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Strategic Maneuvering and Mass-Market Dynamics: The Triumph of VHS over Beta
Abstract
This article deals with the diffusion and standardization rivalry between two similar but incompatible formats for home videocassette recorders (VCRs): the Betamax, introduced in 1975 by the Sony Corporation, and the VHS (Video Home System), introduced in 1976 by the Victor Company of Japan (Japan Victor or JVC). Despite being first to the home market, the Beta format fell behind the VHS in market share during 1978 and declined thereafter. By the end of the 1980s, Sony and its partners had ceased producing Beta models. This study analyzes the history of this rivalry and examines its context—a mass consumer market with a dynamic standardization process subject to “bandwagon” effects that took years to unfold and that were largely shaped by the strategic maneuvering of the VHS producers.
... At their most basic, standards can be understood as the ways that things are done (see Bowker and Star 2000). A classic example is the 1980s videotape format war between Sony's Beta and JVC's Video High Density (VHS): despite being a technically inferior format, the latter won and became the unrivalled standard, at least until the introduction of DVDs (see Cusumano et al. 1992). In the data-driven economy, companies that offer key products and services can set the standard for how things work. ...
From the global geopolitical arena to the smart city, control over knowledge—particularly over data and intellectual property—has become a key battleground for the exercise of economic and political power. For companies and governments alike, control over knowledge—what scholar Susan Strange calls the knowledge structure—has become a goal unto itself.
The rising dominance of the knowledge structure is leading to a massive redistribution of power, including from individuals to companies and states. Strong intellectual property rights have concentrated economic benefits in a smaller number of hands, while the “internet of things” is reshaping basic notions of property, ownership, and control. In the scramble to create and control data and intellectual property, governments and companies alike are engaging in ever-more surveillance.
The New Knowledge is a guide to and analysis of these changes, and of the emerging phenomenon of the knowledge-driven society. It highlights how the pursuit of the control over knowledge has become its own ideology, with its own set of experts drawn from those with the ability to collect and manipulate digital data. Haggart and Tusikov propose a workable path…
... In addition, a limited number of studies on cross-platform effects, mostly theoretical or based on case studies, suggest that some of those restricted complementors may switch to a competing platform, thereby creating a substitutive spillover effect across platforms and a loss of competitive advantage for the restricted platform (Eisenmann et al. 2009, Schilling 2003, West 2003. Anecdotally, Sony failed to maintain its initially dominant position after VCR producers who were disallowed on Sony's Betamax platform joined JVC's VHS platform (Cusumano et al. 1992). Symbian, once the most prevalent smartphone platform until 2010, lost its dominance after its access restriction led major handset manufacturers to join the Android platform (West and Wood 2013). ...
Existing studies suggest that platform access restriction may cause restricted complementors to switch to competing platforms, which will increase complement quantity on competing platforms. We re-examine this prediction by accounting for the impact of economies of scope on complementor responses to platform access restriction. We argue that restricting a complementor’s access on a platform may prevent it from achieving economies of scope from multi-homing, thereby incentivizing it to abandon both the restricted and (unrestricted) competing platforms. Using rideshare data in New York City, we compare the numbers of trips made by Lyft and Uber drivers, respectively, before and after Lyft restricted drivers’ access on its platform. We find that Lyft’s access restriction reduced trip numbers not only on Lyft but also on Uber. In addition, both Lyft’s and Uber’s trip numbers decreased not only during the restricted low-demand periods (e.g., non-rush hours) but also during the unrestricted high-demand periods (e.g., rush hours). In contrast, after a substantial number of multi-homing drivers left both platforms following Lyft’s access restriction, a subsequent access restriction by Uber led to an increase in trip numbers on Lyft. These results highlight the importance of accounting for interdependencies across complementor activities when designing platform governance policies.
This paper was accepted by Alfonso Gambardella, business strategy.
Funding: H. D. Chung acknowledges support from the Strategic Research Foundation’s Dissertation Research [Grant SRF-2021-DRG-8363].
Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2023.4706 .
... The first VCR was the Sony Betamax, introduced in 1975, but it soon met competition with the JVC VHS format which was released in 1976. For various reasons (Cusumano, Mylonadis & Rosenbloom, 1992), the VHS format took hold in the consumer market. This market was a revolutionary change for the media industries, as it created a secondary market primarily for film, but also for some popular television shows. ...
