WEBVTT - The Sony Story: Part Two 0:00:04.160 --> 0:00:07.160 Get in touch with technology with tech Stuff from how 0:00:07.240 --> 0:00:13.760 stuff works dot Com. Hey there, and welcome to tech Stuff. 0:00:13.800 --> 0:00:16.720 I am your host, Jonathan Strickland, and today we're going 0:00:16.800 --> 0:00:21.599 to continue the story of Sony. This is part two 0:00:21.720 --> 0:00:25.239 of a part series. I still don't know how many 0:00:25.280 --> 0:00:28.920 it's gonna be, but I'm hoping for three or four. 0:00:30.040 --> 0:00:33.720 We'll see. Uh. This part of the story gets really interesting, 0:00:33.880 --> 0:00:35.920 you know. We we talked in the last episode about 0:00:36.000 --> 0:00:40.080 the founding of Sony, which originally was called Totsuko, and 0:00:40.120 --> 0:00:45.960 how they had a pretty ambitious but rough start because 0:00:46.159 --> 0:00:49.879 they were trying to get established in a tumultuous time 0:00:49.920 --> 0:00:53.840 in Japan's past, just after World War Two. In this episode, 0:00:53.840 --> 0:00:59.160 we're looking at how things picked up from about nineteen forward, 0:00:59.560 --> 0:01:02.760 so let pick up from there. Ninety eight, Sony got 0:01:02.760 --> 0:01:05.880 an interesting start to the year. The company had shipped 0:01:05.959 --> 0:01:10.520 thousands of radios to the United States. Now, at that time, 0:01:10.959 --> 0:01:14.080 Sony didn't have a presence in the US, like there 0:01:14.160 --> 0:01:17.560 was no Sony Corporation of America at that time, so 0:01:17.680 --> 0:01:21.880 they had to depend upon other companies to end up 0:01:21.959 --> 0:01:26.160 handling US sales of Sony products and distribution as well. 0:01:26.680 --> 0:01:30.039 So they were working primarily with a company called agrod 0:01:30.080 --> 0:01:33.040 A g r o d. To handle U S sales, 0:01:33.640 --> 0:01:38.000 and they were distributing through the Delmonico International Sales network, 0:01:38.800 --> 0:01:42.400 which was primarily based on New York. The radios from 0:01:42.440 --> 0:01:47.120 Sony were in a Delmonico warehouse and on January nineteen 0:01:47.200 --> 0:01:50.640 fifty eight, a group of thieves broken too the Delmonico 0:01:50.760 --> 0:01:57.000 warehouse and stole four thousand Sony radios. And even more 0:01:57.000 --> 0:02:00.960 interesting than that, they didn't touch the other radios that 0:02:01.000 --> 0:02:05.240 were in the warehouse, only the Sony ones. Now, that 0:02:05.320 --> 0:02:08.360 turned out to be great free publicity for Sony because 0:02:08.360 --> 0:02:11.280 the thieves took Sony's radios and left all the others behind. 0:02:11.560 --> 0:02:15.720 So something must be special about the Sony radios. They 0:02:15.720 --> 0:02:17.840 had to be better than the others because those were 0:02:17.880 --> 0:02:22.040 the ones that the thieves specifically targeted. Sony was of 0:02:22.120 --> 0:02:24.679 two minds. The executives were two minds of this. One 0:02:24.760 --> 0:02:29.440 was that, well, shucks, now we have to build replacement 0:02:29.600 --> 0:02:32.120 units for the ones that were stolen because we still 0:02:32.160 --> 0:02:34.640 want to sell things in the US. But also, yea 0:02:35.080 --> 0:02:39.200 free advertising. Everyone is going to want a Sony radio 0:02:39.280 --> 0:02:42.400 because they're good enough to steal a weird thing to 0:02:42.400 --> 0:02:45.880 think about, but it actually did give them uh kind 0:02:45.880 --> 0:02:49.679 of a beneficial view in the marketplace. Now late in 0:02:49.840 --> 0:02:54.720 nine UH Sony would end up introducing a new smaller 0:02:54.919 --> 0:02:57.839 pocket radio. You remember in the last episode they had 0:02:57.919 --> 0:03:01.839 coined the term pocketable radio. Oh, this one was called 0:03:01.880 --> 0:03:07.359 the t R six one zero, very catchy. Almost