“Consider the ultimate conquest of time.”
Why did Betamax lose to VHS?
“Sony, Betamax: It could change your whole way of life.”
Sony's Betamax and JVC's VHS formats faced off in the late seventies and early 1980s.
Betamax was backed by Sony and launched in 1975 in the US, a year and a half before VHS.
Some people even claimed that it was the better of the two systems.
So, what went wrong?
This is one of the most covered format wars.
“Format wars.”
(in notably more basic cabley voice) Yes, that phrase is very basic cable, but
is the drama really necessary?
I mean, we're just talking about VCR here.
The format wars were on.
They raged in Europe, America, even Japan.
The format wars have been covered a lot on YouTube and on the Web, but primarily from
an engineering perspective.
There are really amazing comparisons of the video quality explanations of the tape size.
But I've researched it, and after reading this amazing paper, which pointed me to this
book, I've come to the conclusion that thinking this was a technological battle is kind of
absurd.
It is like discussing inflation by diagramming a nickel instead of explaining the economy.
So I want to start by giving you my take on the worst format wars myths.
First, let's take on the idea that Beta was actually better in a meaningful way against
VHS.
This by Technology Connections, link below, went through insane hoops to ensure a fair
test between the two.
Honestly, the difference is small, and do people really care that much about picture
quality?
“Beta produces the best possible picture.”
“Big deal.”
Now let's talk about recording time.
VHS fans will tell you that's the biggest reason VHS won, because at launch, Beta could
only record an hour and VHS was up to two.
“You can record up to 60 minutes on a single Betamax cassette.”
But look at this chart of recording times for Beta and VHS throughout their runs.
Beta caught up quick, then VHS leapt ahead, then Beta caught up again.
This was a back and forth.
One last one for you.
Here is a chart of price.
See the square in 1975?
Squares represent Beta, pluses and diamonds are VHS.
As you can see, there are price clusters all over the chart as product lines diversified.
Price was a battle, but not some huge total concession by Sony.
Which leaves us with the big question: Why did this happen?
This is VHS versus Beta.
Over time, it won the format war decisively.
How?
These are the covers of The Videophile magazine that I have come to love.
It is a magazine that is all about VCRs.
It features some covers that I don't understand it all, or the relevance.
It includes the founder's trip to Japan and a recurring comic with a pig for…some reason.
It also tells the story of Beta versus VHS, because it started as a newsletter for Betamax
owners.
And by the last issue, it was asking “Wise Man, which is best?
Beta or VHS?”
Beta or VHS.
I'm Jake Lafontrelle.
The Format Wars were a big deal worth billions of dollars.
That's a lot of scratch.
Why are you like this?
This is like the cheesiest— On this show, we're going to cover everything
from Blu-ray, to Laserdisc, to Protestantism.
Let's open The Videophile, November, 1978.
You'll find a David and Goliath story.
But if you don't know about the VCR business, this political cartoon…guess that's it…
VCR political cartoon?
Sure, why not?
It's confusing.
I mean, why is VHS Goliath?
Why is Sony the underdog, David?
Isn't Sony big?
Why are all the stones missing?
And what is the snake that is coming for both of them?
The big players in the VHS and Beta battle were Sony, the inventors of Beta, and JVC,
the inventors of VHS.
But it's way bigger than that.
Each of these companies had to organize alliances to their format, and that is where the format.
The format.
Okay, you go ahead.
You do it.
Well, I have an audition.
I need you to pick him up.
I know it's my weekend.
But how am I supposed to pay you alimony?
Sorry, is this a bad time?
It's fine.
Sorry.
You say it.
Thus, the Format Wars truly began.
The problems were there from the beginning.
Sony was a bit snobby about their new format, partly because it built off of their old standard
called U-matic.
They were kind of bossy to potential partners.
Here is a quote from Fast Forward.
“They didn't ask if we had any questions or had any opinions,” one JVC engineer recalled.
“We had no choice."
So, though they recruited some partners, they acted as kind of lone warriors.
This is when the recording time of a tape mattered, not to consumers because Beta quickly
caught up.
But in the beginning, Sony alienated potential partners by being really sure that they were
right about everything, including a one-hour recording time.
Meanwhile, JVC was trying to win companies over to the VHS cause, and they got a huge
ally – a Goliath: Matsushita.
They're connected to Panasonic, if that helps.
They were the big dog of manufacturing, and they were a slight majority owner of JVC.
So they led the VHS format and others jumped on board.
