The Sony Story: Part Two

you know. We we talked in the last episode about the founding of Sony, which originally was called Totsuko, and how they had a pretty ambitious but rough start because they were trying to get established in a tumultuous time in Japan's past, just after World War Two. In this episode, we're looking at how things picked up from about nineteen forward, so let pick up from there. Ninety eight, Sony got an interesting start to the year. The company had shipped

thousands of radios to the United States. Now, at that time, Sony didn't have a presence in the US, like there was no Sony Corporation of America at that time, so they had to depend upon other companies to end up handling US sales of Sony products and distribution as well. So they were working primarily with a company called agrod A g r o d. To handle U S sales, and they were distributing through the Delmonico International Sales network,

which was primarily based on New York. The radios from Sony were in a Delmonico warehouse and on January nineteen fifty eight, a group of thieves broken too the Delmonico warehouse and stole four thousand Sony radios. And even more interesting than that, they didn't touch the other radios that were in the warehouse, only the Sony ones. Now, that turned out to be great free publicity for Sony because the thieves took Sony's radios and left all the others behind.

So something must be special about the Sony radios. They had to be better than the others because those were the ones that the thieves specifically targeted. Sony was of two minds. The executives were two minds of this. One was that, well, shucks, now we have to build replacement units for the ones that were stolen because we still want to sell things in the US. But also, yea

free advertising. Everyone is going to want a Sony radio because they're good enough to steal a weird thing to think about, but it actually did give them uh kind of a beneficial view in the marketplace. Now late in nine UH Sony would end up introducing a new smaller pocket radio. You remember in the last episode they had coined the term pocketable radio. Oh, this one was called the t R six one zero, very catchy. Almost all the models I'll be talking about have a letter and

number designation UM. Sometimes they would end up getting a different name, like a nickname or a common name that would be used. But this particular pocket radio would become very popular, selling half a million sets globally by nineteen sixty, so two years after it launched. This was the product that helped make Sony a household name in in a

lot of different areas around the world. Although the biggest successes for the company were still ahead of it, they were also making other electronics, such as the C thirty seven condenser microphone. It had been trying to break into the microphone business for a while because the broadcast company n h K. You might have remembered that I talked about them in the last episode. Well, in h K at that time would only use foreign made microphones. They

didn't make. They didn't use any Japan made microphones. Because most of the microphones coming out of Japan were pretty lousy. They were not of very high quality, and so a lot of the equipment that the NHK Broadcast Company would use came from places like Germany. Now Sony wanted to change that. They said, this is a national disgrace that our own broadcast company is using foreign technology because the stuff that's being made of Japan isn't good enough. We

are going to change that now. Their first prototype was less than a total success. Had had a cellul Lloyd diaphragm with silver plating on one side, and it would occasionally, you know, catch fire, which is exciting but not something you want when you're broadcasting. I mean, your audience might find it really invigorating, and so would you, but in a totally different way. They knew that they had to

change that design. So they ended up switching from cellul Lloyd to milar, essentially that same material you find in those silvery balloons, and they used gold particles deposited on the milar and they found that it worked much better. The company produced the first C thirty seven microphones shortly before television began to become popular in Japan. It had

a later start in Japan that did in the United States. Now, by getting these C thirty seven microphones to broadcasters just as TV was taking off, Sony also managed to get more advertising because you could see the Sony brand name on the microphones on the television screen, so Sony was able to get another leg up. It was a very savvy move for Sony to make at this time in

its history. By the way, if you're not familiar with the difference between condenser microphones and dynamic microphones, in general, a condenser mike can pick up everything in an area. Um, these are really popular because they're very simple microphones. They tend to be inexpensive if you're getting something like the blue microphones, which by the way, I love the blue microphones,

but they are I think they're all condensers. They might have a dynamic microphone as well, but the ones I'm familiar with, they're all condenser mics, and tiny little noises in your environment will get picked up by those microphones.