all 0:03:07.440 --> 0:03:09.959 the models I'll be talking about have a letter and 0:03:10.040 --> 0:03:13.720 number designation UM. Sometimes they would end up getting a 0:03:13.840 --> 0:03:19.200 different name, like a nickname or a common name that 0:03:19.200 --> 0:03:23.000 would be used. But this particular pocket radio would become 0:03:23.080 --> 0:03:27.320 very popular, selling half a million sets globally by nineteen sixty, 0:03:27.400 --> 0:03:30.200 so two years after it launched. This was the product 0:03:30.200 --> 0:03:33.240 that helped make Sony a household name in in a 0:03:33.320 --> 0:03:37.360 lot of different areas around the world. Although the biggest 0:03:37.360 --> 0:03:40.160 successes for the company were still ahead of it, they 0:03:40.200 --> 0:03:43.560 were also making other electronics, such as the C thirty 0:03:43.680 --> 0:03:47.400 seven condenser microphone. It had been trying to break into 0:03:47.400 --> 0:03:50.360 the microphone business for a while because the broadcast company 0:03:50.520 --> 0:03:53.160 n h K. You might have remembered that I talked 0:03:53.200 --> 0:03:56.120 about them in the last episode. Well, in h K 0:03:56.240 --> 0:03:59.240 at that time would only use foreign made microphones. They 0:03:59.240 --> 0:04:02.640 didn't make. They didn't use any Japan made microphones. Because 0:04:02.880 --> 0:04:06.080 most of the microphones coming out of Japan were pretty lousy. 0:04:06.120 --> 0:04:09.080 They were not of very high quality, and so a 0:04:09.160 --> 0:04:12.280 lot of the equipment that the NHK Broadcast Company would 0:04:12.360 --> 0:04:15.680 use came from places like Germany. Now Sony wanted to 0:04:15.760 --> 0:04:19.600 change that. They said, this is a national disgrace that 0:04:19.760 --> 0:04:23.839 our own broadcast company is using foreign technology because the 0:04:23.880 --> 0:04:27.039 stuff that's being made of Japan isn't good enough. We 0:04:27.120 --> 0:04:30.440 are going to change that now. Their first prototype was 0:04:30.720 --> 0:04:34.160 less than a total success. Had had a cellul Lloyd 0:04:34.200 --> 0:04:38.440 diaphragm with silver plating on one side, and it would occasionally, 0:04:39.400 --> 0:04:44.479 you know, catch fire, which is exciting but not something 0:04:44.520 --> 0:04:48.800 you want when you're broadcasting. I mean, your audience might 0:04:48.839 --> 0:04:51.839 find it really invigorating, and so would you, but in 0:04:51.880 --> 0:04:55.000 a totally different way. They knew that they had to 0:04:55.120 --> 0:04:58.080 change that design. So they ended up switching from cellul 0:04:58.160 --> 0:05:01.279 Lloyd to milar, essentially that same material you find in 0:05:01.320 --> 0:05:06.000 those silvery balloons, and they used gold particles deposited on 0:05:06.120 --> 0:05:08.360 the milar and they found that it worked much better. 0:05:08.800 --> 0:05:12.000 The company produced the first C thirty seven microphones shortly 0:05:12.040 --> 0:05:15.840 before television began to become popular in Japan. It had 0:05:15.839 --> 0:05:19.200 a later start in Japan that did in the United States. Now, 0:05:20.040 --> 0:05:24.280 by getting these C thirty seven microphones to broadcasters just 0:05:24.400 --> 0:05:28.160 as TV was taking off, Sony also managed to get 0:05:28.360 --> 0:05:32.120 more advertising because you could see the Sony brand name 0:05:32.400 --> 0:05:36.160 on the microphones on the television screen, so Sony was 0:05:36.200 --> 0:05:37.960 able to get another leg up. It was a very 0:05:38.040 --> 0:05:41.200 savvy move for Sony to make at this time in 0:05:41.240 --> 0:05:43.640 its history. By the way, if you're not familiar with 0:05:43.680 --> 0:05:47.799 the difference between condenser microphones and dynamic microphones, in general, 0:05:47.880 --> 