1c presentation-vh svs-beta

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1c presentation-vh svs-beta

  1. 1. Extract of the original promotion video of Betamax 1974 1
  2. 2. Sony Betamax DonatoVerardi, Marcel Sutter, Oliver Stampfli, Patrick Hammer,Thomas Thalmann The Real Story 2
  3. 3. • Creation of new market • Making Betamax a standard • Betamax evolves • The format war begins ... Report Agenda 3
  4. 4. • Before 1974 • Sony’s U-Matic is de facto standard for professional video recording • But U-Matic devices too large and too expensive • Home video recording inexistent! Betamax to create Home Video Recording Market Creation of a new market 4
  5. 5. • Late 1974 • Sony cannot move alone ... • ... tries to convince former U-Matic partners ... • ... but Matsushita, JVC and RCA reject. minimum 2 hours playing time required! Making Betamax a standard 5
  6. 6. • Up to September 1976 • 1975: Betamax launches the market • No OEM nor licensing • Sony is developing 2h-Betamax Behind the scenes: JVC works on own format Video Home System - VHS Betamax evolves 6
  7. 7. The format war begins ... 7
  8. 8. VHS launch • September 1976 • 2h-VHS launch • But 2h-Betamax is coming shortly Is Sony ready for the battle? 8
  9. 9. Betamax VHS Has Sony done enough? ? Values from “Strategic Maneuvering and Mass-Market Dynamics:The Triumph ofVHS over Beta”, M.A. Cusumano,Y. Mylonadis, R. S. Rosenbloom;Table 1 Cumulative Production 9
  10. 10. • Q1: How did Sony prepare to make Betamax a standard? • Q2: Sony’s advantages from being first-to market and how did they lose them? • Comparison: JVC scored with ... Analysis Agenda 10
  11. 11. • High quality technical research leads to high quality and revolutionary product • Set manufacturing in place • Market research to know customer needs Overconfidence in the successor of U-Matic by researchers and management They have no flexibility to change Betamax 1 “We don’t believe in market research for a new product unknown to the public…so we never do any.We are the experts!” by Akio Morita Preparations for Betamax 11
  12. 12. • 100% market share, but Betamax 2 (March 77) was incompatible with Betamax 1 !!! • No competitors, but failed to flood the market • no licensing for Betamax 1 • no OEM contracts • not enough manufacturing capabilities • too few alliances Missed Advantages Market share of Betamax in October 1976 12
  13. 13. Alliances Sanyo Toshiba PioneerAiwa NEC Sonyoverall 12 MatsushitaSharp RCA Brother Nikon Canon TelefunkenBlaupunkt Magnavox Hitachi JVCoverall 40 Olympus Mitsubishi Richo Akai Clarion Teac Thomson Fisher General Electrics Granada in 1983 13
  14. 14. • Matsushita • took decision to produce 3-4h tapes for RCA • Flexibility to change theVHS format • Encouraged partners to participate in project • Licensing and OEM • They could build a lot of alliances • Complementary assets (1980 and later) • Video rental market JVC scored with ... 14
  15. 15. Betamax VHS Values from “Strategic Maneuvering and Mass-Market Dynamics:The Triumph ofVHS over Beta”, M.A. Cusumano,Y. Mylonadis, R. S. Rosenbloom;Table 1 Cumulative Production 15
  16. 16. Q & A Questions? ... thanks for your attention! 16

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