Once technological and design hurdles had been overcome, the next step was to identify a novel sales and marketing concept for the new 8mm camcorder. A survey was conducted to discover the main reason people liked owning a video camera. The overwhelming response was to take videos of vacations. At the time, an increasing number of Japanese were traveling overseas, and Sony decided that its marketing campaigns should target young, single travelers.
On May 31, 1989, Sony unveiled the CCD-TR55 with a flat design. The microphone and lens were housed inside the body, and it was the world's smallest and lightest video recording and playback unit. Weighing only 790 grams and priced at 160,000 yen, the sales launch of the CCD-TR55 was June 21, just prior to the commencement of summer campaign sales.
Sony touted the innovation of its new 8mm camcorder through unique television commercials. For the first time Sony promoted a product prior to its release using "advance notice" commercials. In the commercials, a popular young Japanese actress, Atsuko Asano, held up passports concealing the CCD-TR55, saying, "Look out for Sony's latest video camera." The commercials proved to be a smash hit, prompting a flood of orders, and the CCD-TR55 enjoyed sales far exceeding Sony's expectations. The initial stock of 50,000 units--ten times the usual number prepared for a new product--sold out in two days. Production failed to meet demand for the first three months.
Advertisements in newspapers and magazines issued in June emphasized the compact size of the CCD-TR55, proclaiming it to be of "international size" and "made for travel." However, people kept asking for Sony's "passport-sized video camera" when ordering it at stores. Sony borrowed this terminology and began using the term "passport-sized" in its advertisements from July onwards.
Starting with the CCD-M8, Sony had named earlier 8mm products "Handycams," referring to their "handiness" and ease of use. Building on this theme, Sony incorporated the "passport-sized" image in its new TV commercials and urged people to "throw the video camera in the bag before leaving on holiday and return with memories recorded on video for life." The commercials touched a chord among consumers and sales soared. In 1989, almost ten million Japanese traveled overseas, more than double the number of ten years earlier. The boom contributed to outstanding sales, and through the end of October, distributors clamored for more products.
The icing on the cake came when the CCD-TR55 received the Good Design Grand Prize from the Ministry of International Trade and Industry (MITI), among 4,000 products from all industries. For the first time a Sony product won the top award, which recognized a product's innovative excellence, quality and value for money.
With the CCD-TR55, and its technological and marketing strategies, Sony staked its claim in the single unit video camera and recorder market.
Although originally developed for the home-use market, the price of pre-recorded software for the U-matic was high. The cost of hardware was also high. Thus, the initial response the U-matic's future for success seemed bleak. Before long, Sony decided to concentrate on the development of Betamax. Sensing a rough road ahead for the U Format, Iwama placed Morizono in charge of revitalizing its prospects. Iwama's explicit instructions were to "develop a new application for the U-matic so that it would not directly compete with Betamax for the home market." Morizono complained, saying, "I can't save a sinking ship." Iwama persisted, offering Morizono as much funding and as many people needed, and he promised not to nag him for the first five years. Morizono finally relented and agreed to take the job. He took 20 engineers from the Shibaura plant and moved to the Atsugi plant, where production of the U-matic had taken place. The project immediately slipped into the red.
Morizono first considered selling the U-matic to large corporations to use for internal training purposes. He believed there was a better chance of finding someone willing to take on the risk of accepting an untested product in a big company. To this end, he ordered Koichi Tsunoda, then stationed in the United States, to visit Fortune 500 companies and pitch the U-matic as, "the ideal system for internal training and communications." The strategy worked, and Sony received orders from such corporate giants as IBM, Coca-Cola and Ford. This was the beginning of the so-called "solutions business," that is selling solutions to client's problems.
Although the U-matic did not have a future as a home-use machine, by targeting a niche market early, Sony found a place for it to grow. European companies began to take notice of the large orders placed in the United States. Before long, U-matic sales in Europe started to rise as well. Customers gradually returned to Sony with feedback on the system as well as some additional requests, such as, "Can you include a color camera and an editing device so that we can produce our own programming?" and "Can you develop a portable model?" Sony developed the product line to meet growing customer demands.
In 1974, roughly three years after Morizono and his team had moved to the Atsugi plant, they received a visit that would change the fate of U-matic. The visitor was Joseph Flaherty, then vice president at CBS Inc., one of the three major U.S. television networks. He had come to ask if Sony could develop a U-matic model specifically for commercial broadcasting.
Flaherty wanted a product that could produce the same image quality as 16mm film, but that was lighter and easier to use than existing models. CBS was eager to participate in the development of the product and hoped that Sony would collaborate in achieving the goal.
At the time, shooting news reports with a film camera offered far greater mobility than with a video system, which required a huge van equipped with a studio camera and VTR. However, real-time broadcasting is what makes news, and 16mm cameras are no match for video in this respect. Eliminating the need to develop film or to convert the image into television signals drastically reduces time and costs. "The ideal system would incorporate the advantages of both 16mm cameras and video." In reality, CBS had years earlier combined the industrial-use U-matic system with an industrial-use hand-held video camera to achieve both the mobility of 16mm cameras and the real-time image processing capabilities of video. Thanks to the revolutionary U-matic video system, CBS was able to deliver images from President Nixon's visit to Moscow in 1974 faster than its competitors. However, as the U-matic had originally been developed as a home-use system, many specifications still needed to be improved to make it suitable for broadcast-use, hence, the visit by Flaherty.