It's great if you're trying to record something in the round, if you've got a whole bunch of people and like maybe your musicians or you're having a conversation you just want to have one microphone, it's great for that, but if you are a single person talking into it like a podcaster and you just want to have a direct relationship with the listeners on the other side, I always

recommend dynamic mics over condensers. The downside with dynamic mic is you have to address the microphone pretty much right in front of it. You can't go too far to the left or to the right, or back off too much, or the sound drops in volume very very quickly. But on the flip side of it, it doesn't pick up all the other noises that happened to be in the area, so you get a cleaner sound as farly, or at least you hear more of what the person potentially intends

you to hear. Still getting back to Sony, at this time, very very early late fifties, they started to experiment with making video tape recorders. They had already made audio tape recorders, and then they started thinking, well, how we apply this same approach to making a video tape recorder. Now, they were not the first company to do this. Other corporations had already started to make video tape recorders. Companies like our c A and Ampex were already in the game.

These video tape recorders were meant for companies like broadcast companies or sometimes medical facilities. They weren't meant for consumers. It wasn't like they were going to make VCRs. First of all, they weren't VCRs because VCR is video cassette recorder. This is before cassettes. The tape was literally reels of tape. Ah. But Sony really wanted to get into that market, and they wanted to be the company to create the first

VTR produced in Japan. VTR stands for video tape recorder. Now, the early models that Sony developed left something to be desired and were meant purely for commercial businesses, not home use as I mentioned before, but still this became one of Sony's early products. By the end of nineteen Sony was listed in the first section of the Tokyo Stock Exchange. Now this one marked a really big leap for the company.

They had already been on the Tokyo Stock Exchange, but in a different section and the over the counter market of the stock exchange. The Tokyo Stock Exchange was divided up into different sections, and so the first section was much more prestigious and uh it also included a lot more of the larger, older Japanese companies. So now Sony's kind of like the little guy muscling in on the big guy's territory. Ah, and the folks over at Sony

were beside themselves. They're very happy about this because it showed that their hard work was paying off. Now, a Sony employee named Leo Asaki would invent a new solid state component, the tunnel diode, also known as the Asaki diode. Now, I'm not going to dive too far into the technology here because I don't want to get buried in it, but you do need to know exactly, you know, kind of what a diode does in at least in general. So basically, a diode directs electricity traffic. It's kind of

like a one way street. It allows current to flow in one direction and prevents it from flowing in the reverse direction. That's the ideal. Now, in reality, that's not exactly how it works because at least with some diodes, like if you get the voltage up high enough, you can reverse current across the diode. Uh, but it's not generally designed to do that. That's not the purpose typically um, but you know, basically that's the idea is that's a

one way street. The Asaki diode is a semiconductor that can work really well at very high frequencies. Now this is apart from other other types of solid state UH components. At the time. A lot of them worked fine, but not at high frequencies. If you're just creating a transistor radio, low frequencies might be fine. But let's say you want to get into something else, like creating transistorized television or a microwave oven, you need to have transistors that can

work at higher frequencies. So this ended up being a huge development and Sony Sony began to look into using the diode to make those more complex electronics. And abuca's goal was to build the world's first transistor based television set. By the end of the year the company had done it. They created a prototype of the TV eight DASH three oh one that was the first non projection type transistorized television,

and they launched it in May nineteen sixty. Now, the transistors took up much less space than vacuum tubes, which meant you could create a much smaller television technically, this TV was a portable TV, and it even had a handle on the top of the casing which was made out of metal. Uh so you could get this, you know, just grab it by the top and poured it around.

It's a little hefty, weighed about twelve pounds. I measured eight by seven by nine inches, and it cost about as much as conventional televisions did, and of course those were bigger and not meant to move around, and had vacuum tube technology rather than transistors. In fact, the television market in Japan was pretty small, and even globally it wasn't that big. Televisions were still considered a luxury item

in a lot of places. And on top of all of that, the TV eight three oh one wasn't terribly reliable when it first came out. They frequently broke down. They in fact, got a nickname. They started to be called Sony's frail little Baby's not terribly complimentary. In nineteen sixty, Akio Morita would make the decision to open a branch

of Sony in the United States. This would become the Sony Corporation of America, and the reason for opening up a branch in the US was that Sony was earning about half of its revenue at that time from the overseas market, so of its revenue was coming from Japan and the other was from everywhere else. If they were able to move manufacturing and marketing overseas, they could end up making even more money, They could save in costs, and they could respond faster to the market. It just

made good business sense. So Sony became the first Japanese company to enter the American market this way, conducting business like an American corporation but operated by a Japanese company. Also, at that time, Sony was growing tired of selling and distributing Sony products through other American companies. You know, I mentioned those previous slee with Agrod being the company that was handling sales and Delmonico handling distribution. Sony was getting