0:05:52.000 a condenser mike can pick up everything in an area. Um, 0:05:52.680 --> 0:05:55.640 these are really popular because they're very simple microphones. They 0:05:55.640 --> 0:05:58.680 tend to be inexpensive if you're getting something like the 0:05:58.720 --> 0:06:01.520 blue microphones, which by the way, I love the blue microphones, 0:06:01.720 --> 0:06:04.880 but they are I think they're all condensers. They might 0:06:04.920 --> 0:06:06.840 have a dynamic microphone as well, but the ones I'm 0:06:06.880 --> 0:06:11.120 familiar with, they're all condenser mics, and tiny little noises 0:06:11.160 --> 0:06:13.560 in your environment will get picked up by those microphones. 0:06:13.760 --> 0:06:15.960 It's great if you're trying to record something in the round, 0:06:16.120 --> 0:06:17.440 if you've got a whole bunch of people and like 0:06:17.440 --> 0:06:19.800 maybe your musicians or you're having a conversation you just 0:06:19.839 --> 0:06:22.760 want to have one microphone, it's great for that, but 0:06:22.839 --> 0:06:25.560 if you are a single person talking into it like 0:06:25.640 --> 0:06:28.520 a podcaster and you just want to have a direct 0:06:28.600 --> 0:06:32.239 relationship with the listeners on the other side, I always 0:06:32.240 --> 0:06:36.400 recommend dynamic mics over condensers. The downside with dynamic mic 0:06:36.480 --> 0:06:39.360 is you have to address the microphone pretty much right 0:06:39.360 --> 0:06:41.400 in front of it. You can't go too far to 0:06:41.440 --> 0:06:43.680 the left or to the right, or back off too much, 0:06:44.200 --> 0:06:48.200 or the sound drops in volume very very quickly. But 0:06:48.279 --> 0:06:50.160 on the flip side of it, it doesn't pick up 0:06:50.200 --> 0:06:52.400 all the other noises that happened to be in the area, 0:06:52.480 --> 0:06:55.320 so you get a cleaner sound as farly, or at 0:06:55.360 --> 0:06:59.880 least you hear more of what the person potentially intends 0:07:00.000 --> 0:07:05.760 you to hear. Still getting back to Sony, at this time, 0:07:06.640 --> 0:07:10.880 very very early late fifties, they started to experiment with 0:07:10.960 --> 0:07:15.040 making video tape recorders. They had already made audio tape recorders, 0:07:15.600 --> 0:07:18.360 and then they started thinking, well, how we apply this 0:07:18.600 --> 0:07:22.480 same approach to making a video tape recorder. Now, they 0:07:22.480 --> 0:07:25.720 were not the first company to do this. Other corporations 0:07:25.720 --> 0:07:28.960 had already started to make video tape recorders. Companies like 0:07:29.040 --> 0:07:32.280 our c A and Ampex were already in the game. 0:07:32.760 --> 0:07:37.160 These video tape recorders were meant for companies like broadcast 0:07:37.200 --> 0:07:41.640 companies or sometimes medical facilities. They weren't meant for consumers. 0:07:41.680 --> 0:07:45.960 It wasn't like they were going to make VCRs. First 0:07:45.960 --> 0:07:50.200 of all, they weren't VCRs because VCR is video cassette recorder. 0:07:50.600 --> 0:07:55.320 This is before cassettes. The tape was literally reels of tape. Ah. 0:07:55.760 --> 0:07:58.960 But Sony really wanted to get into that market, and 0:07:58.960 --> 0:08:01.560 they wanted to be the company to create the first 0:08:01.720 --> 0:08:06.800 VTR produced in Japan. VTR stands for video tape recorder. Now, 0:08:06.880 --> 0:08:09.400 the early models that Sony developed left something to be 0:08:09.480 --> 0:08:13.120 desired and were meant purely for commercial businesses, not home 0:08:13.240 --> 0:08:16.320 use as I mentioned before, but still this became one 0:08:16.360 --> 0:08:21.440 of Sony's early products. By the end of nineteen Sony 0:08:21.640 --> 0:08:25.440 was listed in the first section of the Tokyo Stock Exchange. 