April 2, 2020
Sony: A Tale of Innovation, from the Walkman to the PlayStation 4

Sony: A Tale of Innovation, from the Walkman to the PlayStation 4

This week on Behind the Business, we’ll
be taking a look at one of the most innovative companies to ever emerge from Japan. The inventor of such brilliant technologies
as the transistor radio, the Walkman, the CD player and the PS Vita, Sony. Our story begins in March 1945. World War 2 was still in full swing, but by
that point the Axis powers were crumbling. Russians were swimming in the Oder, Hitler
was on suicide watch, and a fleet of Boeing B-29s was firebombing Japan into oblivion. The bombing of Tokyo on March 9 was the deadliest
air raid in history, and it threw the Japanese military into panic mode. Numerous emergency meetings were held that
week, and one such meeting brought together two men that would eventually change the course
of history: Masaru Ibuka, a Navy lieutenant, and Akio
Morita, a weapons researcher. Their brief military careers ended just a
few months later when the Japanese Empire surrendered, and faced with unemployment,
the two men found work wherever they could. Masaru got a job repairing radios for a department
store, but in 1946 he convinced Akio and several of his friends to start a business together. They borrowed $530 as initial capital and
founded the Tokyo Telecommunications Engineering Corporation, or Totsuko for short. Despite the name, they didn’t have the R&D
budget to develop telecommunications and so their first product was actually a rice cooker. It didn’t really sell, though, and pretty
soon Masaru gave up on the home-appliance market. His first success came in 1949, when he got
to try a tape recorder imported from the US by the Japan Broadcasting Corporation. Back then tape recording was a very new technology,
and Totsuko became the first to market it in Japan. They released their G-type tape recorder in
1950, and although sales were slow initially, as the Japanese economy started to recover,
so did Totsuko’s fortune. Then, in 1952, Masaru got wind of a world-changing
invention: the transistor. It had been invented more than five years
earlier by Bell Laboratories, but it was used almost exclusively by the military. Back then consumer electronics were based
on the vacuum tube, which was much bigger and used many times more electricity. Masaru immediately saw the transistor’s
potential and so he did whatever it took to get his hands on it. He managed to license the technology from
Western Electric for $25,000, a price tag so expensive it nearly bankrupted Totsuko. Masaru put everything on the line, and by
1955 Totsuko had successfully created Japan’s first transistor radio, the TR-55. It was a monumental achievement. They didn’t just create a radio that was
small and portable; they also managed to improve  the transistor technology itself. You see, under normal conditions, the germanium
used as the base for Bell Labs’ transistor isn’t conductive at all. Only when you add impurities to the germanium
does it actually function as a conductor, and this is where Akio’s knowledge in physics
came in handy. By adding trace amounts of phosphorus, he
greatly amplified the transistor’s capabilities. This improvement proved vital because Totsuko
wasn’t the first company to produce transistor radios. A small American company called Regency Electronics
beat them to it by a few months. The transistors they used, however, were built
by Texas Instruments, and they were vastly inferior to those developed by Akio. This gave Totsuko an edge. They saw huge potential in selling their radio
not only in Japan, but even in the US, where the market was much larger and equally untapped. To appeal to Americans, however, Totsuko needed
to build a distinctive brand. Fittingly, they derived their name from the
Latin word for sound, ‘sonus’. Thus, in 1955 the Sony brand was born. The success of the Sony TR-55 caused a paradigm
shift in the West. You see, back then ‘made in Japan’ carried
the same connotation that we associate with ‘made in China’ today. Sony’s radio, however, was objectively better
than anything on the market, and it kickstarted the company’s reputation. Sony put their transistor technology to further
use in 1960 by creating the world’s first transistor television. They then made an even bigger leap by developing
innovative color TV technology. Akio’s team managed to improve the electron
guns behind color television, and they created a vastly superior version. Unveiled in April 1968, the Sony Trinitron
received universal acclaim and became one of the most popular TVs of its time. Sony made another great move that year by
partnering up with CBS to make vinyl records. The early 1970s showed even greater promise,
as they saw the rise of the videocassette recorder, or VCR. In its earliest days, there were many competing
videocassette formats and Sony were eager to get in on the action. They had developed a prototype format in 1969
with Matsushita Electric, the company you now know as Panasonic. The format was prohibitively expensive, however,