tired of that. They would prefer to be able to handle that themselves, especially since some of those companies were resisting Sony's push to get the products in stores across the United States. Delmonico in particular. Delmonico was saying, well, our market is in New York and it would take a lot more effort for us to get this stuff across the entire US and Sony. Sony's aspirations were to have those products really hit the US hard, but in order to do that, they needed to take over that

distribution part. So creating a base of operations within the U S would allow them to do that. Uh, after that Delmonico problem, they decided that they wanted to get out of that contract, and that was gonna be a hard sell, right, Delmonico had this exclusive contract with Sony, so how do you get out of it? Sony was actually able to get out of it because Delmonico violated the contract agreement. Delmonico had an agreement to distribute the

radios that Sony created, but not the TVs. But Delmonico said they would end up distributing the TV eight three oh one in the United States. They said it without Sony giving their approval, and that was when Akio Marita said, all right, that's enough, We're not going to deal with that. We're gonna cut ties with Delmonico and we're going to start doing this ourselves. Now. It wasn't as simple as

opening up a shop in Japan. Any company wishing to open a business in another country first had to secure the approval from the Ministry of Finance in Japan, but the company was able to obtain permission from the Japanese government and open the Sony Corporation of America on February fift nineteen sixty. Their base of operations was a warehouse on five one four Broadway. That's where they stored their

products that had formerly been in Delmonico's buildings. There's actually a store about how several Sony executives on one cold night in nineteen sixty rented eight trucks loaded up all of the electronics in Delmonico's warehouse that belonged to Sony, and then shoot them across to five fourteen Broadway to put them in the new warehouse, which tells you a lot about the dedication of the executives if they're going

to take part in that kind of activity. Later in nineteen sixties, Sony hit the one million transistors produced per month milestone, which is incredible because again, they were still considered a small company, one of those things that a

lot of companies just expected Sony would die off. They didn't think that there was going to be any staying power because they didn't have the history or the size of the larger, more established companies in Japan, but it had come a long way from being that first Japanese manufacturer of transistors. And to meet demands, Sony executives decided they needed to build a new factory. Has happened pretty frequently throughout Sony's history. Uh, they would build factories in

different parts of Japan. They realized that Tokyo wasn't really a good option because the city had so little available space, and what space there was was going for a very very high price, very high demand. So they started looking outside of Tokyo and they found a spot forty six kilometers outside the city, uh near Atsugi, Japan, and they were able to get rights to a hundred sixty five

thousand square meters of space. Now, the amount they paid for that hundred sixty five thousand square meters of space would have only got them about ten thousand square meters in Tokyo. That's how much more expensive it was inside the city versus on the country. You know, it's more than a factor of ten, which was kind of incredible. Uh. That space went not just to a factory, but also to male and female dormitory. So again you had the employees living on the campus where they are working, very

different kind of world than most of America. They also faced another challenge. At Suhi was a place still is a place that would occasionally get dust storms, particularly in the winter. So transistors and circuit boards in general, solid state electronics, they are not good friends with dust. Dust is a bad component to have mixed up with your electronics. So it became a challenge to find ways to create

a dust free environment for the production of transistors. In August nine, Sony would build a research lab called the Sony Research Center. The company put Michio Hatoyama in charge of the lab. Leo Asaki meanwhile quit Sony to go and work for IBM. Uh and and Asaki had actually gone to hata Yama and said, hey, uh, so he wants to put you in charge of the lab. They're gonna come to you and ask you to be in charge.

You should totally do it. And so Hato Yama at first thought, well, that's impossible, why would Sony want me to be in charge of the research center. But they did ask him and he said okay. And then he sees that quits Sony and goes to work for IBM, and then he jokingly Hato Yama jokingly said he had been duped by Asaki because Zasaki probably would have been the head of the lab had he stayed at Sony instead have moved to IBM. There didn't seem to be

any bad blood from what I could tell. It was just one of those things where Hatoyama said, you know, if it weren't for the fact that Asaki was leaving, I never would have gotten this job. Perhaps the biggest news around this same time was that the Japanese government gave Sony permission to issue a d R stock. Now, a d R stands for American depositary receipt and it's a type of Japanese stock that can be sold in

the American securities market typically. And I'm not gonna get into too much detail, because honestly, I don't understand it. When you get down to a certain level, finances to me are a type of dark magic that I probably should not look into, or else my eyes will burn out of my head or something. But here's how it works.

