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Lessons for Entrepreneurs from the Death of Betamax


A few weeks ago Song announced that in March 2016 they would stop making Betamax Video Tapes, some thirteen years after shipping the last Betamax VCR. If you’re of a certain age like me, I’m sure you are thinking, ”What they’re still making Beta Max Tapes?” For the younger generation whose only knowledge or association of the word ”tape” is a sticky film or fabric use to bond things. We have used audio and video types for decades to record music and video performances or events.

Betamax_Tape_v2In 1975 Sony developed a video tape format or standard called Betamax, where as JVC had developed a rival standard called VHS format. Each had their own advantages, Betamax had superior video picture quality, but a one hour recording limit. The VHS standard while offering a reduced picture quality had twice the duration.



Does Your Value Proposition meet Your Market’s Needs?

FDPN IncentivesThe Sony system offered TV viewers the ability to record TV programmes typically no longer than 1 hour and watch them when they wanted. So you could record Dallas or The A-Team and watch it when you wanted to and not be bound to the TV network’s schedule. The problem was that the culture of “time shifting” wasn’t yet established. In order to produce a better picture quality more components were required, this also increased production and other costs making the VCR units too expensive for consumers.

JVC on the other hand identified the fledgling video rental market as being an ideal customer for their two hour tapes. Since most films typically have a running time of 90-110 minutes. JVC VCR’s were also a lot cheaper and met the needs of most people, furthermore it also ate into Sony’s market since you got 2 shows on a tape instead of one!

Best Isn’t Always Better

The superior video quality of Betamax was not a sticking point or sweet spot with customers, therefore customers voted with their wallets. The also asked for practicalities offered by a 2 hour tape over a tape with just 1 hour recording time.

The point of offering a premium product only suits certain markets such as luxury goods, however it is yet to be seen whether it is concept that works with technology. This is a point that we’ll see answered as the expensive Apple watch either takes off or crashes and burns. Particularly as other luxury watch makers fight for the wrists of high consumers.


FDPN CollaborateJVC realized the opportunity to move their product by partnering with the movie rental operators. Again readers of some maturity will remember Blockbusters and others. By partnering JVC was able to secure a steady sales pipeline. Sony on the other hand did not see the value of identifying partners.




Trend Spotting – Looking for the Next Wave

Successful businesses not only provide what the market needs and provides it cost effectively, but a successful enterprise must also anticipate or create the next big thing. Just like any good goal scorer doesn’t run to where the ball or puck is, they move and create a space where the ball is going! An entrepreneur must move not to where the ball is, but move to where it’s going and be ready to execute.

These are all lessons we should learn and remember as the last Betamax tape rolls off Sony’s production line in 2016.