but that's the inevitability of high quality in the face of competing formats offering greater utility, the quality ends up on the shelf.
I have a Schiit DAC and pre-amp stack, and some outrageously expensive HiFiMan headphones, but I will often play music through my monitor via YouTube Music because it’s just less friction. The Schitt stack still gets used, but not as often as it should, even though I spend a lot of time at my desk, which also explains the growing demand for wireless headphones.I’m an audiophile, but even I have sold my soul to the devil of lossy compression.
Life is short, and we tend to optimise for time, especially when the quality is *good enough*. This is why lossy streamed music services on smart phones played through average sounding earbuds won. It’s also why AirPods are probably the most successful consumer device to emerge from Apple since the iPhone, which lest we forget, is 13-year-old technology. It’s why I wear my Apple Watch instead of an exquisitely crafted Omega Seamaster. My Apple Watch just has more utility and the quality is good enough.
And this brings us back to video games. I play on the Switch more than I do my PlayStation 4 or Xbox One. Is it because the Switch and iPhone are “better”? No, of course not, but it’s better in the metric that matters most to me — utility, or put another way, the Switch offers me convenience at a quality level that is good enough.
Why did the Gamecube fail? There are many reasons, but I’m convinced it’s because of its reduced utility. You see, it was the first time Nintendo moved away from cartridges, which is what gave earlier consoles their incredible utility. Suddenly, you had to wait ages for things to load.
There is almost an inevitability to streaming video games as there was for video and music before that. As for the incumbents in this space, well, I don’t know if Stadia will succeed. I hope it does. If anyone can pull this off, Google can, but it's not always the best technology that wins, remember? The greatest infrastructure in the world is not what wins, no matter what the seeming competitive advantage.
A lot depends on Google. I don’t know a lot of developers rushing to make games for it. As a technologist, I’d love to, but have not had the opportunity, sadly. There are two approaches that can help Google. The first is to establish a monopoly in the market. That was what drew so many to PlayStation 2. This is not a given. If you pull it off, to a large extent, you just take your pick of partners and for many, but not all, you get to dictate the terms. It’s much harder to pull off this approach in our hyper-connected era, and PlayStation was riding high on the back of the first PlayStation. The second is to get a compelling engagement programme with equally compelling terms going. I’m not sure this is what Google is aiming for, no matter what the optics suggest.
The utility of being able to play something immediately, without having to update a device or wait for loading is compelling, but utility must be applied across the entire value chain, including content-creators, publishers and consumers. It’s not there yet, but it’s an idea whose time is inevitable, whether it’s Google who pulls this off, or PlayStation, or Microsoft, or a new contender altogether remains to be seen.