and it’s lack of mass market adoption eventually led to Sony and Matsushita parting ways. Each started developing their own videocassette
format, and the end result was one of the fiercest format wars in history. Sony created their format in 1975 and called
it Betamax. It could only record a maximum of one hour,
but it’s quality was by far the best in the market. Matsushita released their format, called VHS,
a whole year later. Although Betamax was considered superior,
Matsushita were the biggest electronics manufacturer at the time and their power was considerable. They owned JVC, and also managed to convince
Hitachi and Mitsubishi to adopt their format. Even though Sony had a whole year head start,
they couldn’t get enough manufacturers to use their format and so eventually they had
to start making VHS machines. Despite their defeat though, Sony were eager
to make a rebound. Their strategy was to improve consumer electronics
and to make them portable, and there is no better example of this than the Sony Walkman. Released in 1979, the Walkman completely revolutionized
the way people listened to music. A cheap portable stereo was completely unheard
of at the time, and yet Sony managed to sell their Walkman at a comfortable $150. Since then it has sold over 385 million units,
and it’s become one of their most iconic products. That same year Sony teamed up with the Dutch
electronics firm Phillips, who had pioneered the optical disc medium through their LaserDisc
technology. Together the two companies developed the Compact
Disc, and in 1982 Sony began selling the first commercial CD player, ushering in the era
of digital music. Sony also kickstarted the popularity of camcorders
by developing one of the earliest lightweight video cameras in 1985. They further cemented their hold on the music
industry by buying CBS Records for $2 billion in 1987, which gave them access to the world’s
largest music library. Two years later, Sony broke into the film
industry by buying Columbia Pictures from Coca Cola for $3.4 billion. As the world entered recession in the early
1990s, Sony were getting ready to conquer their next market: console gaming. They had tried to partner up with Nintendo
in the late 1980s, but when deal fell through in 1992, Sony had to finish the project on
their own. Then, in December of 1994, Sony unveiled their
masterpiece, the PlayStation. It was an immediate success, bringing in a
swarm of developers that made iconic games like Metal Gear Solid and Resident Evil. The PlayStation was so technically innovative
that it remained in production for 11 years, selling over 100 million units. Sonny continued to innovate throughout the
1990s. They introduced their first flat screen TVs,
their VAIO computer brand and even a robotic dog. Sony kicked off the new millennium with the
PlayStation 2, which to this day is the best selling video game console of all time. In 2001 they bought Ericsson’s mobile division,
thus giving birth to Sony Ericsson. They then topped off their content library
by acquiring Bertelsmann in 2003 and Metro-Goldwyn-Mayer in 2004. Sony released the PS3 in 2006, and although
it didn’t hit PlayStation 2 levels of popularity it still did pretty well. Now, over the past decade it’s pretty clear
that Sony has started to lose some of its steam. It’s not that they’ve become bad, but
rather that everyone else has become better. Whereas before Sony were famous for leading
dozens of markets at once, now they’re struggling to innovate at all. Their competition has blown past them in almost
every department. Their mobile division has less than a 1% market
share, Warner Brothers and Universal have dominated the film and music industries, their
smart TVs are just downright stupid, and … PS Vita. That said, the situation isn’t all doom-and-gloom. The PlayStation 4 has had a phenomenal run,
selling almost 60 million units in its first three years. Interestingly enough, one of their most profitable
segments over the past ten years was their financial division, which was established
all the way back in 1979. Of course, although the PS4 is carrying them
right now, Sony have a lot of catching up to do. Luckily, they’ve got a great opportunity
to shine in the latest up-and-coming tech industry, virtual reality. They’ve already made their first steps,
but the industry is still very young and right now it’s anyone’s game. Sony are really gonna have to make VR count,
however, since in the tech business you rarely get second chances. Thanks for watching and thank you to everyone
who’s supporting us on Patreon. If you liked the video head on over to our
subreddit and tell us why. Or, if you’re more into social media, you
can talk to us on Facebook or Twitter. In case you missed it, do check out our previous
video on the history of AOL, from the earliest days of the internet to their fall as America’s
dial up overlord. You should also check out the full Behind
the Business playlist, where you’ll find the interesting stories of other big companies. Once again, thanks a lot for watching, and
as always: stay smart.

