Beta vs. VHS
The availability of a wide variety of software is the reason the Windows Computer Platform won its huge market share over Apple, even though the Apple Platform was better and easier to use. It's also why the VHS Recording Format beat the Beta Recording Format, even though the Beta picture quality was far better in detail than the VHS.
And it's the same lack of attention to marketing realities that is going to cause 24/7 cable news programming and the World Wide Web to replace the big-three networks along with newspapers as traditional sources of news. This just goes to prove again, "The more things change, the more they remain the same."
(For an excellent site on journalistic standards, please visit Rhetorica.)
The Apple vs Windows Computer Platform War:
To help you understand what happened in the Beta vs. VHS Format War, it makes sense to first discuss what happened in the more recent Apple vs. Windows Platform War that younger readers will probably be more familiar with.
While the Windows Platform in many discount stores had shelf after shelf filled with a wide variety of software programs and games available for sale, the Apple Platform did not. An Apple user would be lucky to find a small area in the store dedicated to their software needs that would work with their platform, sometimes product limited to only a few shelves that were difficult to locate while shopping. Windows, on the other hand, had a huge variety of word processing programs, spreadsheets, business programs, utilities, and games, games, and more games, not to mention the free shareware that was rapidly becoming more available for downloading over the Internet.
While Apple literally owned over 95% of the professional graphics arts business when Windows 3.1 entered the market, the other applications were small, Apple relying on its cult-like following to promote its brand name. But in business, this is not the kind of formula that creates the real-life survival numbers that are needed to move a ton of product. It's this kind of movement that is responsible for reducing the price of the next generation of product. It's the fuel that shifts a platform engine into high gear to literally fly to the head of the pack.
Because of Apple's continued loyalty to its users that represented only about a 5% market share, Apple was not able to move near enough machines out into the field. Relying on cult-like users to move a format into mainstream is like relying on relatives to get a job interview.
The lack of machines in the field unfortunately creating a lack of users. With fewer users to convince software and hardware providers to invest their money into new programs and add-on products to support more applications for the Apple Platform, only a few revised and new innovative products made their way onto store shelves the following year. Without these innovative and new software products to encourage users to buy Apple, Apple had no hope of catching up to Windows.
As Apple tried to develop software partners to work with, the Windows Platform went after relationships with manufacturers to produce more Windows-based machines with brand names that included IBM, HP, Compaq, and eMachines to name a few. These companies displayed their logos on machine covers along with the Windows insignia that was stuck to monitor screens, easily viewed by the customer on the product shelves of new discount stores across America. In the end, with so many brands trying to move their Windows-based machines out to a waiting public, the sucking sound created a price war among Windows Computers and add-on accessories that were filling the growing number of discount computer stores that were popping up all across the country.
So instead of Apple vs. Windows in the discount stores, the price war was between Windows and Windows.
This decision by Microsoft to move tons of Windows-based
computers through the pipeline allowed tons of new users to be
created. Related software and accessory after-market manufacturers
were then able to sell skid loads of goods to them, in turn realizing
generous profits that in part would be available to reinvest in their
next generation of upgraded products.
That's a very good question, one that Apple should write a book about (or may have already). They might consider titling it, "Too many Apples under the tree and not enough in the garden."
The Beta vs. VHS Format War:
The Beta recorded excellent picture quality that was far better than VHS (Video Home System.) It used a smaller-sized cassette case, important when mailing copies of tapes of video home movies to friends and relatives. And at three-copy generations down, you could still recognize your friend's smiling face when played back on the Beta machine. On the VHS machine at three-copy generations down, you were lucky to recognized your friend.
VHS, on the other hand, was the first to introduce a national marketing promotion that displayed a slim, portable-looking VCR (Video Cassette Recorder) System that included a side-by-side tuner and recorder, a built-in clock (up to then optional, if you can believe it), three-hour recording capability (Beta had only two), and three-free recording tapes when the unit was purchased during the promo (tape wasn't cheap.)
This new slim-looking VHS VCR format from Japan was sold in America by a solid, consumer-recognized American brand name, the Radio Corporation of America, RCA. At that time, RCA was still an American-owned company for our younger readers. It just goes to prove you'll always find strange bedfellows when it comes to making money.
