Problem Paper No. 3:
September 24, 2011
In 1975, Sony entered the videocassette recorder market with its introduction of the Betamax, followed by VHS in 1976. The Beta was the first compact, inexpensive, reliable videocassette recorder. The Beta led VCR production and sales from 1975 to 1977. Despite the fact that Sony was first to enter the market – and arguable had a better product than JVC’s VHS, it was surpassed by VHS in 1978 and continued to lose market share until it was removed from production by Sony in the late 1980’s (Cusemano).
In the case of Beta versus VHS, VHS successfully copied many of the market leader Beta’s desired features but in such a manner that it differentiated its product, creating a new category which was favorably received in a mass market (Cusemano). Due to differing formats, tapes
were not able to play interchangeably on either machine – ultimately, customers had to choose one category or the other.
Both Beta and VHS offered ease of use, but with differences in technology. Beta claimed to offer better picture quality than its competitor, however this would later prove to be less important when compared to the more competitive pricing offered by VHS. An important feature – and an exclusive one that influenced how customers perceived the VHS – and one that may have ultimately cost Beta its market position: VHS tapes initially recorded two hours versus one hour (Beta). This was an important development for consumers since most movies ran approximately two hours. Although Beta later increased their tape recording capacity to five hours, they never caught up with VHS, which was later able to record up to eight hours (Time).
Affordability was another major issue – and a major reason for Beta’s downfall. Sony assumed that quality was the customer’s primary concern however VHS machines, components and tapes were less expensive than their counterparts. The Beta marketing strategy mistakenly assumed...
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