Betamax to Blu-ray: Most famous format wars

True stories of tech's bloodiest format wars

It was late on a Friday afternoon in Las Vegas, the HD-DVD Promotion Group was preparing its 2008 CES press conference, confident of wowing the world with its rival to Blu-ray video format. A few hundred miles west in Hollywood, one of its key partners had other ideas.

VHS versus Betamax

Hollywood studio Warner Brothers had decided that the future was going to be Blu - exclusively Blu. It had earlier supported HD-DVD as well, but now withdrew that support. As the sun disappeared, HD-DVD bigwigs sat shell-shocked, blinded by the famous bright lights of The Strip. There’d be no champagne corks popping for Toshiba in Vegas that year. The end was nigh, and it knew it. The glitzy press conference was cancelled, and the hi-definition format war against Blu-ray was lost.

Within weeks HD-DVD would join Betamax, 8-track cartridges, the Sega Dreamcast and other technological could-have-beens in the gadget knacker’s yard.

The mid-seventies, and blockbusters such as Jaws, The Godfather and Star Wars are blowing up the box-office. The home video market is primed to explode, following a string of false starts and Sony seems to be leading the way with its Betamax format. JVC however has other ideas…

According to New Yorker journalist James Lardner in his 1987 book Fast Forward: Hollywood and the Japanese VCR Wars, back in 1974 Sony displayed all the business sense of a Northern Rock loans seller. It brazenly showed off a Betamax prototype to rivals Matsushita – now Panasonic – who owned JVC. The chaps from Matsushita simply smiled and acted impressed while failing to mention that JVC’s VHS project was well under way. Less than a year later in a Godfather-esque shakedown, Sony was told that “it wasn’t too late” for it to embrace the VHS, “for the good of the industry.”

With Betamax players months away from production, Sony stuck to its guns and then filed suit against JVC, claiming that the formats were suspiciously similar. All the time though, it must have thought it was on to a winner. Betamax cassettes were smaller and boasted superior video quality because of the higher bandwidth. What could go wrong? “Sony’s favourite saying at the time was that Betamax was technically superior, which it was,” says JVC’s UK technical manager Gary Broadbent, who joined the company as a VHS engineer in 1984, fixing “hundreds upon hundreds of the damn things.”

JVC released longer blank cassettes, but this was a minor factor according to Broadbent. He gives much of the credit to stores such as Radio Rentals. For the benefit of younger readers, this was a chain that used to rent equipment to households, back in the days when VCRs, washing machines and the like were too expensive for many people to buy outright. It shut down in 2000.

“The main reason VHS caught on is because of its presence in the rental market,” Broadbent says. “In the 1970s VCRs were £500-£600 each [about £2,500 in today’s money] so Radio Rentals and the like did a great trade churning them out for £2.50 a week. For whatever reason Sony didn’t seem to want to go down that route, but it was the making of VHS.”

One of tech’s most told tales is the old yarn about pornography deciding the video format war. This is something of an exaggeration, but the availability of adult movies was part of a wider trend that gave VHS another edge.

“It wasn’t just porn, it was films in general,” says Broadbent. “There were never many pre-recorded films available on Betamax.” With Sony seeing its device primarily as a home recording tool, VHS took off as a way to watch blockbusters at home, helped by a burgeoning black market. “In those days, buying a movie cost up to £80,” recalls Broadbent, “so naughty people would rent a film, make a copy, then make copies of that copy and sell them. That underground industry really helped to establish our format.”

Ironic, then, that the law seemed to be against Sony more than its rival. In 1976 Sony became entrenched in a legal battle with Universal Studios and Disney over whether home viewers should be allowed to record copyrighted material. It kept Betamax titles off the shelves at a crucial moment and by the time the court ruled in Sony’s favour, VHS had well and truly gained the ascendancy.

“What we learned from VHS vs Betamax was it wasn’t just the hardware that was important, but also the software,” Sony’s product specialist Eric Kingdon, who has been with Sony for 25 years, says: “That’s why we sought to acquire, firstly, an interest in the music business and then later in motion pictures, while retaining strong partnerships with the studios. As a result of that format war we became acutely aware of how all the pieces fit together in one big jigsaw.”

Those lessons were learned at a cost. The battle continued well into the 1980s with more and more studios deserting Betamax to jump into bed with VHS. With its market share down to 7.5 per cent, Sony reluctantly began producing VHS machines. Why did it take so long?