0:08:26.080 --> 0:08:28.160 Now this one marked a really big leap for the company. 0:08:28.240 --> 0:08:30.320 They had already been on the Tokyo Stock Exchange, but 0:08:30.360 --> 0:08:33.440 in a different section and the over the counter market 0:08:33.480 --> 0:08:36.000 of the stock exchange. The Tokyo Stock Exchange was divided 0:08:36.040 --> 0:08:39.960 up into different sections, and so the first section was 0:08:40.000 --> 0:08:43.400 much more prestigious and uh it also included a lot 0:08:43.440 --> 0:08:49.080 more of the larger, older Japanese companies. So now Sony's 0:08:49.120 --> 0:08:51.720 kind of like the little guy muscling in on the 0:08:51.720 --> 0:08:56.160 big guy's territory. Ah, and the folks over at Sony 0:08:56.200 --> 0:08:59.520 were beside themselves. They're very happy about this because it 0:08:59.600 --> 0:09:03.160 showed that their hard work was paying off. Now, a 0:09:04.240 --> 0:09:08.400 Sony employee named Leo Asaki would invent a new solid 0:09:08.640 --> 0:09:14.720 state component, the tunnel diode, also known as the Asaki diode. Now, 0:09:15.040 --> 0:09:18.040 I'm not going to dive too far into the technology 0:09:18.080 --> 0:09:20.240 here because I don't want to get buried in it, 0:09:20.280 --> 0:09:22.559 but you do need to know exactly, you know, kind 0:09:22.559 --> 0:09:24.880 of what a diode does in at least in general. 0:09:24.960 --> 0:09:30.120 So basically, a diode directs electricity traffic. It's kind of 0:09:30.120 --> 0:09:32.920 like a one way street. It allows current to flow 0:09:33.000 --> 0:09:35.400 in one direction and prevents it from flowing in the 0:09:35.480 --> 0:09:39.560 reverse direction. That's the ideal. Now, in reality, that's not 0:09:39.640 --> 0:09:42.679 exactly how it works because at least with some diodes, 0:09:42.720 --> 0:09:45.520 like if you get the voltage up high enough, you 0:09:45.640 --> 0:09:50.880 can reverse current across the diode. Uh, but it's not 0:09:51.120 --> 0:09:55.640 generally designed to do that. That's not the purpose typically um, 0:09:56.040 --> 0:09:58.400 but you know, basically that's the idea is that's a 0:09:58.400 --> 0:10:02.160 one way street. The Asaki diode is a semiconductor that 0:10:02.160 --> 0:10:05.679 can work really well at very high frequencies. Now this 0:10:05.800 --> 0:10:10.480 is apart from other other types of solid state UH components. 0:10:10.520 --> 0:10:12.880 At the time. A lot of them worked fine, but 0:10:13.040 --> 0:10:18.199 not at high frequencies. If you're just creating a transistor radio, 0:10:19.000 --> 0:10:21.920 low frequencies might be fine. But let's say you want 0:10:21.960 --> 0:10:26.959 to get into something else, like creating transistorized television or 0:10:27.000 --> 0:10:30.640 a microwave oven, you need to have transistors that can 0:10:30.679 --> 0:10:34.000 work at higher frequencies. So this ended up being a 0:10:34.080 --> 0:10:37.800 huge development and Sony Sony began to look into using 0:10:37.800 --> 0:10:42.040 the diode to make those more complex electronics. And abuca's 0:10:42.080 --> 0:10:45.760 goal was to build the world's first transistor based television set. 0:10:46.640 --> 0:10:48.560 By the end of the year the company had done it. 0:10:49.200 --> 0:10:52.920 They created a prototype of the TV eight DASH three 0:10:52.920 --> 0:10:57.760 oh one that was the first non projection type transistorized television, 0:10:58.120 --> 0:11:02.720 and they launched it in May nineteen sixty. Now, the 0:11:02.720 --> 0:11:05.679 transistors took up much less space than vacuum tubes, which 0:11:05.720 --> 0:11:09.800 meant you could create a much smaller television technically, this 0:11:09.960 --> 0:11:13.079 TV was a portable TV, and it even had a 0:11:13.160 --> 0:11:15.320 handle on the top of the casing which was made 0:11:15.360 --> 0:11:18.760 out of metal. Uh so you could get this, you know, 0:11:18.840 --> 0:11:21.320 just grab it by the top and poured it around. 