Videotape Format Wars: How Betamax Really Lost to Vhs

Videotape Format Wars: How Betamax Really Lost To VHS

In February, 1975 the home video standard was set when Sony’s Betamax was introduced into the market. A year and a half later JVC’s VHS hit the market, making their product incompatible with the Betamax format, thus sparking the war for home entertainment between Betamax and VHS. Of course, as we know, the outcome of this war ended with the masses eventually choosing the VHS model over the defeated and eventually forgotten Beta model. What comes into question is how exactly did JVC Company and their VHS model defeat their competitor by such a wide margin by the late 1980’s? Many people claim that VHS’s victory was attributed to its’ superior technology over Betamax. This paper however argues that instead of technological advantages by VHS, the outcome was in fact decided by JVC’s strategic advertising campaign of their product, along with the delay of releasing their product, and deliberate observation of its competitor, Betamax, and their entry into the market. This allowed for a more long term success felt by JVC’s VHS product.

In this paper I will examine the causes that led to the triumphant victory of JVC’s VHS over Sony’s Betamax, despite the fact that Betamax was the first product sold in the market. The first aspect of this topic that I will discuss is the shortcomings that Betamax faced because of their early entry into the VCR market. At this point in time many scholars attribute VHS’s victory over Betamax to their superior technological advantages. During its’ initial launch in 1975 Betamax was the first compact, reliable and inexpensive VCR on the market. The product accounted for a majority of the sales during 1975-77, along with a steady increase in sales until 1985. Due to Sony’s early start in the VCR market in Betamax, the company had the unique ability to shape the products definition, setting the standard in home entertainment systems. However there is some debate on whether or not this was entirely beneficial. In many instances technology markets tend to take years to develop, and being the first to launch a particular product may not be as beneficial as a company coming into to the market second or third. Even though Sony launched their product first, JVC’s VHS quickly took control of the market. In 1977 over 140,000 Betamax devices were sold in the entire year, but in only five months during the same year VHS sold 80,000. One of the primary sources used to support my argument comes from Lieberman and Montgomery’s article “First-Mover Advantages”. This primary source is relevant to my argument because it compares studies of the success rates of companies that have been initial contributors to a newly formed business market, compared to competing companies who have entered at a later date. Companies following the initial movers, in this case JVC’s VHS, had the ability to copy certain features