“It was the sheer bloody-mindedness of the two companies,” said JVC’s Gary Broadbent. “Akio Morita, who was in charge of Sony, felt his company must be seen to be winning so Betamax had a long, lingering death. Sales tailed off for five or six years before they eventually killed it off. They just didn’t want to lose face.

“The mood when Sony threw in the towel was one of absolute jubilance. Even after that, Sony continued to say that Betamax was the superior format and that it should have succeeded. But it was straightforward. Someone won and someone lost, it was as simple as that.”

8-Track versus cassette

While JVC and Sony were duking it out over home video, those more concerned with audio were cruising down the road listening to an 8-track tape deck. There were mutterings, however, of these things called “cassettes”…

Developed by Bill Lear of Lear Jet fame, 8-track, or Stereo 8 cartridges as they were officially known, shot to prominence in the mid-60s, nestling under the dashboard of many a pick-up or muscle car. A lot of those early decks were developed by Motorola, which has tried its hand at pretty much everything down the years. 8-tracks were ahead of their time, allowing you to select tracks without the need to switch sides and in the late 1960s they boasted higher quality audio than the cassette.

On this occasion, victory was decided not by manufacturer spats, legal rows or missed marketing steps; it was more of a gentle evolution of the previously less successful format. The smaller, more versatile cassettes already boasted the ability to rewind – 8-tracks used a continuous loop of tape so you had to spool all the way to the end of a cartridge in order to go back to the beginning. Then, in 1971 the hi-fi era began, bringing improved build mechanism and tape quality.

Sony had a hand to play too. First, in 1964, it convinced Philips to free up its invention to other manufacturers. Then, 1978’s revolutionary Sony Walkman personal cassette player really turned the tide. In 1983, cassette sales even overtook those of LPs as Walkman sales soared.

By the time Billy Joel’s 52nd street was released on Philips’ new Compact Disc format in 1982, 8-track had disappeared from stores. The cassette had won, but 8-track lives on in the memory of many a grizzled Kiss or Rush fan, and in the constant loop tech that is used in movie projectors to this very day.

Sega versus Sony versus Nintendo

In no arena have formats lived and died by the bloody sword of progress as they have in the video game industry.

In the early 1980s in the UK, eight-bit home computers such as the Commodore 64, ZX Spectrum and BBC Micro did battle in the first of many intense format wars. The battle between the latter pair was even dramatised by the BBC in its one-off drama Micro Men (2009), but in truth the Beeb’s computer literacy drive was always in the shadow of the 64 and Britain’s very own Speccy.

Both released in 1982, the C64 and Spectrum were phenomena, pure and simple. Worldwide, the C64 was the king, selling an immense 30 million units during its lifetime. Back in Blighty, though, Sir Clive Sinclair’s ZX Spectrum held the whip hand, helped by the fact that at £175 it was less than half the price of the £399 C64 at launch.

There are no reliable figures for Spectrum sales but Sinclair’s annual turnover peaked at £102 million in 1985 – you do the math. What made the Spectrum and C64 huge was the massive range of top games available for them – the BBC Micro had just a handful of old-school arcade ports and the legendary space-trading game Elite, and was saddled with the dreaded reputation of being “educational”.

But if the war between the eight-bit computers was bloody, the conflict between the gaming consoles that ran through the 80s and 90s was positively Shakespearean. By the early 90s, Sega was king of the video games realm. The eight-bit console war had seen Nintendo’s NES beat its Master System, but with the move up to 16-bit, Sega’s Mega Drive – Genesis in the US – was arguably ahead in terms of sales and certainly ahead in terms of coolness and number of games, with titles such as Sonic, Streets of Rage and Road Rash.

But just as two armies of ants may appear to be in the midst of a massive war until a kid comes along and starts stamping on both sides indiscriminately, Nintendo and particularly Sega were about to have their nest kicked over by Sony. It might all have been so different, though. Sega could still be taking on the Xbox 360 and the Wii had it not been for a cruel act of betrayal.

Sony enters the game

Back in the latter days of the SNES, Nintendo decided it wanted a powerful CD-ROM add on, a bit like the Mega-CD on Sega’s Mega Drive. Nintendo brought in Sony as a partner on the add-on, which was to be called… the PlayStation.

Sony proudly announced the next step in the company’s history at CES in 1991. Delighted to have gained a foothold in the games industry, Sony’s celebrations continued into the Vegas dawn but almost before their heads had cleared, they were out on their ear. A day after the announcement Nintendo ditched Sony for Philips following a row over profit sharing.

