Friday, January 26, 2007

The Lesson of Super VHS

Many people won't remember Super VHS, an improved version of VHS which enabled somewhat higher video resolution using special video tapes. During the 1980's, I had delayed buying a video recorder and hence skipped the VHS vs. Beta decision. Around 1989, I finally gave in and purchased my first video recorder. Of course it needed to be VHS compatible because Sony's Beta format had ceased to be market leader. But a new enhancement had entered in the market, "Super" VHS. Because this was my first VCR and I wanted to be "forward compatible" with the rental market and because I wanted the improved resolution that S-VHS offered, I purchased a high-end JVC model for about $700 (a bit of money for a VCR, even back then).

The purchase came with an offer for one free movie in S-VHS format and from the limited catalog, I chose "Blade Runner." Little did I realize then that the S-VHS catalog would not be growing. In fact, that was the only S-VHS pre-recorded movie that I ever owned. (I did purchase S-VHS blank tapes and made some over-the-air recordings).

So what relevence does this story have today and how as marketers of consumer electronics did we learn from it? Very little, it appears. The consumer electronics market has been littered with dead-end technologies and devices that early adopters purchased but few others did. Remember other failed technologies? DAT (Digital Audio Tape)? Sony's MiniDisc? Dolby "S"? We could go on.... The reasons for these failures are numerous and could be the subject of a PhD thesis. Incomplete complementary eco-system. Lack of content. Limitations in licensing to partners. Rival technologies. Questionable customer value proposition. Overly complex products. Failure to inter-operate with the consumer's existing devices. And more...

What is the story today? Bluray vs. HD-DVD. Sirus vs. XM. HD-Radio. Home-networking and the "Digital Home". Xbox 360 vs. Wii vs. Playstation 3. Cable vs. Satellite vs. IPTV vs. Internet download video vs. NetFlix vs. Blockbuster. I could go on...

What lessons have I learned from this?
Lesson #1. It's not the technology/features/whizzy stuff (Stupid!)
  • Don't confuse cool technology (number of polygons rendered per second, etc) with actual usefulness of the device. The two are often independent.
Lession #2. Timing is key.
  • Waiting to see if the technology sticks past the early adopter purchases will weed out marginal ideas. For technology marketers, see "Crossing the Chasm" by Geoffry Moore for an extensive discussion of technology adoption strategies.
Lession #3. Sticky technologies have a robust eco-system.
  • Be wary of technologies promoted by a single company (or a false front organization shilling for a single company). We all know the mantra against "proprietary" technologies but it's true that single company promoted technologies have much higher barriers to acceptance (how may UMD (Sony's video mini-disk format for the Playstation Portable) are avialable today which are not from Sony's Columbia label?)

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