The paper provides an overview of determinants for the adoption of standards; a topic on which little research has been done so far. An extensive review and systematic analysis was conducted of the papers that have published on the topic. This resulted in a framework with 18 factors for the adoption of standards divided into 5 categories. A distinction is made between factors for the adoption of compatibility standards and quality standards. Additional analysis have been performed investigating the completeness of the list of factors and the extent to which cross-fertilization occurs by authors that study the topic of standards adoption. The paper concludes with contributions, limitations and a future research agenda.
Purpose
This paper aims to develop a framework for the semantic operationalisation of the business model, which enables the automated identification of business models using content analysis.
Design/methodology/approach
The authors approached the operationalisation of the business model by conducting a review of the organisational and management literature to derive the key business model elements highlighted in the existing research, along with their associated keywords.
Findings
The study proposed a conceptual framework that specifies a granular structure of business model elements, as well as the keywords that characterise each element. By coming down to the level of distinct keywords, the authors arrived at measurable constructs to capture the magnitude of every element in a company’s business model.
Originality/value
To the best of the authors’ knowledge, this study is the first to offer a semantic operationalisation of the business model by defining the set of keywords that pertain to each element of the business model. The proposed operationalisation of the business model can aid future empirical research by serving as a tool for the automated assessment of the magnitude of every element in a company’s business model using content analysis.
This book presents a first comprehensive effort to explore the mechanics and fundamentals of global ICT standardization. It offers a comprehensive study of legal rules governing ICT standardization; systematically analyses governance and institutional features of some most prominent Standards Development Organizations; and presents qualitative empirical evidence on implementation of these rules in practice. By evaluating legal and procedural rules in light of current practices and tendencies in the industry, the book explores various options available for disciplining ICT standardization from the viewpoint of the applicable legislation, judiciary, and internal governance rules of Standards Development Organizations and offers practical solutions on how to increase the legitimacy of ICT standards. Adding to the previous theoretical approach to the field of standardization from historical, legal and political science perspective, this book applies theoretical considerations to unexplored scenarios, offering a holistic picture of ICT standardization and providing a novel contribution to the field.
This paper demonstrates that the traditional categorization of innovation as either incremental or radical is incomplete and potentially misleading and does not account for the sometimes disastrous effects on industry incumbents of seemingly minor improvements in technological products. We examine such innovations more closely and, distinguishing between the components of a product and the ways they are integrated into the system that is the product "architecture," define them as innovations that change the architecture of a product without changing its components. We show that architectural innovations destroy the usefulness of the architectural knowledge of established firms, and that since architectural knowledge tends to become embedded in the structure and information-processing procedures of established organizations, this destruction is difficult for firms to recognize and hard to correct. Architectural innovation therefore presents established organizations with subtle challenges that may have significant competitive implications. We illustrate the concept's explanatory force through an empirical study of the semiconductor photolithographic alignment equipment industry, which has experienced a number of architectural innovations.
This article examines a significant example of "technological pioneering"-the development of an emerging technology in pursuit of future comercial opportunity. In this case, the pioneer's efforts resulted in the birth of a major industry, the manufacture of vidéocassette recorders for the mass consumer market. The authors compare the actions of six firms that were pioneers in the development of this technology-two in the U.S. and four in Japan. Three firms-all Japanese-emerged in the late 1970s as the big winners in the growth of this new industry. However, this is not another case in which international differences in "competitiveness" were decisive. The real success story lies in the management practices of three pioneers, who just happened to be Japanese.
This article surveys the theoretical and empirical literature on mechanisms that confer advantages and disadvantages on first-mover firms. Major conceptual issues are addressed, and recommendations are given for future research. Managerial implications are also discussed.
This paper develops a conceptual framework for analyzing the sequence of technological changes that underlie the development of industries. The framework examines the interaction between design decisions and the coices of customers. Using examples from autos and semiconductors the paper argues that the logic of problem solving in design and the formation of concepts that underlie choice in the marketplace impose a hierarchical structure on the evolution of technology. The nature of the evolutionary process has implications for the dynamics of competition and the management of innovation.
Thesis (Ph. D.)--Ohio State University, 1985. Photocopy.
We analyze technology adoption in industries where network externalities are significant. The pattern of adoption depends on whether technologies are sponsored. A sponsor is an entity that has property rights to the technology and hence is willing to make investments to promote it. Key findings include the following: (1) compatibility tends to be undersupplied by the market, but excessive standardization can occur; (2) in the absence of sponsors, the technology superior today has a strategic advantage and is likely to dominate the market; (3) when one of two rival technologies is sponsored, that technology has a strategic advantage and may be adopted even if it is inferior; (4) when two competing technologies both are sponsored, the technology that will be superior tomorrow has a strategic advantage.