Sony got mad. Then it got even, with company president Noria Ohga famously telling his charges “We will never withdraw from this business. Keep going.” Nintendo had created a rival that would haunt its consoles forever but, more tellingly, was far too big for Sega to fight.

Many at Sony still play down the effects of Nintendo’s betrayal, asserting that Sony would have entered the games market with or without Judas Mario. Mike Haigh, who heads up the development team at PlayStation UK after joining in 1993, says that as soon as video games began to cross over into the mainstream, they became Sony’s turf.

“This was an area that Sony needed to be in,” said Haigh, who helped to develop some of the PlayStation’s earliest titles. “Because it felt that territory belonged to them in many ways. It had the music, it had the movies, it had the hardware and this was a natural step for a company. Yes there were a few things that happened, that have been inflated over time, but I don’t think they were that significant. I believe it was always Sony’s plan to create its own console and the decision was a good one.”

Despite this, PlayStation was still a hard sell for Sony veterans, who felt games consoles were just toys for kids. Common ground was eventually found with the integration of a CD player, “at a time,” says Haigh, “when no-one had a CD player. There was a definite and deliberate pattern. The PS2 helped DVD into the mainstream and Blu-ray has the PS3 to thank for its success.”

Sega hits the power off button

Back in 1994, the original PlayStation changed the landscape almost instantly. Sega’s 32-bit Saturn floundered and Sega dropped to third place in the market and despite being the first to offer online play, the 64-bit Dreamcast couldn’t arrest the slide. EA Sports dropped the console following its losses on the Saturn, meaning no FIFA, no Madden and no NBA. They were all on PlayStation and Sega was the proverbial one-legged man in an arse-kicking contest.

According to veteran games developer Don Daglow, Sega fell on its own sword rather than throwing in the towel. “Sega divided its creative juices at a crucial time, and it cost them,” Daglow told T3. “When the time came to think of a follow-up to the Dreamcast, they had teams working on a series of games console devices. They dissipated their energies and Sony swept the table.

“Sega knew exactly what was wrong and how to fix it. They’d learned a lot of great lessons from the Dreamcast and might have been able to counterattack, but they just didn’t have the resources to pursue their ideas. They’d spent millions on ideas, but in a business where billions are now required to make a serious run at a console war, Sega didn’t have it.”

Sega hung up its console-making boots in 2001 and, after failed merger talks with Microsoft, set upon a lonely road as a third-party software developer.

“One of the hardest things in life for those who have been on top, and are no longer on top, is to ally with other people,” says Daglow. “Sometimes in order to regroup, you have to take three steps back, and it’s not easy to do.”

Blu-ray versus HD-DVD

History gives us the benefi t of hindsight. In every war, key moments where blood could have been spared are forever mourned by the battle-scarred survivors and that’s true for Toshiba’s HD-DVD and Sony’s Blu-ray.

Blue laser-based hi-def discs had been in the pipeline since 2002 but had fallen victim to some pretty ludicrous arguments between manufacturers. Firstly, Toshiba and others split off from the original Blu-ray steering group in an argument over whether blue lasers were too expensive… and then announced it was launching its own blue-laser disc format (HD-DVD). Then, an even more tedious debate – was Java or Microsoft’s HDi better for the discs’ interactive elements? – erupted.

Sensing this was, perhaps, a little silly, Sony and Toshiba met. Prototypes for both formats were in place, but it wasn’t too late to save the industry millions and save HD-ready customers from another game of tech roulette. In March 2005, Sony’s President elect Ryoji Chubachi said that after “listening to the voice of the consumers, having two rival formats is disappointing and we haven’t totally given up on the possibility of integration or compromise.”

Talks took place in April in an attempt to unify the formats, but ended in a stalemate and studios began to pick sides. Paramount, Universal, Warner Brothers, New Line, HBO and Microsoft Xbox initially backed HD-DVD, while Disney, Lionsgate, Mitsubishi, Dell and the PlayStation 3 had Blu-ray’s back. Both companies enjoyed minor victories, but it would all come down to the grandest arena tech has to offer: the Consumer Electronics Show 2008. Both sides were primed and ready for CES to turn the tide. Then Warners defected to Blu-ray. HD-DVD’s celebration Champagne corks came out not with a victorious pop but with an embarrassed fart.

