Lessons From Betamax

Post by Steven Dale

Image by flickr user Nesster.

In the late 1970’s and early 1980’s Sony and JVC waged a war between their respective Betamax and VHS video cassette formats.

Early consensus (my dad included) favoured the Betamax format and its superior image and picture quality. Beta also had the advantage of a two year head start over the VHS format.

And yet, Beta lost.

What went wrong for Sony and Beta? Many things, here are a few of them:

One: Cost – Beta was more expensive than VHS.

TWO: An Army of One – The Beta format was owned by only one company (Sony) while the VHS format was licensed by its owner (JVC) to dozens of other companies. These companies, each with their own profit motives, flooded the market with the VHS format.

THREE: Can It Do What I Need It To Do? – Initially, Beta could only offer recording times of up to 1 hour. VHS offered times up to 2 hours. How can you fit a 90 minute movie on a single Beta cassette? Simple: You can’t. See point Four.

FOUR: The Books Are More Important Than Your Library – Beta had an incredibly limited catalogue of movies on offer in the Beta format as compared to VHS. VHS would continue to increase and hold this advantage throughout the format war. A device whose explicit purpose is to consume media requires media to make it useful, valuable and coveted.

FIVE: Perceived Value – As the format war progressed, recording times were increased such that VHS offered recording times of up to 10 hours whereas Beta offered only 5. Didn’t matter that the vast majority of people would never use those 10 hours. Didn’t matter that recording in 10 hour mode resulted in abysmal picture and audio quality. The perception was that 10 is bigger than 5 and in the customer’s mind, bigger is typically better.

SIX: Men Will Be Men – Sony would not initially allow pornography to be distributed on the Beta format. VHS? No problems. And as we know, virtually all new media is driven – at least in part – to the masses by pornography. That’s not a moral statement, either, just a statement of fact.

SEVEN: Peer Pressure Is The Best Marketing There Is – VHS had a viral edge over Beta even back when people didn’t obnoxiously overuse the word ‘viral’ (as I just did). As more and more people began to opt for the VHS format, so too did their friends and family. One of the appeals of VHS was the ability to share tapes and home movies. Anyone who had a Beta system was left out of this virtuous circle of sharing and was – for all intents and purposes – forced to adopt the VHS format. The more people using the VHS format, the greater the gravitational pull towards it.

The reasons Betamax lost had absolutely nothing to do with quality of format, they had to do with marketing. The “best” technology simply isn’t always the best marketed. One could even argue that the “best” technology is often the worst marketed as the companies behind said technologies are blinded to their marketing needs by the sheer fact of their technology’s Superiority.

To this day my father still insists that Beta was “superior” to VHS, but that’s probably just so he can reconcile being caught on the losing side of the battle. He may have picked a losing horse, but damn, if he didn’t pick the best horse.

Doesn’t matter though, he still picked the wrong horse.

Superior don’t mean nothing. And there’s no reason to believe that doesn’t apply to transit technologies as much as it does to video formats.

(Note: My father has since moved on from his Betamax trauma and is the proud owner of a Blu-Ray DVD player.)

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Want more? Purchase Cable Car Confidential: The Essential Guide to Cable Cars, Urban Gondolas & Cable Propelled Transit and start learning about the world's fastest growing transportation technologies.


  1. When it comes to different formats in the world it almost always comes down to one surviving format (for the same particular thing): CD vs. MiniDisc HD DVD vs. BluRay Windows 7mobile vs. Google Android vs. Symbian and I think there was a similar format to DVD a while ago (and mostly it is because one "clever" company decides it is a must to introduce a different format - because it can do the same or is better, or maybe even a bit cheaper, but it comes with licenses). Intercity Express vs. TGV was a bit different, though pretty similar. It is a bit funny the which-horse.are-you-on slogan was mentioned a few times recently, cause going on with Symbian & Windows Phone 7 is claimed to "run a dead horse" in certain circles (at least for smart phones). http://www.blogcdn.com/www.engadget.com/media/2011/01/11x01311109nd.jpg
  2. It was not Mini Disc vs CD but Mini Disc vs DAT (Digital Audio Tape) and DCC (Digital Compact Disc). Altough MiniDisc was the Winner in that battle it lost against MP3 Players with various formats (even before the rise of the ipod). Today nobody will purchase a mobile audio player with a rotating disc or a tape. Flash memory with no moving part is so cheap nobody could even dream about it in the late 80s. For means of transport it is not that easy. I am a pedestrian, a cyclist, a train passenger and sometimes a car driver an airplane passenger etc. And especially for transit you pay only the usage. So no sunk cost for a expensive video player which only plays videos approved from company.
  3. Yes, right. After that first Mini Disc battle I remember the next one against CD. There were portable CD Player as well as Mini Disc player and also the same just bigger for Hi-Fi-Systems. The Mini Disc corners however disappeared in stores while CD remained. (sort of similar to the time when there were HD DVD sections as there were Blu Ray sections). In the end I think CD lost its battle against mp3 and flash memory. I'm not going to search for proof, neither saying you are wrong, I'm just mirroring history right now from my perspective - as objective as possible ;)
  4. I think at the end of the day what I'm trying to say here is that superiority of technology is irrelevant in the face of sound and effective marketing. There's very little discussion about how transit is marketed and sold. We always get caught in arguments about why such and such a technology is better or worse than another and yet we never take the time to look at the strategies and tactics being deployed by the transit industry.
  5. A real good product doesn't need a lot of Marketing. For example MP3 had very little marketing and all big companies where against it. Before the iPod only small companies made MP3 players. If a technologies is really superior it doesn't need much marketing.
  6. @ Matthias, I'd argue that the MP3 player had enormous marketing behind it. It may not have been what we traditionally believe to be marketing, but don't think for a minute that Napster wasn't marketing.
  7. Well file sharing is more convinient, faster, has millions of files for no cost. There is no existing transit technology which even gets close to it. We will have to wait for Star Trek style transporters for this. Detachable Gondolas are too long on the market. If they are really that superior it will be an established urban transit since decades.
  8. @ Matthias, re: "millions of files for no cost." What happens when you make transit free? I'm not suggesting that's the way to go, but I am suggesting that it is a solution to the problem of ridership that has nothing to do with the product and everything to do with the marketing. "Free" after all is about marketing and sales, not price. I'm not saying gondolas are superior or other transit technologies are inferior. What I'm saying is that when everybody debates the "quality" of a particular transit technology, they ignore the fact that "superiority" is almost irrelevant. As much as we'd like to believe planners, politicians and policy-makers are making informed decisions about whatever technology they're looking at, marketing more than anything else is what determines what gets built.
  9. It is not only about the price. Those files are incredibly handy, especially for that time (in case of virtual size as in case of physical size - like on a media). And of course all big labels were against it: it was a rolling stone (napster wasn't necessary) they didn't know how to take advantage of. "A real good product doesn’t need a lot of Marketing." vs "marketing more than anything else is what determines what gets built." Both is right. Again one thing is a rolling stone with almost no costs behind, just the best option and the other one takes huge investments (financially and logistically) which need to be planned precisely. One thing is obvious and the other one has so many founded pro-and-contra-factors within you will have to decide. That wouldn't be necessary if that product is so good when the only situation would be a win-win-win-win...-one.

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