Matsushita Electric Company of Japan manufactured the product that RCA was selling against the Beta VCR manufactured by another Japanese company, Sony Electronics Company of Japan, which they marketed through another tried and true American television manufacturer, Zenith Electronics Company.
And to prove that Matsushita understood the importance of getting products into the field, as Windows would accomplish in the coming platform war, during the first full year in which RCA was selling the Matsushita Format, the Matsushita brand name in America, Panasonic, would not be selling the same unit against RCA.
And to make matters worse, Sony was the first to have developed the VHS M-Wrap, giving it up in favor of the Beta wrap, which allowed a higher-writing speed that translated on playback into a more detailed television picture. Sony was betting that this would be the deciding factor for people when deciding to buy a VCR.
Matsushita, on the other hand, had picked up the technology abandoned by Sony and promoted it through another company it owned a majority of shares in, JVC, JVC having purchased the tossed patient from Sony.
With Sony now believing it had discovered a better tape wrap technology with a faster writing speed for an outstanding playback picture, it went to the bank with its marketing directive that the number one feature the consumer would want when buying a VCR format was the picture quality on the screen. That was because at that time there were basically no rental movies, VCR's used to create and playback home movies or special network shows off of television where picture quality was very important. However, recording family picnics was not the number one application for the male buyer of the American family. It was the NFL football game, and it would turn the tables on Sony.
As mentioned, Panasonic's sales force had to bite its lip and wait one year before it could sell the new attractive slim-design VCR in the American marketplace, giving RCA twelve months to build marketshare with Matsushita-built machines. Sony was a Japanese manufacturer. Panasonic was a Japanese manufacturer. RCA was an American TV manufacturer. Zenith was an American TV manufacturer. The players for the VCR format war were in place.
In today's world and to the X'er Generation, this all has no meaning, where products are made and shipped from a blur to them. But back in 1978, it did when America was a manufacturing nation, providing an interesting mix of foreign and American companies. Within a year a winner would be silently declared in the VCR format war. What was amazing is that the loser had no idea the war was over before it had begun.
Because of the innovative marketing by Matsushita and RCA, the following year, 1979, Beta and VHS literally flipped their market shares from the previous years, suddenly VHS had 90% of the market to Beta's 10%. This caused around nine more VHS machines to be available for every one Beta that went into consumer homes. And those consumers were now ready to playback rented movies from the new boy on the block, the local video store. In the end, these numbers would dictate how the video store owner would run his business.
Here is how it worked.
Mainstream movies duplicated by Hollywood studios to video tape were bought in quantity, by title, through small, independent, entrepreneur video store owners across America who were willing to gamble their own bucks. These were the pioneers of the videotape movie rental industry. These small owners could not "floor plan"** the huge quantity of rental tapes that were needed to attract customers, instead needing to pay cash upfront. And on top of that, they had to carry two tape formats on each popular title, one for Beta and one for VHS, the cash outlay being a huge gamble. The owner would make his money back only on what he called "turns," the number of times a single titled was rented over its useful life.
As each store owner ran their individual rental store business, they quickly discovered that the VHS movies rented four, five, or six times faster than the Beta titles . . . the VHS movies providing the turns and the profits, while Beta titles stayed on the shelf with very few turns.
Seeing the "green" coming across their counters for rental of VHS tapes, it didn't take long for store owners to realize that stocking Beta directly affected their profit margins, quickly and almost overnight, dropping the entire Beta movie format altogether and selling the cassette titles to get them out of the store, freeing up more shelf space for new incoming VHS movie titles.
Beta owners found themselves walking into video stores across the country looking for new Beta movie releases, discovering their format was no longer on the shelf. In fact, in many cases they found themselves with no movie titles at all. They instead were suddenly forced to drive twenty to thirty minutes from their home just to rent a movie that would fit into the slot in front of their Zenith, Sanyo, and Sony Beta machines, not to mention having to drive the movie back for return.
A few video-store owners did carry only Beta tapes, realizing that Beta owners were trapped and had no other place to go, their turning a negative into a positive to create a profit center for themselves. However, as fewer Beta machines sold into the early 1980's, these stores had a clock ticking over their heads. Eventually, they would have to bow down to the winner of the VCR format war, VHS.
