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

In this paper, we empirically test for network effects and preannouncement effects in the DVD market. We do this by measuring the effect of potential (incompatible) competition on a network undergoing growth. We find that there are network effects. We also find that the preannouncement of DIVX temporarily slowed down the adoption of DVD technology.