At a basic level. You have an American bank, and the American bank would issue a d R stocks against Sony stocks deposited in the American bank itself, so the American bank would be in charge of handling all the complicated issues that otherwise would cause problems for the company

back in Japan. That includes things like exchange rates, shipping actual physical stocks to stockholders, that kind of thing, stuff that is legitimately difficult to do if you're operating an overseas company, especially in the era before everything goes digital, when everything is still hard copies. Making sure you can get the physical copies of the stock to the customer and not have someone else steal it or have it

get law. It was a big deal. So this actually allowed Sony to do some business in the United States stock market, but not directly issuing stock. The Sony E d R s hit the New York Stock Exchange in June ninette. When it opened, they were valued at seventeen dollars and fifty cents per share, but it would end

up going up quite a bit throughout that day. They actually sold out of the shares in about an hour, and they had two million shares available when it went on sale, so people were really excited to get a chance to invest in Sony at that time. Here in the United States, one also saw Sony launched the first

all transistor amp tape recorder from Japan. That was the TC seven seven seven, also known as the three seven, and Sony also launched the s V two oh one, which was the world's first transistor based video tape recorder.

The VTR so it's transistor base, which meant that it was smaller like a fifth the size of your traditional VTR uh still too big for consumers, way too big for consumers um and to build the VTR, Sony actually ended up working with Ampex, which was one of the companies that was known in that space already at the time. Sony shared its expertise and transistors, and Ampex shared its

expertise in VTR technology. Now, the s V two oh one could record video and do slow motion playback, and it could also capture still shots, but it also weighed more than four hundred pounds and it only had two tape heads, which unfortunately meant that no one really had a good use for the s V two o one.

It wasn't versatile enough for broadcast companies, which often had VTRs that had multiple tape heads, and it was too big and clunky for a consumer and too expensive, so you really didn't have a market for this particular piece

of technology, but the company didn't give up. They did decide that was important to develop a strategy that would be focusing just on industrial uses and another strategy that would focus just on consumer uses rather than try and walk a middle line and down between the two, because if you walk the middle line, you get squished, just

like grape, as Mr Miyagi would say. The company also took another shot at developing an even smaller portable television, this one with a five inch screen, and in order to do that, they had to find various ways to manaturize all the different components to fit them into a small form factor that included a cathode, ray tube and the TV electron gun, as well as finding ways to fix the problems that the older television set had, primarily

those temperature tolerances I was talking about. Those old sets had synchronization issues. If you expose them to heat, then the audio and video signals wouldn't match up anymore, so everything would be it would look like a really badly dubbed movie all the time. And since the uh TV eight three oh one went on sale in May, it wasn't long before those problems began to pop up because

the again technology was developed in the colder months. It goes on sale in in late spring, and then the summer rolls around, and that's where you end up seeing all these issues. In response to this, Sony actually ended up building a test chamber in its uh Ins factory and subjected new designs to high heat and humidity. Actually, I guess technically this was in the research center. So they have this chamber and they would increase humidity by

boiling water inside the chamber. That would end up creating steam and raise the humidity. They used electric heaters to increase the temperature, and then they started to develop the components for the new TV, and the new components worked much better in high heat and humidity, but then they found out that lower temperatures caused similar problems, so they

were back to the drawing board. They also tested the television's performance when subjected to vibrations, and the way they did this was they have one of these old portable TVs. They put in a car and they turned the television on and they'd have people driving up and down the highway, sometimes quite quickly, and in fact researchers were pulled over for speeding at one point, and the cat was nearly

out of the bag. Sony had kept this tiny five inch screen television quiet, but now the police had pulled over employees with one of these televisions. But fortunately that did not end up spoiling the secret. Two people who got to see it before anyone else did outside of Sony, We're pretty important. They were the Emperor and Empress of Japan. They came to visit Sony's HQ and they were allowed to go into a uh quiet room and see this five inch screen and they were told, please don't tell

anyone about it, and they kept the trap shut. Once it was ready, the TV had the designation of the TV five Dash three oh three, but it was better known as the micro TV, and it would go on sale in nine Now over in New York, Sony opened up a showroom on October one, nineteen sixty two, and it was a real chaotic mass leading up to that opening because they discovered that construction policies in the United