0:11:21.800 --> 0:11:25.640 It's a little hefty, weighed about twelve pounds. I measured 0:11:25.960 --> 0:11:29.680 eight by seven by nine inches, and it cost about 0:11:29.760 --> 0:11:32.880 as much as conventional televisions did, and of course those 0:11:32.920 --> 0:11:35.520 were bigger and not meant to move around, and had 0:11:35.600 --> 0:11:39.840 vacuum tube technology rather than transistors. In fact, the television 0:11:39.880 --> 0:11:42.960 market in Japan was pretty small, and even globally it 0:11:43.040 --> 0:11:46.440 wasn't that big. Televisions were still considered a luxury item 0:11:46.480 --> 0:11:48.920 in a lot of places. And on top of all 0:11:48.960 --> 0:11:51.800 of that, the TV eight three oh one wasn't terribly 0:11:51.840 --> 0:11:54.400 reliable when it first came out. They frequently broke down. 0:11:54.520 --> 0:11:57.160 They in fact, got a nickname. They started to be 0:11:57.200 --> 0:12:04.240 called Sony's frail little Baby's not terribly complimentary. In nineteen sixty, 0:12:04.280 --> 0:12:07.160 Akio Morita would make the decision to open a branch 0:12:07.200 --> 0:12:10.360 of Sony in the United States. This would become the 0:12:10.400 --> 0:12:14.440 Sony Corporation of America, and the reason for opening up 0:12:14.480 --> 0:12:18.040 a branch in the US was that Sony was earning 0:12:18.040 --> 0:12:20.840 about half of its revenue at that time from the 0:12:20.920 --> 0:12:24.880 overseas market, so of its revenue was coming from Japan 0:12:24.920 --> 0:12:28.280 and the other was from everywhere else. If they were 0:12:28.280 --> 0:12:31.800 able to move manufacturing and marketing overseas, they could end 0:12:31.880 --> 0:12:34.760 up making even more money, They could save in costs, 0:12:35.480 --> 0:12:38.840 and they could respond faster to the market. It just 0:12:38.920 --> 0:12:42.800 made good business sense. So Sony became the first Japanese 0:12:42.800 --> 0:12:46.760 company to enter the American market this way, conducting business 0:12:46.800 --> 0:12:52.839 like an American corporation but operated by a Japanese company. Also, 0:12:52.880 --> 0:12:54.840 at that time, Sony was growing tired of selling and 0:12:54.880 --> 0:12:58.480 distributing Sony products through other American companies. You know, I 0:12:58.520 --> 0:13:03.320 mentioned those previous slee with Agrod being the company that 0:13:03.400 --> 0:13:07.040 was handling sales and Delmonico handling distribution. Sony was getting 0:13:07.080 --> 0:13:09.720 tired of that. They would prefer to be able to 0:13:09.720 --> 0:13:12.839 handle that themselves, especially since some of those companies were 0:13:12.880 --> 0:13:15.920 resisting Sony's push to get the products in stores across 0:13:15.920 --> 0:13:20.840 the United States. Delmonico in particular. Delmonico was saying, well, 0:13:20.960 --> 0:13:23.320 our market is in New York and it would take 0:13:23.320 --> 0:13:25.480 a lot more effort for us to get this stuff 0:13:25.520 --> 0:13:29.960 across the entire US and Sony. Sony's aspirations were to 0:13:30.080 --> 0:13:33.040 have those products really hit the US hard, but in 0:13:33.160 --> 0:13:35.160 order to do that, they needed to take over that 0:13:35.240 --> 0:13:40.200 distribution part. So creating a base of operations within the 0:13:40.280 --> 0:13:44.280 U S would allow them to do that. Uh, after 0:13:44.400 --> 0:13:49.400 that Delmonico problem, they decided that they wanted to get 0:13:49.400 --> 0:13:51.480 out of that contract, and that was gonna be a 0:13:51.520 --> 0:13:55.959 hard sell, right, Delmonico had this exclusive contract with Sony, 0:13:56.040 --> 0:13:57.640 so how do you get out of it? Sony was 0:13:57.679 --> 0:14:01.000 