May 10, 2024, 8:05 am | Read time: 6 minutes
There was a war. Well, a “format war.” This term refers to the fierce competition in the 1970s and early 1980s between the three incompatible home video formats: Betamax, VCR/Video 2000, and VHS, which has gone down in the history of consumer electronics.
Those of a certain age might remember. It was the 1980s, and with anticipation for a long home theater weekend, people would head to the video rental store on Friday night. There, you could rent popular movie blockbusters, such as “Beverly Hills Cop” with Eddie Murphy or “Blade Runner” with Harrison Ford, on videocassette for your home VCR. This memory includes the fact that during this peak time for video rentals, the terms videocassette and VHS system were already synonymous. VHS had long won the war and was the undisputed ruler in the home theater sector. However, this story is not about the shining winner but about the two losers: VCR/Video 2000 and Betamax. Both systems failed, not least due to flawed corporate strategies.
Overview
A Month’s Salary for a VCR
The 1970s had just begun when the German radio and TV manufacturer Grundig and the Dutch electronics company Philips not only heralded the video age for home use but practically invented it. The VCR cassette (VCR stands for Video Cassette Recorder), which had a one-hour runtime, made it possible for the first time to record favorite TV shows via VCR. Whether it was an episode of the crime series “Der Kommissar,” the entertainment show “Am laufenden Band,” or the international matches of the German national soccer team, there was no longer any fear of missing out. Broadcast times no longer dictated leisure activities–a given in today’s on-demand streaming era, but a novelty back then.
This system or format was not without flaws. For one, the VCR cassette’s one-hour limit didn’t allow for recording an entire movie. Movies typically ran between 90 and 120 minutes, requiring a second cassette. This wasn’t just a matter of convenience; the purchase price was also an issue. Such a cassette cost around 50 Deutsche Marks at the time, and a recorder was about 3,000 DM–equivalent to an average monthly salary in West Germany.
Japan Shakes Up the Market
By the mid-decade, Japanese companies, Sony with Betamax and JVC with VHS (Video Home System), entered the European market. The biggest advantage of both systems over VCR was a runtime of over two hours. The problem: the three systems were not compatible with each other. Anyone wanting to switch needed a new recorder, which was as expensive as VCR models.
VCR manufacturer Grundig introduced a cassette system with an impressive five-hour runtime, labeled SVR–Super Video Recording. However, SVR was neither compatible with Philips devices nor could the new cassettes be played on older Grundig devices. So a new recorder was needed–initially from Grundig itself. The Franconian traditional company built a brand-new VCR factory for a staggering 50 million DM. This was certainly one reason why Grundig (founded in 1930) experienced its first sales declines in the 1980s. After a steady decline in the following years, Grundig finally filed for bankruptcy in 2003. But that’s another story.
Format Chaos Instead of Common Sense
Philips had to respond to the SVR activities of its competitor. In 1977, they introduced a three-hour tape and a corresponding recorder. While Grundig cassettes with the same runtime could be played on it, their own older tapes with shorter runtimes could not. Understandably, faced with this strategic disaster, customers turned away from Grundig and Philips in horror and toward the two Japanese alternatives, VHS and Betamax.
Once again, Philips felt compelled to react to this development. However, this reaction was not what common sense would have expected. Instead of agreeing with Grundig on a unified system, they introduced a fourth system in 1979: Video 2000.
Video 2000 was quite usable on its own, as it allowed up to eight hours of playtime–the cassette was double-sided, with each side offering four hours. But potential customers finally refused to forgive the lack of compatibility. Thus, in 1981, the VCR/SVR system gradually disappeared from the market, while Philips eventually phased out the production of Video 2000 recorders in 1986. By that time, the VHS system had long secured not only the sympathies but also the purchasing willingness of video fans. With well over 93 percent, VHS now dominated the market, while the remaining seven percent was split roughly equally between Video 2000 and Betamax.
Who is Actually Behind the JVC Brand?
Well-Known TV Manufacturer Halts Production
Neither Betamax nor Video 2000 in the “Adult Section”
The enormous strength of VHS was due in no small part to the fact that manufacturers of purchase or rental videos agreed on VHS as the gold standard. The other formats, Video 2000 and Betamax, were no longer offered. Incidentally, the porn industry is said to have played a certain role in the triumph of VHS. Betamax 2000 and Video 2000 steadfastly refused to be represented behind the heavy curtain that separated the “adult section” in video rental stores. The VHS format, on the other hand, had no such moral qualms. Economically, this flexibility paid off.
Speaking of Betamax: Sony’s version of a viable home video system was technically superior to VCR/Video 2000 and VHS, particularly in terms of picture quality. But even the Japanese companies weakened themselves. Sony required its licensees to set up their own production facilities in each distribution country. This overwhelmed some potential licensees and, above all, sabotaged a quick, profitable spread of Betamax.
Sony Shifts Gears
JVC was much smarter. The company was in financial trouble and needed money to flow as quickly as possible. So they took the opposite approach and supported potential licensees in a way that almost bordered on self-denial. Not only did they provide assistance in setting up production facilities, but JVC also produced devices for partners. Of course, these devices received the partner’s brand before delivery. Whatever the brand on the devices, whether it was Grundig, which was now selling VHS recorders itself, or Panasonic or Sharp–inside, it was mostly JVC.
Thus, the battle was fought, and the format war for VCR and Video 2000 was lost. Sony’s Betamax, on the other hand, received something of a reprieve until the early 2000s. Despite selling 18 million devices, Sony eventually ended its involvement in the home video sector in light of VHS’s overwhelming dominance. Instead, they focused on the professional sector, quickly turning Betamax into Betacam, a video format for television. However, VHS couldn’t rest on its laurels for too long. The emergence of the CD in the mid-1990s meant that the next format war was only a matter of time…