States are different than they are in Japan. They did not expect to run into the problem of having to hire various contractors for all the different types of systems within a building. You know, they would usually end up hiring one construction company in Japan, and then that construction company would be responsible for getting all of the various

systems installed, even if that meant working with subcontractors. In the United States, Sony had to do all that hiring itself, so they had different people there to work on electricity, on plumbing, as well as construction, and everyone was trying to work in the same space at the same time at different rates of work, and it was chaos. There was also a language barrier that made things even more difficult, obviously, but Sony managed to hold a popular but somewhat crazy

opening on October one, nineteen sixty two. When the micro TV went on sale on October four, it sold out almost immediately. And there's actually a cute story about this portable television before it ever went on sale in the

United States. So Frank Sinatra, if you don't know who Frank Sinatra has asked your parents, was in Japan and he visited Sony's headquarters and he got a chance to see the micro TV because at that time it was already being sold in Japan, so it was no longer a secret in Japan, but it wasn't on sale in the United States yet. So he sees this little television, he asks, could I take one of those back with

me because this thing is amazing. But the Japanese engineers explained the channel settings in the United States and in Japan are different, so you wouldn't be able to tune into channels back in the US. You would be on the wrong frequency, so you wouldn't be able to get the the feed that you would want. But Akio Marita promised Frank Sinatra he would send one of these sets to Sinatra as soon as the American versions were produced.

So then October four, Sony begins to sell these micro TVs in the United States, and on October five, Marita would go to Paramount Pictures in California personally and deliver a micro TV to Sinatra as promised. I think that's pretty awesome. I've got a similar story about a computer game, but it's not quite as impressive. It wasn't delivered to me by hand. The micro TV actually really put Sony on the map. The transistor radio had done a lot, but the micro TV was the first product that everyone,

even if they didn't have plans to buy one. They wanted one because it was just such an interesting, cool product, a tiny television you could take with you. It was the first truly successful product that the Sony Corporation of America I got to handle. The tape recorder, which was also successful, was still managed by another American company that

was with Agrod. I think so while the tape recorder was a success in America, Sony Corporation of America didn't have anything to do with it because that that's still was dependent upon a prior relationship with a a an agent here in the US. The micro TV was the first successful product that the Sony Corporation of America got to handle all in its own. Also in nineteen sixty two,

Sony marketed its second transistor based VTR. You remember that first one was four hundred pounds and nobody wanted it. This second one was called the p v DASH one hundred, and it was again meant for industrial and academic use, not home use. It was considered to be portable, though it's still pretty hefty v VTR. It wasn't like easy to move around, but it was considered to be more portable than your typical VTR, and its price was two

point four eight million yen, which was pretty expensive. One of the first big customers of this particular type of video tape recorder, however, were airlines, specifically American Airlines and Pan American airlines. At the time, they wanted these VTRs to replace film systems for in flight films because films, they you know, when you're actually using film, it has a tendency to break over time and get damaged. The

film quality can degrade. Video was a little bit more robust, although the early implementations of Sony VTRs meant that uh, it wasn't like a cassette. It was still real to reel, so it's still easy to cause damage to the stuff. And often while they had projected that these reels would last for forty viewings, the reality was more like one, so a little bit short of the mark. But that was largely because of the way people were loading the

video into systems. It wasn't that the product was faulty, it was that it was hard to use without causing damage to the tape if you weren't being careful. And often if you're or flight attendant, I mean, you've got so many things you have to worry about, and most of them are way more important than the in flight entertainment system. Um So asking people to set aside extra time to very carefully manage the entertainment system was not a high priority for a lot of flight attendants and

thus it ended up having some issues. Meanwhile, back over in the Sony research department, Sony engineers were busy developing an electronic calculator. Now, like other Sony products, they were using a trial and error approach. They found that the Esaki diodes, which were so great in the transistorized television,

were not suitable for calculators. They had to develop an alternative, and in the summer of nineteen two they developed a prototype calculator and it was actually an electric typewriter connected to a calculator. You would feed your equation or whatever, your different figures into the calculator and it would actually print the results on paper. So it'd used the electronic typewriter to or electric typewriter, I should say, to print

the results. They would do some more prototypes after that, and eventually Sony executives, who at first were really reluctant to even invest the resources into making a calculator they didn't see the value in it initially. They changed their minds after they started seeing the prototypes that were coming out of this research, and the A team rededicated itself to building a working consumer model, and in Sony would show off the m D five calculator at the New

