The new Betamax problem

This morning’s Observer column.

History repeats itself, said Marx, the first time as tragedy, the second time as farce.

Step forward the consumer electronics industry. In the late 1970s, two incompatible video recording systems emerged: Betamax, from Sony; and VHS, from JVC. The battle between them became one of the canonical case studies in the curriculums of business schools, illustrating the victory of marketing over technology, a moral deeply comforting to sales executives and those who teach marketing.

Although the Betamax format was technically superior, VHS won the battle for the hearts and pockets of consumers. It is thus seen as a cautionary tale for smart-ass engineers who think technical sweetness is all that matters.

As ever, reality is slightly more complicated than marketing myth….