100 thoughts on “Sony: A Tale of Innovation, from the Walkman to the PlayStation 4

  1. On October 1, 2001, SONY & ERICSSON entered into a 50/50 joint venture called Sony Ericsson. SONY never bought ERICSSON's mobile division! Stop assuming more than you actually know & research subjects thoroughly, so you can tell the truth, instead of misleading people.

  2. 6:08. Wrong. VHS was not released by Matsushita, it was by JVC.

    6:16 Also wrong. VHS didn't win because it had "more movies". In 1976, VHS and Betamax were for recording TV and other things. There were no prerecorded movies. If you bought a VCR between 1975 and 1979, you bought it for TV. VHS won because more companies made and produced VHS VCRs. Only Sony, Sanyo, and Toshiba produced Betamax machines, but JVC, Matsushita/Panasonic, RCA, Hitachi, Sharp, Philips/Mangavox, Funai, Qasuar, and even Sony past 1988-ish all made VHS VCRs. Sony couldn't get all manufactures to use Betamax, they didn't allow it. JVC was totally cool with allowing anyone to use the VHS standard, so VHS VCRs were cheaper than Beta. VHS also had more recording time because of it's slower tape speed.

    Also, you should have gave Sony's 1983 Betamovie a quick mention, and it was the first video camera + video cassette recorder in one, or the camcorder. Even though the beginning of Video8 camcorders in 1985 were much, much, much successful than Betamovie, Video8 camcorders weren't the first. Should have also mentioned how Video8 was also meant to be a home format like VHS, but it failed outside the camcorder market. Still a good video.

  3. It was my fav company but nowadays they think about money rather than innovation
    The could have done better in smartphone than Samsung and other phones but the released the same phone every year.

  4. you forget to mention mirrorless camera where sony is unbeatable right now, camera sensor which used by every other companies be it smartphone or cameras, and "tv is stupid you say"…well sony's motion and 4k 8k upscalling is the best in the market right now thanks to the innovations like X1 extreme and X1 ultimate picture processor

  5. Now make a twin video, but in the opposite side: Sony, a tale of failures, from Beta Max to BluRay Ultra HD, passing through Minidisc, Video Cartridge in Ruvi, Memory Stick and UMD.

  6. In the 70s in Australia if it wasnt a Sony it was inferior. Sony TVs were the Pinnacle of its time. Even tv studios had large Sony Cameras. The problem of Quality degradation was like all Japenese Quality Companys, getting China to make it cheaper. Pioneer like Sony took a tumble in Quality.

  7. Sony is putting out stupidly expensive stuff lately(TVs cameras, phones etc.), l mean l had an Xperia – an overpriced junk with half the specs of any cheap chinese or korean phone and low battery life. The only thing Sony is still really good at – besides the Playstation brand – is the absurdly superior audio quality. Even my crappy Xperia, which died on me last year had superb audio quality. Sony's audio chips are insane.

  8. They did not invent a CD player they were in a partnership with Phillips Phillips had all the material the actual stampings of the CDs and everything but they were in a partnership since the 60s so they work together but again it was not Sony who invented the compact disc

  9. Sony should have known they would loose the format war when Betamax would only hold one hour of recordings.

  10. sony will succeed with16k + purchase of oculus and all vr platforms. if they fail to take over VR .. SONY will be a Hit on EBAY… just like Gillette adjustable Razors..

