Videotapes. They are one of the best viewing formats while I was growing up. I could remember watching Tom and Jerry episodes, and rewinding the tapes over and over to satisfy my cartoon needs at that time. Of course, videotapes are obsolete now with the digital technology age. However, we should not forget the past as they were the king of all formats during the 1970s and early 1980s. It was during this time that VHS by JVC and Betamax by Sony battled each other to win the videotape format war. This week, I am going to take you down memory lane and revisit one of the best wars of all times.
As we all recognized, videotapes are played in VCRs (video cassette recorders) and they have existed since the mid-1950s. Video recordings were a big phenomenon back then, and their developments had plenty of compromise and competitions along the way. In 2006, videotape recorder turns 50. It is important to have a sense of history as the early days paved the way for consumers like you and me to view videos at our own pleasure. Not to stray off topic with all the history, but this is what made the videotape format war possible.
First of, let us take a look at both the VHS and Betamax. The VHS by JVC was first introduced to the mass in 1976, which was a year later than Sony’s Betamax (in 1975). By looking at this, Sony should have a year of time in advantage to market Betamax. Betamax’s technical specifications are also superior compared to VHS’s in its various categories. However, this was not to be as several missteps in strategy happened.
The demise of Betamax was caused by various factors. The most glaring aspect of its downfall was its rental price. VHS offered a lower price than its counterpart, and was more affordable to the public than Betamax was. At that time, rental machines were popular because people did not want to spend thousands of dollars for technologies that may become obsolete. By the time Betamax had a reasonable price; VHS already had the majority of market share. Sony was also reluctant to sign licensing agreements with film studios, and refused any sorts of pornography to be released in its system. Fewer titles meant more power for VHS, and it quickly became the standard of choice for the mass. This article shows why Betamax was a failure despite its superior technology.
Let this be a learning experience for companies today that you have to have both the technology, and the entire consumer support. On top of that, the lack of marketing efforts to reach and appeal the consumers did not help. Solely focusing on your own technology does not guarantee a victory, and it could certainly lead to the neglect of the end consumers. Even today, we almost have mirror image of what had happened back in the 1970s. Sony’s Playstation 3 had a terrible launch compared to its competitors. Although the result is still too early to tell, it looked to be heading the same direction as Betamax. Sony, will you ever learn?
Now that I have taken you back in time, what do you think should we take from this battle?Personally, I think that corporations have the same root altogether. Technology will change and evolve, but their business philosophies and culture will be the same. After all, companies are proud of their origins and they make the companies what they are today.
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4 comments:
I hope I have the correct information. I just read from somewhere saying that Sony is going to stop manufacturing the 20GB PS3. I assume they are going to sell the consoles at higher price with more memory. Under the current circumstances and the online networks of XBOX360 and Wii, Sony is probably going to lose very bad in this battle.
Anyway, marketing is very important these days. In Asia countries, it's more leaning to the HD format, and I doubt many people know Blu-Ray. Hence, among my friends in Hong Kong, most of them purchase a Wii or XBOX360 because of the lower cost and the popularity since Blu-ray technology is not under their consideration in this matter. Even TV Production in Hong Kong is starting to use HD formats. I think this hurts Sony because when they release the PS3 console, Blu-ray was one of their selling point, but now? It's like "Who cares" for non-techy people.
Therefore, I think the Sony marketing people need to work hard a bit on the PS3 console. Otherwise, it might end up like the Betamax case before.
Sidenote: Sony is releasing a few new laptops in Japan this week, and they are equipped with Blu-ray technology, so I think Sony is still working on this Blu-ray format war.
You know this is an interesting case. We always hear that it is important to have a sustainable competitive advantage, but it's very apparent here. And I don't mean that to be about the Betamax. VHS provided a product at a lower cost and offered greater availability and selection. How does Sony market against that? It may have been more technically sound, as the article you cited mentions, but people couldn't tell the difference.
It has to matter, to your business, and it also has to matter to consumers. Consumers have to be able to percieve the benefit in order to value it. I don't think Sony proved that the advantages of Betamax were significant. How do you market without a "percievable" platform? The war was over before it began.
Wow. From what I see, Sony is pretty much done for. Well, just to be a devil's advocat, I think Sony can come out of this battle victoriously.
These are my opinion....
One way Sony can get higher marketshare is through flooding the market with Blu-Ray. Sony's PS3 launch was a wreck. There is no question to that. However, they are still very strong in sales of other product; this is reflected in their stock price. One way they can get Blu-Ray out is to include Blu-Ray in literally ALL their products.
Then, Sony should work on converging platforms. Blu-Ray in PSP and the laptop computers should be compatible with Blu-Ray on their T.V.-in other words, maybe Blu-Ray can work as a wireless chord that allows customers to project PSP or Vaio products onto the T.V. if they are within a certain range.
As far as I know, the capability that Blu-Ray offers right now is just the tip of the iceberg of its true potential. Rather than just hoping for people to use Blu-Ray, Sony should further develop and refine this new technology.
In conclusion - distinguish Blu-Ray from HD. Tell people that Blu-Ray is not a hyper-HD, but something completely different in nature.
while everybody continues where you left off with the video game future, I wanted to comment on the main theme of your article, VHS vs. Beta. Another thing that came to my mind while reading your post was that the VHS companies hit it big with rental machines in rental stores like Blockbuster. I remember back in the late 80s/early 90s going to the video rental chain and seeing VCRs for rent. By penetrating a massive chain like that, VHS proponents solidified their market position in consumer's eyes (both with the VCR and most importantly, VHS tapes) and paved the way for market dominance, until DVDs came along.
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