Morizono, then director of the Video Division, had no intention of entering the broadcast market. Impressed by Flaherty's persistence, however, Morizono agreed to take on the project. He called Masayuki Takano and other engineers into his office and, in the presence of Flaherty, said, "I have decided to cooperate with Flaherty of CBS to make a broadcast-use U-matic system. I want you to develop a product in one year." Takano and his colleagues were stunned by this announcement.
The usual time allotted for product development at Sony was two years. Compounding this was that the U-matic was not even designed as a broadcast-use system. A decision had been made, and the engineers set to work, mumbling to themselves about the seemingly erratic decision. Despite the tight schedule, the team members were motivated because there was a clear target to work toward and the customer's demands were precise. The task was laid out for them: to develop a system that offered greater cost and convenience advantages than conventional film systems. Thinking about the competition was unnecessary. The main problems were meeting the deadline and the target price. The project literally became a nonstop operation. Over the next 12 months, CBS engineers visited the Atsugi plant frequently. CBS engineers were uncompromising in their drive to build the ideal product.
In 1976, after more than a year of tireless work, a broadcast-use U-matic system, the Broadcasting Video (BV) series, became a reality. The system incorporated shooting, recording, and editing functions in its compact, high-quality body and heralded a new method of news reporting dubbed ENG (Electronic News Gathering) by Morizono and Flaherty. Evident from its excellent functionality was that the end user had actively participated in the development of the BV system. By introducing ENG, broadcast stations were able to drastically cut costs, and in a short time broadcast stations worldwide began converting to the Sony system. The system's potential did not end with news gathering. Subsequently, the system was adopted for application in the area of EFP (Electronic Field Programming) as well.
The ENG system changed news broadcasting forever, but it was not the last of Sony's broadcast-use equipment. Toshio Fujiwara's team was developing other broadcast-use equipment for studio applications and on-site shooting under the supervision of Morizono. Unlike the ENG market, industry giants already occupied the market for studio-use equipment. At the time, studio-use VTRs were very expensive, two-inch quadruple head VTRs, each the size of two refrigerators. The market was divided between Ampex Corporation and RCA (Radio Corporation of America). These two Goliaths had a track record in the field of studio-use VTRs going back 20 years. Sony, the new entrant, faced a difficult task in taking market share from these companies. Moreover, in 1966 Sony had abandoned an attempt to enter the broadcast-use audio equipment business, and that only added to the difficulties this time around. However, Morizono was determined. He believed that, "If we're going to do it, we should aim to become number one in the industry. To develop Sony's broadcast equipment business, we must create high quality products capable of complex programming that will be used by broadcast stations throughout the world."
In 1976, Sony introduced a VTR with a one-inch, 1.5 head system. The VTR was smaller than the conventional two-inch, four-head system, but could perform the same functions. In fact the price, running costs and size of this new product were one-third less than the previous competitors' models. Morizono showed this product to broadcasters all over the world. Unfortunately, initial customer response was cold. The sticking point was Sony's prior retreat from the broadcast market. "We will never quit again," Morizono swore and tried to persuade potential clients. If Sony was to have a chance in succeeding in this industry, gaining the trust of broadcasters was most important.
In the meantime, Sony was involved in heated discussions with Ampex and other manufacturers over the unification of one-inch VTR standards at SMPTE (Society of Motion Pictures and Television Engineers). There were concerns about launching the new VTR before a consensus was reached, but Morizono had already made a decision. He believed that when customers would see the image quality of this VTR, they would most definitely want to buy it. Morizono said, "If SMPTE decides on different standards, we will offer customers to retrofit their equipment at wholesale prices. They will understand. If customers are willing to buy, we should launch the product now." Koichi Tsunoda adopted this sales pitch, and all major U.S. broadcast stations bought the new system.
Morizono then focused on the standardization discussions. "We need to talk to Ampex and establish a unified format to facilitate the development of products that can be used worldwide. We must not inconvenience the customer." Morizono summoned Fujiwara and several engineers prior to visiting Ampex and told them, "If Ampex's technology is far superior to ours, I'm willing to endorse it. I want you all to know this." Morizono's intention was to fully debate with Ampex about the pros and cons of the two systems before deciding which technology was better.
Ampex's arguments were logical and impressive, based on experience and tradition. Although consensus did not appear imminent, in the end Morizono's words changed the tide, "Let's take the good points of both systems and merge them to form a unified standard. We must think of what's the greatest benefit to our users." Ampex was impressed with Morizono's genuine consideration for the customer, and the discussions gradually took a constructive tone. Finally, in December 1977, a standard that adopted the majority of Sony's technology was agreed.
Nicknamed "Omega (Î©)," Sony's BVH series was based on the SMPTE helical-scan one-inch type C VTR format and realized image quality equivalent to live broadcasting pictures. This VTR was rapidly endorsed throughout the world for its low cost and easy to use editing functions. The BVH series became the world standard broadcast-use VTR. Sony next developed post-production equipment to enhance its lineup of broadcast video products.
In 1977, Morizono went to report to Iwama. By this time, sales of the U-matic were growing steadily in both the industrial and broadcast-use markets. "It took us five years to finally get in the black. If we include sales figures for abroad, we've achieved quite a large revenue." Iwama welcomed him with warm words, "Thank you. I'm proud of you."