  11. "In the tech industry you rarely get second chances"

    …and then came the mirrorless camera. Sony A7iii probably the most important camera of this decade.

  12. Back when I was a kid. My mom, aunt and my grandparents almost owned alot of gadgets that were made by SONY. Heck even got a tournament held for a Naruto game back in 2006 or 07. That was a childhood. Then my mom bought me a PSP. And you know what happends toa a kid who owned a PSP. That was a childhood dream

  13. Hologram technology is next. We wil be watching a 40-60in display from a remote control sized hologram projector. By then we can simply misplace our TV somewhere in the house! Lol!

  14. Sony's best selling product right now besides Play Station console isn't a consumer product at all.
    But a component used in smartphones which is camera module, in this field Sony is ahead of anybody else. Many major smartphone brands that are far ahead of Sony Xperia is using Sony camera module, which is ironic.
    While in tv industry Sony is pretty much a shit.
    They did make a comeback and make some descent money in tv, like in premium tv with their OLED lines in a market where Samsung and LG reign supreme. But premium tv for Sony bring in descent revenue due to small output. While in mid and low mass tv market it is pretty much conquered by Samsung, LG, and several Chinese brands who able to make great products at an affordable price like Hisense, Chang Hong, and Xiaomi. While Sony…?

  15. Sony is trying to make a comeback in many things, one's that are more noticeable so often is the portable audio and film industry. they still have a long way to make some huge comeback in innovation and all but looking at things right now, they'll be fine. like they always said しょうがない

  16. you have very small knowledge about sony . get all the information then you should make any video .

  17. And from ALL the innovation… NOTHING has remained at SONY anymore. This company basically stagnated and lost the plot. The once great Sony has become yet another faceless tech-company with too many bad decisions and mediocre & disappointing product-lines. Blu-ray and UHD was their last big innovations but this is pretty much where it ends. At least in the consumer field. Sony's professional business is still pretty good. But the consumer electronics is where the REAL money is made.

  18. Funny that you mention the PS Vita at the introduction. Because compared to the Transistor radio, the Walkman® and the CD Player, the PS Vita was actually an epic FLOP. Sony had absolutely no clue what they had, how to market it and how to make it a success. And so the PS Vita died very shortly after and i only saw very few games for it in the stores. And the thing was actually pretty good.

  19. Sony focus too much on the Playstation, which means they can't expand too much. Their VR failed because it was limited by the hardware.

  20. So many racists things on this video. I’m not Japanese but I’d be pretty pissed off about your video. I’m not even gonna mention your “Sony TV’s are stupid” comment 🤦🏽‍♂️ you sir are an idiot 🤷🏽‍♂️


  22. Sony TVs are still great and so are their cameras. And their top of the line projector lineup is something to be seen in wonder.

  23. As said below their mirror-less cameras are top notch, their electronics have always had very high quality, I still use an old 1969 portable weather radio of theirs that works extremely well and clear. I have to completely disagree with your views of their TVs, I purposefully spent the extra money to purchase a Sony Bravia TV and couldn't be happier with my decision. It's just fantastic, The software is miles ahead of the Korean or Chinese offerings. It doesn't shove pointless ads I can't get rid of on the TV, rather it's bone stock android TV, love it; by contrast I heavily regret purchasing a Samsung blu-ray player, the software stopped working well after about a year and recently the player itself has stopped working consistently, it's only been 3 years… ya. Sony has always meant reliability to me, so far they haven't let me down. It's sort of like the Toyota of the electronics world, with some more premium cost and looks.

  24. Sony invented/perfected so many technologies and products you would need a 10 hour documentary to go though some of them. My favorites? Minidisc, sony rolly, rx100 camera, bravia, etc etc.

  25. Sony is both brilliant and insane. Look at the hardware design of the PlayStation 2 and 3. The "Emotion Engine" CPU in the PS2 is particularly weird.

    Minidisc was pretty cool for it's time, but I'm glad that huge flash storage has conquered all else.

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