In 1964, Koichi Tsunoda working for Sony received a memo asking whether the cassette format could be applied to video. Interested in the idea, Tsunoda relied this concept to Ibuka who put Nabutoshi Kihara on the project. By the fall of 1969, Kihara designed a cartridge format that used 3/4-inch tape that was booksized. In order to load this tape into the machine a series of pins mounted on a ring pulled the tape and wrapped it in the shape of a sideways U around the drum. (Lardner p.71) This system would become the U-Matic machine that Sony released to the consumers in 1971. The U-Matic machine was bulky and expensive ($1,000 for the VCR and $30 per tape), so they never really penetrated the home market. Instead the U-Matics were mostly sold to educational facilities and industries using them to create instructional videos.

Matsushita, JVC, Toshiba, and Hitachi all were designing VCRs by the early 1970s, but only one American company was still in the market. The Cartridge Television Inc. was a small group of New Yorkers whose only triumph in the business world was bringi ng the Volkswagen Beetle to the United States. (Lardner p.81) However, in June 1972 the Cartrivision was released through Sears' stores. The Cartrivision used a 1/4-inch tape and was cheaper than the U-Matic, but it lacked one major function that being a rewind button. In order to rewind movies, the consumer had to go to their local Sear store and this caused many aggravations, as one would expect. Two years after its initial release the Cartrivision was pulled off the market and thereby letting the J apanese dominate the market.

The Japanese had one major advantage in video technology development, that being their commerce laws. Unlike American companies who are usually forced to be separate entities through anti-trust laws, the Japanese had no such laws. Sony, Matsushita, a nd JVC therefore joined forces in order to create the best product possible. (Dobrow p.13) With funding from the other two companies Sony was able to develop the U-Matic while soon afterwards both Matsushita and JVC had their own comparable U-Matic machi nes. This collaboration, however, did not last as Sony began development on the Betamax VCR.

In their agreement all three companies were able to develop new technologies and Sony decided to do this seeing that the U-Matic format was not selling because of it’s hefty price tag and large bulk. Nobutoshi Kihara began to work on reducing the size of the VCR by reducing the cassette. In order to do this Kihara created an azimuth tape that was 25% less thick than the U-Matic’s while at the same time increasing the amount of recorded in formation on the tape. (Lardner p.93) This allowed for 75% less tape consumption that reduced the tape size from 3/4 inch to a 1/2-inch format. Sony then designed a less expensive tape recorder and the Betamax was born.

As according to the agreement Sony brought the new design to Matsushita and JVC, but neither group was particularly interested. The Betamax only allowed for one hour of recording time and the ot her companies felt that this should be increased before a new product could be released. The major concern was that people would have to use two tapes in order to record a movie and to Matsushita and JVC this was unacceptable. Sony on the other hand fel t that the Betamax was ready to go so on April 16, 1975 the Betamax was released. In the United States the Betamax SL-6300 was sold along with a 19 inch Trinitron TV for $2,295 and by February the next year a separate VCR could be purchased for $1,295. ( Lardner p.95-6) Matsushita and JVC, however, were not pleased with Sony’s move, so they began work on their own version of the VCR and the VCR wars began.

By 1977 when VHS entered the market, the prices between the two competing models was roughly equivalent, Betamax for $1,300 and VHS for around $1,000. (Levy p.23) The crucial difference came not from the VCR itself, but from the tape it played. 1977 not only marked the introduction of the VHS system, but that year Andre Blay created the Video Club of America. Blay sold videotapes of Hollywood films, all of which were longer than one hour in length. This meant that a Betamax system needed two tapes, while the VHS system needed only one. Also, in 1977 the normal TV household watched the TV for 6 hours and 18 minutes a day, (Gertner p.10A) and this was far more time than either VHS or Betamax’s tapes could hold. Seeing potential danger i n this, Sony developed a two-hour tape, but at the same time JVC released a four-hour tape in late 1977. Two years later, VHS had tapes that could record up to six hours while Betamax only had a four-hour tape. According to Robert Brown, the VP of mark eting for Zenith (who sold Betamaxes) stated that "The longer playing time turned out to be very important." (Lardner p.165) in 1977 the market was split between Betamax and VHS, but by 1979 VHS were leading the market in a three to one ratio. To make matters worse, Sony was being sued by MCA/Universal and Disney for copyright violation laws concerning the Betamax player in what is now called the Betamax case. In 1988, Sony decided to stop making Betamax VCRs, but the contest had ended years before. VHS became the standard format VCR in the entertainment industry and still is today.