Betting on LaserDisc: the wager on optical video media (1980)

The soundness of the bet, and the market it could not win

The heart of this decision was that a small company turned its back on the mainstream of the era — the VTR — and, ahead of the majors, bet on a single line, the optical disc, where a sound maker’s strengths could tell. As Ishizuka put it, “we do it precisely because we are at the stage where the risk is forty percent” — reading that if it waited until the odds were settled the majors would get there first, it deliberately moved ahead while things were still uncertain. The soundness of the optical disc — contactless, high-fidelity, high-resolution — was later carried on into the DVD and then Blu-ray, and one can see it proven in hindsight that the technical direction was right. That a company which had dug down into the single point of sound found, on the extension of that same line, the next-generation standard for video media shows the consistency of this bet.

And yet Pioneer could not win this market outright. Constrained by its dependence on dedicated software, the LaserDisc never took root widely in the home, and before the fruit of the optical disc had truly ripened the leading role passed to the more manageable DVD. The current of technology it had opened up appears, ironically, to have overtaken its own pioneering business. This venture shows well how hard it is for a first mover to keep hold of the fruit all the way until the market has fully spread: the power to see a technology early and the power to raise it into a mass market are different things, and unless both are present, foresight does not necessarily translate into business results.

Including the fact that the company would later face the weight of pioneering investment all over again with the plasma display, Pioneer’s course can be said to pose, again and again, the question of how a mid-sized company survives in the vast market that is electronics.