Soon after they made the Betamax, Panasonic made the VHS, and they had different strategies. How many of you remember using a Betamax?
Probably very few of you.
That's because of a few very poor tactical moves that occurred in a short two or three year period, that allowed VHS to win the battle and maintain their lead long enough to drown out and eventually completely kill the Betamax.
The format war between Sony’s Betamax and the VHS standard introduced by JVC really only lasted about four years. For those of us who lived through that period, it
certainly seemed like a substantially longer period of time.
Originally introduced in 1975, Sony was actually working closely with JVC to try to get JVC to support the Betamax format in exchange for mutually sharing the patents on the Betamax technology. Sony actually believed that they would gain JVC’s support, until October 1976 when JVC introduced their competing videotape format called VHS.
Did the better format win?
With the benefit of 20 years of hindsight, it appears the products were actually very much alike. They had similar features, similar capacity, and similar quality. But that was not the rhetoric of the day.
At the time, most experts considered the VHS format inferior to the Betamax, and said so publicly. Although no data exists on this, I would imagine all of the diehard Betamax fans of the day were also Betamax owners who wanted the format they selected to win because that would mean more movies were made in the Betamax format, and ultimately the Betamax user would have more choices. But, like other format wars, the consumer was largely left in the middle and for a few years many people stayed out of this new video recorder market while they waited for one of the formats to beat the other.
Despite a strong effort by Sony in 1977, in which they partnered with Toshiba, Sanyo, and Zenith, all of whom agreed to produce the Betamax product with their respective names on the product, it was not enough. By 1980, VHS had 70% of the new market and the Betamax was all but finished in terms of a mainstream consumer product. It wasn’t until 2002 that Sony finally retired the entire Betamax line, which had only been kept alive over its last two decades with the professional–grade Betamax models and a new version that was popular in Japan called the “Extended Definition Betamax”.
The peak of this war really only lasted four years, which was less than half the time of the HD DVD versus Blu-Ray disc format war.
As the 1980s progressed, the only choice a consumer was confronted with was which brand of VHS they wanted to buy, and not whether or not to buy a VHS or Betamax. In the end, the customer was not denied a better product, since both products really performed similarly; and the length of the battle was mercifully short. However, those consumers that purchased a Betamax during those four years certainly didn’t see this upside as their technology became obsolete and they had to purchase a VHS anyway.
Taken from David Schropfer's The Smartphone Wallet - Understanding The Disruption Ahead