Sony’s 1974 launch of its Betamax videotape recording system was a continuation of its record of technological leadership in consumer electronics. In the mid 1970s, however, a second competing standard for videocassette recorders (VCR) was being developed. The strategic issue facing Sony was how to deal with this threat to its own standard.
What factors do make two companies- Sony and JVC different?
Seven months before the launch of Betamax, Sony chairman Akio Morita showed his machine to executives from Matsushita, JVC, and RCA, in an effort to get support for Sony’s design. Sony’s attitude seemed to be: “We completed this one, why don’t you simply follow us and become partners in producing VCRs that use our Betamax system?”
Sony’s arrogant attitude did not go over well with potential partners. JVC replied that it preferred to develop its own technology. Konosuke Matsushita, in turn, was unhappy that he had not been consulted about the Betamax design. He, too, declined to participate in producing VCRs for the Betamax system.
Two years later, JVC introduced the Video Home System (VHS), and in compatible alternative to Betamax. Sony had a head start: when JVC introduced VHS in September 1976, more than 100,000 Betamax machines had already been sold. Several other systems also appeared briefly, but none generated much interest from consumers.
Initially, VHS had a longer recording time but lower picture quality. However, these technical differences were short-lived, and over the next few years the two standards leap-frogged each other repeatedly. Perhaps more important, JVC followed more open policy for partners. Says Morita: “we didn’t put enough effort into making a family.… The other side, coming later, made a family.” By 1984, while the Beta group numbered only a dozen firms, the VHS group included 40 companies, among them Grundig, Hitachi, Matsushita,