Goodbye Beta

By Janice Castro

Sony has not made many major blunders, but the way it marketed Betamax was a beaut. The famed Japanese electronics firm started a home-entertainment revolution when it introduced Betamax, the original home-videocassette recorder, in 1975. Before long, however, competitors arrived in force with another type of VCR, dubbed VHS, which offered buyers more recording capacity. Sony gradually lost all but a tiny fraction of one of the richest markets in the consumer electronics business. Last week Sony said it will begin selling VHS players, in addition to Beta models, later this year. Inevitable as the move may have been, it was tantamount to Denver Broncos Quarterback John Elway walking onto the field wearing a Cleveland Browns jersey.

Sony officials probably knew they were in trouble years ago, when consumers began to use the terms VHS and VCR interchangeably. The company had made a crucial mistake. While at first Sony kept its Beta technology mostly to itself, JVC, the Japanese inventor of VHS, shared its secret with a raft of other firms. As a result, the market was overwhelmed by the sheer volume of the VHS machines being produced. In just the first year of VHS, Sony lost 40% of the VCR business to the upstart competition. By 1987 VHS accounted for more than 90% of the $5.25 billion worth of VCRs sold in the U.S.

While both types of recorder are fairly simple to use, there are differences in the technology. Most important, tapes for one machine cannot be played on the other kind; the VHS cassettes are larger. Proponents of the Betamax format insisted all along that its picture quality was superior to what VHS offered, but most consumers either did not know that or did not care. Says Leonard White, president of Orion Home Video: "Beta is the perfect example of a better technology being outgunned by consumer preference."

One popular VHS feature was that its tapes could record more material. VHS had two-hour tapes -- about the length of the average movie -- when Beta was still limited to one hour. Now that Beta tapes hold up to five hours of programming, VHS tapes can record for eight.

Where does the Sony decision leave the 20 million U.S. owners of Betamax machines? Most likely on the road to that vast consumer-electronics graveyard where orphaned home computers and other gadgets go. Though Sony says it will not stop producing Beta machines or tapes, industry experts are skeptical about the format's prospects. Says Makoto Tamaki, an electronics analyst at the Industrial Bank of Japan: "Someone who is going to buy a new recorder is likely to choose a VHS. There is the anxiety that Sony might stop making Beta."

If it does, few Beta owners will be surprised. Anyone who has tried to rent Beta movies has had difficulty finding recent film releases. Even though most major Hollywood studios still produce Beta versions of their movies, retail stores and rental shops devote most of their shelf space these days to the more popular (and more profitable) newly released VHS versions of such films as Roxanne and Tin Men. But as the ranks of Beta devotees thin out, they have one small consolation. They will face less competition in renting the Beta ) tapes still available. When they want to check out that well-worn Beta copy of Annie Hall, Star Wars or the very first Rocky movie, it is almost always on the shelf.

With reporting by Kumiko Makihara/Tokyo and Thomas McCarroll/New York