About the same time that video rental houses figured out what was going on in the market, neighbors, who owned the different formats, soon discovered their rented tapes could not be traded, either. It was amazingly simple. The VHS movie tapes would not fit into the Beta's slot on the front of the machine, and the same vice versa for Beta to VHS. And there was no adapter available to buy to play the Beta tape in the larger slots of the VHS machines. While the two technologies used a 1/2-inch videotape width, the machines wrapped the tape differently around the drum head located inside the machine.
And on top of that, while newer Beta machines were being manufacturer for the longer desired recording speeds, called Beta II and Beta III, these new speeds were not compatible with the older Beta I speed. Suddenly, if you can believe this, Beta's most loyal customers couldn't playback their original recorded tapes on the newer Beta machines when their older machines broke down. I think that's when the word "bummer" came into vogue along with some other words to describe the original Beta owner's frustration of being tossed to the wolves.
While I was on the road, some dealers told me that new Beta owners actually returned their new VCR to the dealer the next day. Why? Because the machine's slot was the wrong size for their neighbor's rented movie cassette tape. It was called the "block effect" . . . homeowners buying VHS machines so they could trade rental movies with their neighbor who owned the same format and most importantly, the same tape-slot opening.
Sony realized too late what RCA's marketing had done to capture the amazing marketshare in such a short period of time using very effective and unique promotion and product; a side-by-side VCR and electronic tuner with remote and three-hour recording time that sold with three-free LP (long play) tapes to get the consumer immediately started with their recording . . . three-hours being the magic number to record an entire football game. While Sony also developed a small three-hour recording machine a year later, as mentioned above, which was called the Video Director through their American distributor, Zenith, the damage had already been done.
Sony even tried a mail-in promo in the very early 80's to move movies for its dying Beta format, as if they were a tiny Netflix. The DVD coming technology would be cheaper to mail, unaffected by magnetic fields, and less bulky to handle. Also, the sophisticated Java software, JaveScript language, and server technology was not yet available to manage databases that would watch over the inventory and mailings to potentially millions of customers. Rental movies being mailed were still twenty years away in spite of Sony's efforts.
While the Beta picture was great for recording family videos and early on could provide slow-motion, reverse slow-motion with steady picture, and Hi-Fi stereo sound that VHS could not feature in its early products, Matsushita and its manufacture licensees quickly caught up and within a year their new machines not only had these same advanced and desired features, but some even performed better than on the Beta.
Sony had truly lost the war before the battle had even begun.
But about a decade later and true to form, Sony finally began to manufacture VHS machines. Their magazine ad was a true Sony classic, as were most of Sony's ads. The right-hand page had large copy that read white on black, one word dropping down below the other until the page had been filled:
Turning the page, you quickly discovered where the ad copy was going, seeing pictures of VHS machines, the wonderful ad copy tagging the marketing campaign's mission,
Addendum - Beta vs. VHS
What is ironic is that for some reason there is now a run on these old Beta machines on eBay, sellers starting them out at $9.95 and getting close to a $100 on the final bid. That's interesting because it's hard to find new and fresh Beta tape. This is surely a fad that will fade for the same reason it faded thirty years ago, along with the problem of parts no longer being available or simply hard to find, these machines tagged as "vintage."
Yet Beta did fine in the broadcast market where the needs were different, its Betacam providing excellent pictures for broadcast applications. And when used with a Steadycam harness, the video cameraman was allowed to walk up steps while recording a professional broadcast image without a single jerk in the final recorded product, the final image looking like it was floating. Today Beta SP is a very popular format with broadcast production groups, a cult following similar to graphic artists loving their Apple Computers.
Ironically, the reason the Beta SP was so popular in the 1990's, and still is today, is because accessories are carried by rental houses all over the world for production houses to use while on the road. The MII broadcast camcorders accessory were not as easily available in the 1990's. Any producer will tell you, time is money . . . and they don't have time to deal with something that is not available around the corner for a PA to pick up.
Sounds like the same complaint that came from the consumer Beta VCR owner, eh? I find that twist amusing, Beta finally figuring it out and in turn extremely successful in the broadcast business. While it was the manufacturers of VHS and MII machines that have had to struggle being accepted.
Go to Chapter 7, "HDTV Programming"
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