The first to offer videocassette technology, Sony and its Betamax format were quickly defeated by VHS technology.
In 1975, Sony introduced the Betamax to the U.S. market. The half-inch (12.7-millimeter) tape format videocassette recorder (VCR) had a one-hour recording capacity. It sold for $2,300 and included a television set. Sony had previously released the U-Matic VCR in 1972, which was available to the television industry and for educational and other institutional uses, but it was not marketed to the general public because of its large size and considerable cost. The release of the Betamax to the general market was challenged by Universal City Studios,
When Sony introduced the idea of the Betamax recorder to Universal in a memo requesting approval of the use of the names of two popular television shows in its advertising campaign, Universal saw a potentially bigger concern. It was the first time the general public would be able to record television shows in their entirety and replay them at their leisure. In addition, Sony and Universal had been in discussion to create DiscoVision, which was a playable laser disc with no recording capability. Universal took the position that television shows are intended to be viewed in real time and for private use only. Enabling the recording and replaying was thought to violate the fair use doctrine of copyright law, which prohibits duplication for anything other than limited purposes, such as education.
Betamax was released to the market in 1975, and Universal pursued legal action. In the case of Sony Corp. v. Universal City Studios, Inc.
Morita made a fatal error when he refused to license the technology and failed to create a market for the Betamax by bringing other companies into the discussion about the design and technology. Prior to the launch of Betamax, Morita presented the Betamax to competitors Matsushita, Victor Company of Japan (JVC), and RCA in an effort to garner support for Sony’s product. Sony had already begun manufacture of the Betamax, and making any changes to the design or technology would have been a costly venture. Morita’s approach was perceived as arrogant, and prospective allies quickly became aggressive competitors. JVC was already developing its own technology, and Matsushita declined to produce VCRs for the Betamax system.
In 1977, JVC
Sony Betamax VCRs for the American market. Sony stopped producing Betamax models in the late 1980’s and switched to the VHS format.
JVC set itself apart by having a closer relationship with some of the largest electronics producers in Japan, Europe, and the United States. These relationships provided VHS with greater consumer trust, and the network provided consumers with the sense that there was broad support for their products. Furthermore, the VHS technology advanced more rapidly because so many companies had contributed to its design and manufacture.
In 1978, the Betamax format declined in market share compared to the VHS and continued to decline. By 1979, VHS had a six-hour recording capacity; Betamax had only half of that. Sony stopped producing Betamax models for home use by the end of the 1980’s and started producing VHS recorders in 1988.
By many accounts, Morita’s attitude regarding the superiority of his products and his company caused problems for Betamax. Morita was unwilling to change the way he did business to accommodate his interest in bringing Sony to the United States. However, after the Betamax debacle, he did recognize the need to change his approach and to be open to building networks.
Prior to the Betamax, Sony standards were benchmarks for the industry. Sony’s unique method of developing a market by creating products and then building the need—instead of supplying an existing demand—set the company apart and eventually helped the demise of the Betamax. Sony, guided by Morita, was unwilling to license the Betamax technology, which would have allowed other companies such as Hitachi to put their name on Sony products. Sony’s unwillingness enabled JVC to license the VHS machines, which by many accounts were inferior to Betamax, to other companies. The result was that the VHS format dominated the market. According to a number of accounts, this experience helped change the way Sony did business and enabled the corporation to recognize that the software (movies, tapes) creates the success of the hardware. Recognizing the need to have its hardware strongly supported by its software, Sony acquired CBS Records in 1988 and Columbia Records in 1989.
The Sony case was referenced in 2005 during the Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd. Supreme Court case, in which the Court ruled that Grokster and StreamCast Networks were liable for users’ copyright infringements on peer-to-peer file-sharing software. Before the decision, lower courts had cited the 1984 case and stated that the manufacturers were not responsible for user infringement.
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Kloppenstein, Bruce C. “The Diffusion of the VCR in the United States.” In The VCR Age: Home Video and Mass Communication, edited by Mark R. Levy. Newbury Park, Calif.: Sage, 1989. Discusses the widespread and rapid adoption of the VCR technology. Provides a detailed chronology of events related to home video. -
Lardner, James. Fast Forward: Hollywood, the Japanese, and the Onslaught of the VCR. New York: W. W. Norton, 1987. Picking up where The Sony Vision ends, with the Betamax, the book provides a detailed and informative account of the history of the VCR. -
Lyons, Nick. The Sony Vision. New York: Crown, 1976. Thorough coverage of the Sony Corporation and its culture by a non-corporate-sponsored author. Lyons provides insight into Sony’s Akio Morita as the guiding influence of Sony from its inception to 1976. -
Morita, Akio. Made in Japan: Akio Morita and Sony. New York: Dutton, 1986. Autobiography of Sony’s cofounder.
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