York World's Fair and it was a big hit. The calculator could handle numbers up to eight digits in length, which was a big deal at that time, and they could also do multiplication, which was something earlier calculators could not do. They could do addition and subtraction, but not multiplication. In fact, if you wanted to do a multiplication problem, you really just had to do an addition problem over

and over and over again to find the answer. O Now, the M and m D five stood for Minerva, the Goddess of wisdom, and it was followed by the m D six, which improved upon its predecessor by adding a decimal point. Following models improved the forearm factor so it got smaller over time, and they also added more functionality, and Sony managed to establish itself as a player in

the calculator and eventually computer space. Around that same time, Sony was debuting the nineteen inch chroma Tron color TV that was in September nineteen sixty four. It became the fifth Sony product n sixty four, and we're only talking about the fifth Sony product. The other four would include the tape recorder, the transistor radio, the transistor TV, and the video tape recorder. However, that chromotron wasn't perfect out of the gate, like many Sony products that had some

bugs in it. Um early Sony products, I should say sometime mine flaws made mass production impractical of the Chromotron, so the team had to go back and try and figure out how to engineer around those and uh so it while it had been unveiled, it wasn't hitting the market yet. They needed to fix these problems so that mass production would become possible, thus allowing for producing enough sets to meet demand and also not have the price

be astronomical. The actual set based on the Chromotron wouldn't go into mass production until night and by then they renamed it the Triny tron Um. Also around that time, the company announced that it was developing a videotape recorder for home use. This one was called the CV DASH two thousand. It weighed fifteen kilograms, which is about thirty three pounds, and according to Sony's history, it wasn't that much heavier than the average tape recorder, So that tells

you how heavy these electronics were at the time. Thirty three pounds is pretty hefty. Uh. This was a real to real machine, so it was not again, not a a set. It was real to real um and it would take some time before home consumers would start to adopt the CV two thousand. Usually, just like some of the other technologies, you first saw it an industrial use hospitals, factories, schools,

and then eventually making its way into consumer homes. Uh. And it was able to reproduce black and white images, not color. In Sony lands a contract with IBM to develop magnetic tape for computer data storage and use. Now this seems like it's nothing, but it was huge news.

Enormous news that IBM, which had previously been using three M as its provider for magnetic tape, would turn to Sony, a foreign company that just a few years previous had been so small that most companies didn't even consider it a competitor. IBM was a much larger company with a much longer history. This was a huge deal. In fact, Thomas Watson himself, the chairman of IBM, traveled to Japan and visited Sony's office in Tokyo to meet with executives.

This is the guy the Watson computer is named after. Now. The following year, the two companies partnered to build a production facility for magnetic tapes in the United States, which of course meant that Sony first had to get approval from Japanese government, because that was still a thing at the time. Now, at this time, both the US and Japan were in economic recessions. It was a tough time all over the place. Sony stock price had dropped, as

did a lot of other companies. It wasn't that Sony had done something wrong, It's that this economic depression was affecting lots of people, and now of desperation, Sony sent a representative to IBM to see if the company would be interested in investing in Sony by purchasing some stock, and IBM actually jumped at the chance to do it, and Sony ended up making three hundred million yen in the trans action, which alone was enough to keep the company going and to start kind of an avalanche effect

where more and more companies began to invest in the Japanese economy and it really turned things around for Japan. So Sony's move kind of was the initial event that caused a greater investment into Japanese corporations and really turned things around. It was pretty impressive. In nineteen sixty seven, Sony would launch the I C C Dash five hundred so backs S O B A X. It was an electronic desktop calculator. It's kind of a predecessor to a personal computer, and so backs, by the way stood for

solid Abicus Sexy. In nineteen sixty eight, Sony would enter a fifty fifty venture with CBS Incorporated to create CBS Slash Sony Records Incorporated. This particular entity changed names and brand branding several times. In nineteen seventy three, it became the CBS owned Sony Incorporated. In three became CBS Slash Sony Group Incorporated. And then eventually Sony would purchase the