Check out this chart of groups from the early 80s when the format was already settling down.
Let's just show the US so it's easier to understand.
VHS recruited huge groups and Sony stayed small.
I think that this chart is key.
It shows Beta production in thousands of units from 1975 to 1985.
But now look at the market share chart.
It was a booming business, but Beta, they lost relative size.
Initially, that difference in market share didn't matter that much.
The VCR was conceived and marketed as a machine to time shift – to watch whatever whenever,
whether it was Beta or VHS, letting you know that you could watch time and time again.
You could alter the fabric of time itself.
Seriously, this is how they talked.
In addition to time shifting, you could record one channel while watching another.
There were some network effects in this early stage, but they were minimal.
For example, in this article about choosing video equipment for the law office, which
mentions that law firms might want to tape depositions on the format their attorneys
had at home.
But check out this 1977 Betamax training.
“This is a Betamax cassette, and it's very much like an audio cassette, except that with
the Betamax, you record both picture and sound on the same videotape.”
Home recording was the sales pitch.
The same goes for JVC and VHS, which includes a mime.
I didn't even need another example, but how can you not put it in the mime?
Then the entire market changed in a way that people didn't really expect, and that is where
the snake comes in.
This is the cover of The Videophile.
When they got threatened by the movie studios, the newsletter started as a forum for trading
tapes.
He really wanted “Devil Girl from Mars.”
This comic, for example, says, "Tell him I don't trade with anyone I don't know."
That's trading videotapes.
This was a weird gray market zone initially, and nobody knew where it was going to end
up.
These types of cases even ended up in the Supreme Court for the first few years of VCRs.
It was unclear if movie studios would let them exist.
This was the snake — home recordings were a scary new thing.
Look how Sharp even put a copyright disclaimer on their ad for home recording.
But I'm not going to dwell on the legal stuff here, because what I'm focused on is how the
legal uncertainty had implications for the business strategy.
These salesmen were training in a world where VCRs were meant to record TV shows.
Things quickly changed when the movie studios realized this could be a huge boon for business.
Here's a Warner promo tape from 1983.
So The Videophile survived and now had ads for real Hollywood videos.
Though the legal issues didn't fully resolve until 1984, it was clear even earlier that
the snake was dead.
It was just David versus Goliath, and the fight mattered.
Now there were network effects.
It mattered if you had a VHS or a Beta way more than it used to.
Imagine if you owned a small video rental store.
You wanted to invest your small pile of cash into the format that was going to sell the
most.
And if you were a consumer, you wanted to invest in the format the video rental store
carried the most movies in.
Now imagine you're a movie studio.
The same logic applies there too.
Look at this Videophile cartoon about it.
If you were on a desert island, you needed the right format.
VHS had more VCRs in circulation because they had that bigger manufacturing consortium.
This advantage used to be nice, but now it was crucial for the future of the format.
The old man on the mountain knew which one was best.
It was the one that was biggest.
So why should we care about any of this in 2023?
“The Sony Betamax…and its only purpose is to serve you.”
Basic histories almost universally blame size, cost, other tech stuff for the failure of
Betamax.
But all the histories I read have me completely convinced that stuff was irrelevant.
Success was about which format could flood a giant, giant market.
Look at this chart of production capacity.
In 1978, Matsushita and the VHS group doubled Beta.
They could flood the market just as network effects began to matter.
It is easy to think of technological success as a battle purely based on how good a product
is.
But I think the history of VHS and Beta shows us that it can sometimes be about sheer numbers
that you assemble to fight in the battlefield and that is why I think, as basic cable as
it is, the name format wars, it's not that cheesy.
Go ahead.
Really?
Take us out.
These were the format wars.
All right.
That's it for this one.
Thank you for watching.
If you haven't been here before, this is a personal channel.
I post personal videos, history videos, stuff like that.
I really enjoyed delving into all this VCR history.
There's so much more there about the culture of VCRs.
So I'd love to know if you have anything to share about that.
I left out a "be kind, rewind" reference in the script, so feel free to put that in the
comments.
Also, if you think I got it wrong on the battle between Beta and VHS, I am open-minded and
there are lots of links below if you want to argue about it.
Otherwise, I have a reaction video to this one over on Patreon.
It's been growing into a nice community where we can talk a bit more about the topics as
I'm developing them and then once the videos have come out.
I think that's it, and I hope to see you in the next video.
All right.
Thanks for watching.
Bye.