Sony makes its smartest move in 35 years…

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Sony seems determined not to re-live the crushing defeat of Betamax v. VHS circa 1970-something.

In its latest bid to outmaneuver HD-DVD, Sony is reportedly cutting the price of its new model Blu-ray players by $100, a little less than 20% off the old $600 sticker price.

I think its a brilliant move. If nothing else, it demonstrates that Sony learned a valuable lesson from its first go around in the format wars: namely, price is king.

Betamax died largely on the fact that its recordable tapes were both shorter in length and considerably more expensive than those for VHS, making it pricier for consumers to record shows.

That coupled with a higher-priced player sealed the deal in the marketplace, even though Beta was obviously the superior technology. The battle was over before Sony could get its act together and make significant price cuts, thus killing Beta before it really had a chance to live.

Fast forward to present day and a Sony board room conversation that probably went something like this:

Sony Executive 1: “Instead of waiting for HD to eat our lunch, let’s cut Blu-ray’s price tag by 100 bucks and make Sony the affordable standard.”

Sony Executive 2: “But we’ll lose money on every unit!!”

Sony Executive 1: “Betamax.”

Sony Executive 2: “…$100 off, eh?”

Unless Sony was building in a monster margin, it seems fair to say they’ll be losing considerably on every new Blu-ray player sold. But you absolutely have to admire their tactics in historical context: it’s quite often that corporations pay lip service to the concept of learning from mistakes. Its exceptionally rare, however, that they actually do.

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4 Responses to “Sony makes its smartest move in 35 years…”

  1. Sony makes its smartest move in 35 years?  »Technology News | Venture Capital, Startups, Silicon Valley, Web 2.0 Tech Says:

    […] Source:The 2 Minute Drill Sony seems determined not to re-live the crushing defeat of Betamax v. VHS circa 1970-something. In its latest bid to outmaneuver HD-DVD, Sony is reportedly cutting the price of its new model Blu-ray players by $100, a little less than 20% off the old $600 sticker price. I think its a brilliant move. If nothing else, it […] Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages. […]

  2. Digital TV Blog - Rants and Raves about UK TV Says:

    Blu-ray price cut signals the format war’s getting hotter!

    Sony have cut the price of their BDP-S300 Blu-ray player by $100 (50) to make it $499, half the price of the first player they launched 6 months ago. I do not know how this will affect the price of Blu-ray players in the UK, but its a significant step…

  3. Sony Review Says:

    Sony Review

    Interesting article, Thanks for sharing.

  4. Digital Sony Says:

    Digital Sony

    Thanks, Interesting read.

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