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That was just urban legend I'm pretty sure. The reason it was able to be made profitable by video rental stores, I believe, is because JVC was more willing to license out their technology than Sony, so it was cheaper and more available to the average consumer. VHS also came out with more/had more recording styles more faster, and was more willing to degrade the integrity of their system, and degrade video quality, compared to Sony.
I forget if this was the case to begin with, or if this was a retroactive codec/recording style, but you could watch a full home theater VHS copy of a movie with one VHS tape, compared to the two betamax tapes you would need. That contributes, on top of not being a more proprietary technology, to a cheaper overall price. You could also, at a certain point, record multiple hours of a basketball game, in really shitty quality, if you wanted.
Basically, VHS benefited from a sort of economy of scale, and you were able to record more for less money total, which was rapidly becoming more appealing and more relevant, compared to the marginal quality gains of betamax, as things like VCRs and more accessible home movies started to hit the home video market.
I think the only major hits betamax ended up having was sort of filling out a gap in more mid-quality video recordings for stuff like TV shows, on the production end, because they were of higher quality than VHS, but I don't remember much about that.
The result of VHS’s open system still enabled porn to show up on it sooner. And that helped more dudes want to drop $1-2k on a VCR.
Beta_cam_ did live on as a TV video format, I used one in high school and our local cable access still ran on betacam S in the late 90s.
It was the same sized tape as Betamax, but ran at a much higher speed for better quality (more info per inch of tape), they even switched to digital at some point, but I’d move on to MiniDV in college by then.
Good to know, so it's not all urban legend, a little bit of truth to it.
Also good to know about the betacam stuff, I couldn't quite remember what the situation was there.