Why VHS beat Beta: not better, but more useful

17 Dec

vhs vs betaThe biggest battle of the ‘70s and ‘80s may not have been the Cold War but the fight between home video formats VHS and Beta.

Beta enjoyed first-mover advantage, being introduced in 1975. VHS followed two years later. In lab studies, consumers preferred Beta’s (slightly) better picture quality, less distortion, more features, and greater durability. And, hey, Beta was made by Sony, a proven and loved electronics brand.

By the mid-‘80s, Beta was basically dead in North America. Why?

For one, VHS was cheaper. As thrilled as people were to be able to rent movies and record TV, the format wars had them nervous that they may invest $1,000+ in a technology that would become obsolete (so much so that in 1980, 70% of home video players were rented not owned). Buying VHS was less risky.

VHS creator JVC licensed their video technology to other electronics providers to a much greater extent than Sony did for Beta.

Perhaps most importantly, VHS allowed longer recording times (first 2 hours per tape, then 4 and beyond, as compared to Beta’s original 1 hour max). People wanted to record a night’s primetime TV. A football game. Or a broadcast movie. Sony didn’t want to compromise on picture quality and offer longer recording times for Beta. Too bad for them, consumers were willing to make the trade.

Once VHS started to take hold, people rented more VHS movies which led to stores stocking more tapes, which led to more consumers choosing VHS because of the greater selection (what’s known as network effect).

Next time you hold your product spec sheet up to your competitor’s and gloat about being better than them on this-feature or that-feature, take a moment to check how consumers are using the product in their lives. It’s not about being better, but more useful.

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2 Responses to “Why VHS beat Beta: not better, but more useful”

  1. sgoth December 17, 2010 at 12:55 pm #

    I fear that if I was Beta’s account manager and Sony asked me if they should offer longer recording times, I’d have said – let VHS own the ‘longer recording’ space, while we differentiate and capture the ‘better video quality’ market (who have more money anyway, and this positioning is more inline with Sony’s brand). A good reminder that unique positioning is one thing, but a miminal level of acceptable product performance (from consumers’ perspective) must be met.

    Anyone remember what the first movie they saw on VHS was?

  2. dougbrowncreative December 17, 2010 at 2:28 pm #

    I remember my first VHS movie Shane but I can’t share it here.

    In other news, the most interesting part of this post was how JVC won by allowing their technology to be copied by the competitors, thus increasing demand for the format. Sony went the other way, husbanded their technology and ended up alone and on a short plank.

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