I could talk to you about Coca-Cola's most
famous failure but you probably already know that story. And if I begin this
blog with a food products story I could myself commit a marketing failure, as I
won't give you a serious and professional image of what this blog is and what I
want to do with it. You would tell me, and you would be right to tell me that,
"what is the point of creating a blog filled with stories that everybody already knows, and that you can easily find on several blogs?"
That is why I will begin with the story of Betamax, from Sony. This video cassette recorder for individuals uses the Betamax technology and is developed in the 70s, before its launch in 1975. 30 000 exemplars are sold the first year in America. But in 1976, JVC, Sony's rival, introduces its own technology: the VHS (Video Home System), and agrees to share it with other Japanese companies. These two formats are incompatibles and therefore consumers have to choose between a Betamax video recorder and a VHS video recorder. Sony’s rivals begin a price war that they win: the price gap between some video recorders reached 300 dollars. In spite of the acknowledged higher quality of the Betamax recordings, they attract less and less consumers because of one main issue: its higher quality in terms of image and sound is the cause of a limited recording capacity of one hour per tape, which means that any film or football game requires at least two, sometimes three tapes to record it from the beginning to the end. When the Betamax technology was excellent but not practical, the VHS one was acceptable and practical. In 1987 the VHS market shares reach 95%, and the following year Sony launches a VHS video recorder range.
That is why I will begin with the story of Betamax, from Sony. This video cassette recorder for individuals uses the Betamax technology and is developed in the 70s, before its launch in 1975. 30 000 exemplars are sold the first year in America. But in 1976, JVC, Sony's rival, introduces its own technology: the VHS (Video Home System), and agrees to share it with other Japanese companies. These two formats are incompatibles and therefore consumers have to choose between a Betamax video recorder and a VHS video recorder. Sony’s rivals begin a price war that they win: the price gap between some video recorders reached 300 dollars. In spite of the acknowledged higher quality of the Betamax recordings, they attract less and less consumers because of one main issue: its higher quality in terms of image and sound is the cause of a limited recording capacity of one hour per tape, which means that any film or football game requires at least two, sometimes three tapes to record it from the beginning to the end. When the Betamax technology was excellent but not practical, the VHS one was acceptable and practical. In 1987 the VHS market shares reach 95%, and the following year Sony launches a VHS video recorder range.
Later came the DVD (Digital Versatile
Disc), and this time Sony worked on a common format with eight of its rivals.
Today Sony has stopped its DVD player
production. Even if it had 10 to 15% of market shares, the company had some
loss with it due to a strong rivalry and continually decreasing prices. The
main source of revenue was the Xperia mobile phones range a few years ago and
is now the PS4. On its first 2014 trimester Sony has sold 3,5 million PS3 and
PS4 when Microsoft has only sold 1,1 million Xbox 360 and Xbox One.
The moral of this story : A ragged colt may make a good horse !
The Betamax video recorder
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