company and make it a wholly owned subsidiary. In nineteen seven and in they renamed it Sony Music Entertainment Incorporated. And here's where history gets really super complicated. I mentioned this at the beginning of the first episode of this We're not just talking about Sony anymore. Sony had merged with this or created division, and then that division merged with an existing entity, and that existing entity actually was

older than Sony, wash the CBS Incorporated entity. And I'm specifically talking about their music, not not CBS, not the television company, but the music branch of the company. It had been around since nineteen twenty nine. Back then it was called the American Record Corporation, and then it became the Columbia Recording Corporation in nineteen thirty eight. CBS bought it in nineteen sixty six. Nineteen sixty eight, Sony creates

this division and merges it with the CBS division. And so it's funny because Sony traces history to but this particular branch that now is a wholly owned subsidiary under Sony dates back to nineteen twenty nine. And I could do a full episode just on Sony Music as well as the other big entertainment divisions in Sony, and maybe someday I will. But instead of going into the full history of Sony Music, which would extend this series out like by three episodes or something, and I don't want

to do that to you, guys. Here's some highlights instead. First, Sony Music became one of the only few major players in music publishing. If you've ever looked into the music publishing world, you realize that when it comes to big labels, there are only a few of them, and that is not always great. Right. If you've only got a few big companies, then you have the potential for shenanigans. And in fact, that did happen. In the nineties, music companies,

including Sony were accused of price fixing music CDs. I'm sure some of you remember c d s. Anyway, Eventually, these companies were fined more than sixty million dollars in a settlement, although as part of that settlement they did not admit to any wrongdoing. They also had to distribute something like seventy million dollars worth of CDs to various public and nonprofit organizations. So that was not a great

mark for any of those music companies, including Sony. And another controversy that included Sony Music happened when it back when it was Sony b MG. And that's another complicated story that I'm not going to go into here again. If I if you guys want, I will do uh episodes about Sony music to tell you more. But here's what I think is important, and it really plays into the tech stuff space. In two thousand five, people found out that the copy protects and on some Sony B

M G c d s was atrocious. Not only was it uh invasive, it actually caused real problems. Uh See, if you were to put one of these CDs into a computer, it would copy over DRM software onto your computer, which would change your computer's operating system. Now, the reason for this was to attempt to block any any way of copying the c D. They wanted to prevent piracy. But the software was not easy to uninstall. It would install itself on a computer and you couldn't easily take

it off. And it created a security vulnerability, which meant that hackers could get remote access to a person's computer through that vulnerability. So, in other words, Sony's actions punished legal customers people who actually bought the CD by making their computers vulnerable to remote hacks, which is not a good thing. This is also one of those classic arguments that people point to and say a lot of DRM digital rights management strategies end up hurting the legal customer

and ignores the actual problem of piracy. In fact, what it does is it encourages people to go through the route of getting a pirated copy because typically your priorateed copies have all of this protection stripped away from it, so it won't affect you in a negative way. Uh. This is one of those stories that people point to

and say, this is what I'm talking about. Well, by two thousand seven, Sony had changed its tune on this DRM and pade a massive amount of money in a series of legal settlements and recalled some but not all, of the CDs. Anyway, the important thing to remember is this, Uh, when Sony began to branch out beyond developing electronics and got into the publication business, that was a big deal.

Like they were no longer just an electronics company. This goes back to that strategy they had when they first named the company Sony. They decided to call it Sony Corporation and not Sony elect Toronic Industries or something like that, specifically because they knew this would be a possibility that they would branch out into other markets besides electronics. Now let's get back to the technology and to nine. So that same year Sony opened up Sony United Kingdom in

the UK, where you'd expect it to be. And since the development of the CV two thousand reel to reel video tape recorder, Sony had begun to work on creating a video cassette recorder, which was a pretty tough challenge, but they identified the potential of a huge market for it. Because see, real to real tape is tricky, and you have to take the film from one reel it's wound

up on the reel. You have to take the end of that film feed through the head of the video tape recorder out the other side, and then you have to thread it onto the the second reel. And then when you operate the device, it means that the reels turn in such a way so that, uh, the tape is pulled by the an initially empty reel and it unwinds on the other one while it winds on what used to be the empty one. Right, So you've got this whole thing and you just connect the two onto