“I was with Toshiba when the HD-DVD press conference was called off,” says tech journalist Joe Minihane, who covered the event for T3. “Tosh had just taken us on a helicopter ride to the Grand Canyon when the press guy turned round and said, ‘As some of you may know, today’s HD-DVD press conference has been cancelled.’ They were very sheepish about it. It didn’t help that the event bags that were dished out to the media all had Toshiba HD-DVD logos splashed across them.”

On the day Toshiba had prepared to tell of a glowing future for HD-DVD, based on the momentum it was gaining through stronger sales, its Digital Audio and Video VP was forced to, ahem, “shift the focus of her comments”.

“As you can imagine, this is a tough day for me,” Jody Salley told the press. “I fully expected to come here this morning to share with you the successes of the last year of HD-DVD, but the events of the last few days have shifted the focus of my comments. It is diffi cult to read pundits declaring HD-DVD dead… but we’ve been declared dead before.”

HD-DVD may or may not have been declared dead before, but this time there was no doubt it had run down the curtain, joined the choir invisible and become an ex-format. The game was up. Over at Sony, talk was already turning to how to progress Blu-ray now it had the market to itself.

“It was a very well kept secret,” says Sony’s Eric Kingdon, who was at the show preparing the Blu-ray stand. “Those guys at Warner Brothers didn’t tell a lot of people. Of course top management would have known about it, but to us it was a great surprise and it left a lot of people smiling because this was going to provide a clear path to the conclusion.

“I remember the Blu-ray stand was absolutely heaving with people after that and from that point on, it was obvious this was the format that the market was going to go with. There was a palpable sense of relief among consumers. About a month later, I was at another show and people were so glad it was over, they came up to me saying, ‘Now I know what to buy’.”

HD-DVD tried to counter with almost daily price cuts, but its remaining partners deserted it. Just five weeks after CES, Toshiba shut down the HD-DVD production line and the hi-def death match was over. After a brief, face-saving assertion that DVD upscaling was now the way to go, Toshiba eventually caved in and released its first Blu-ray player last year. For Sony, 20 years after being forced to embrace the VHS format that killed Betamax, it must have been an exceedingly sweet moment.

Future format wars

Has war taught us anything? Will tech companies of the future join hands in unity and universal standards? You know what? Probably not. Even now, 3DTV comes to you in four different flavours of active-glasses tech, as well as the passive option. Early adopters will be forced to nail their colours to the mast and run the risk of backing the wrong horse again.

Blu-ray’s victory in the HD disc wars was clinical and swift, but a shoot-out dual against a direct rival is one thing. Taking on an evolved, nonphysical format is another. In truth, Blu-ray is still struggling to establish itself outside of America. European sales are pitiful, with consumers asking why discs are so expensive and just what is so wrong with DVD anyway? Now, new Sony and Samsung TVs will come loaded with Lovefi lm widgets that allow full 1080p videos to be viewed, streamed or stored over broadband. Hi-def in an instant.

The road to an MP3-like download-only utopia will be a rocky one, however. The UK’s broadband infrastructure means that the viewing experience will be choppy and slow for many. Also, acquiring the rights for digital streaming remains a legal minefield. As a further holding move, digital copies of movies are being bundled with Blu-ray discs.

Simon Morris, chief marketing officer of Lovefilm, is hedging his bets, offering everything and allowing the customer to pick a winner. He is reluctant to etch Blu-ray’s name on a gravestone just yet.

“At some point the infrastructure required to deliver digital easily to a mass market will be there and digital streaming will take over,” says Morris. “Clearly we will move to digital-only in the future, but at the moment I’m increasingly
convinced that Blu-ray discs will be around for a very long time.”

Every great format has its day then dies. The PS3 and Xbox will one day be consigned to history, but their lifespans will be boosted by this year’s Move and Kinect motion gaming add-ons. BSkyB and Japanese network NRK are already working on the Super Hi-Vision tech that has the potential to make HD look like CRT.

A few years ago it seemed certain that Apple and Microsoft would do battle until the end of time, but now Windows and Mac OS will be forced to adapt as Google’s vision of web-based cloud computing gathers traction. Sony will no doubt continue to pick fights with all comers. Maybe it’s no bad thing. Wars are terrible, but they drive innovation as the human survival instinct kicks in. Format wars are no different.

“No one likes a format war,” says Sony’s battle-hardened veteran Eric Kingdon. “But good things do come out of them. They drive us all on to produce the best tech possible. You end up with a much stronger idea than you ever imagined possible.”

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