the device. But it means that you know, handling that film, you decrease the lifetime of it. You you increase the chance that you're going to damage the film. H cassette's had a real big advantage. All of that stuff would be contained within a cassette, and then that means it would be protected from your grubby hands or from dust. Um, it would remain viable longer. But on the other hand, you would have to figure out, well, how do you make it work. What's the mechanism that gets the tape

to feed through the head of the VCR. How do you get this thing that's contained within a plastic cassette so that it goes through the part of your player that can actually read the material that's been magnetically stored on the tape. And it took several years of work to get a working product type. When they did get a working prototype, they called it the you Matic VTR. That was purely an in house prototype, just a proof of concept. Uh and Abuka when he saw it, said,

this is great. Just think how fantastic the next one is gonna be. And he wanted the video cassettes to get down to the size of about a paperback book, which was much smaller than the version that they had for the prototype. By nineteen seventy three, the group was working that was working on the VCR spun off from the development division it had been part of, and it officially became known as the Beta Max, R and D Group. Sony's first Beta Max VCR with debut on May tenth,

nineteen seventy, and the company offered two models. There was one that was a standalone VCR. That one was called the s L six hundred, and there was also a TV VCR combo. It was called the LV eighten No. One. So if you think those television player combos are a relatively new thing, no, they date all the way back to the seventies. In nine teen seventy six, Sony would turn thirty years old, and that was also the year that Massa ru Ibuka would step down as the chairman

of Sony. He stayed on as an advisor for the rest of his life, but he was no longer in a leadership position. But that's also the year that JVC announced that the VHS format for the VCR was going to come out and the VCR wars began. Now. To learn more about Beta Max, VHS and VCRs, you can check out the classic tech Stuff episode tech Stuff Sets Its VCR, which published way back on March twelve, two thousand twelve. Basically, Beta Max and VHS entered into a

massive format war, and you had two sides. It's kind of like Braveheart with the Scots and the English. So you had Sony and Tashiba and Sanio Electric and any NYC, Iowa and Pioneer on one side, and then on the VHS side you had j vc U, Matt, Sushita, Hatachi, Mitsubishi Electric, Sharp and a Ki Electric were all on

that side. And then they went to fight, and Beta Max had certain advantages over the VHS format, but in the end, VHS one out for one thing, VHS VHS sets initially needed fewer components to build, which meant it was more attractive for the manufacturing process, so VHS would eventually become the standard, and Beta max essentially faded into history. I mean that was still being used in the production side of things, but not on the consumer electronics side.

Now that's not to say that Beta max was a dud. It actually did pretty well. Sony did some pretty good business leading up to its eventual decline, but by the early nineteen eighties the writing was kind of on the wall, and by Sony began to make VHS sets, which was kind of the the admission that Beta max was no longer going to be a powerhouse. The fact that they were going to start making the peating technology was a

pretty tough pill to swallow. You know. You had these people at Sony who took great pride in the fact that they developed the Beta max format, but eventually they had to admit that it wasn't going to win out over VHS v H. Beta Max would stick around a little bit longer, but really it was. It was almost unheard of by anyway. Well, that concludes this episode of the Sony story. There's still a ton to talk about.

There's some stuff that happened during the VCR wars that I want to cover in our next episode, plus obviously continue the story and try and get as close to modern day as I possibly can. Uh, there are a lot of things that are complicated that I need to talk about, including Sony Pictures. That is another company that predates the Sony Corporation itself if you look at the core of that company. Um, so we have some more

to talk about. Uh. If you guys have suggestions for future topics, maybe you want me to talk about Sony Music maybe you want me to do a full episode about Sony Pictures. I'll go into a little bit to tail next episode, but again I won't go into a full episode on it. But if you want to hear more about that kind of stuff or any other topic, let me know. Send me a message. The email is tech Stuff at how stuff works dot com, or drop

me a line on Facebook or Twitter. The handle at both of those is tech Stuff hs W. And if you haven't friended me yet or followed me, what more do I gotta do? Man, I'm working my butt off here. Come on, it's just me so lonely, so very lonely. Anyway, I'll talk to you guys next week, and I hope you have a great one. Um let's talk again really soon for more on this and thousands of other topics. Is it how stuff works dot com? Eight