actually able to get out of it because Delmonico violated 0:14:01.040 --> 0:14:05.360 the contract agreement. Delmonico had an agreement to distribute the 0:14:05.480 --> 0:14:09.880 radios that Sony created, but not the TVs. But Delmonico 0:14:10.120 --> 0:14:13.760 said they would end up distributing the TV eight three 0:14:13.760 --> 0:14:16.920 oh one in the United States. They said it without 0:14:17.040 --> 0:14:21.440 Sony giving their approval, and that was when Akio Marita said, 0:14:21.440 --> 0:14:23.840 all right, that's enough, We're not going to deal with that. 0:14:23.880 --> 0:14:27.240 We're gonna cut ties with Delmonico and we're going to 0:14:27.320 --> 0:14:31.240 start doing this ourselves. Now. It wasn't as simple as 0:14:31.280 --> 0:14:35.240 opening up a shop in Japan. Any company wishing to 0:14:35.280 --> 0:14:38.000 open a business in another country first had to secure 0:14:38.040 --> 0:14:41.560 the approval from the Ministry of Finance in Japan, but 0:14:41.600 --> 0:14:44.280 the company was able to obtain permission from the Japanese 0:14:44.360 --> 0:14:47.280 government and open the Sony Corporation of America on February 0:14:47.360 --> 0:14:53.000 fift nineteen sixty. Their base of operations was a warehouse 0:14:53.040 --> 0:14:56.720 on five one four Broadway. That's where they stored their 0:14:56.760 --> 0:14:59.720 products that had formerly been in Delmonico's buildings. There's actually 0:14:59.720 --> 0:15:03.080 a store about how several Sony executives on one cold 0:15:03.200 --> 0:15:08.760 night in nineteen sixty rented eight trucks loaded up all 0:15:08.840 --> 0:15:14.000 of the electronics in Delmonico's warehouse that belonged to Sony, 0:15:14.080 --> 0:15:17.600 and then shoot them across to five fourteen Broadway to 0:15:18.080 --> 0:15:20.640 put them in the new warehouse, which tells you a 0:15:20.680 --> 0:15:23.280 lot about the dedication of the executives if they're going 0:15:23.320 --> 0:15:26.680 to take part in that kind of activity. Later in 0:15:26.760 --> 0:15:30.800 nineteen sixties, Sony hit the one million transistors produced per 0:15:30.880 --> 0:15:35.440 month milestone, which is incredible because again, they were still 0:15:35.520 --> 0:15:38.360 considered a small company, one of those things that a 0:15:38.360 --> 0:15:41.200 lot of companies just expected Sony would die off. They 0:15:41.200 --> 0:15:42.760 didn't think that there was going to be any staying 0:15:42.800 --> 0:15:46.080 power because they didn't have the history or the size 0:15:46.480 --> 0:15:51.400 of the larger, more established companies in Japan, but it 0:15:51.520 --> 0:15:53.640 had come a long way from being that first Japanese 0:15:53.680 --> 0:15:57.800 manufacturer of transistors. And to meet demands, Sony executives decided 0:15:57.840 --> 0:16:01.160 they needed to build a new factory. Has happened pretty 0:16:01.200 --> 0:16:05.280 frequently throughout Sony's history. Uh, they would build factories in 0:16:05.280 --> 0:16:08.600 different parts of Japan. They realized that Tokyo wasn't really 0:16:08.600 --> 0:16:11.840 a good option because the city had so little available space, 0:16:12.360 --> 0:16:15.000 and what space there was was going for a very 0:16:15.120 --> 0:16:18.840 very high price, very high demand. So they started looking 0:16:18.880 --> 0:16:21.320 outside of Tokyo and they found a spot forty six 0:16:21.400 --> 0:16:25.880 kilometers outside the city, uh near Atsugi, Japan, and they 0:16:25.880 --> 0:16:27.960 were able to get rights to a hundred sixty five 0:16:28.040 --> 0:16:33.360 thousand square meters of space. Now, the amount they paid 0:16:33.400 --> 0:16:36.320 for that hundred sixty five thousand square meters of space 0:16:36.440 --> 0:16:40.040 would have only got them about ten thousand square meters 0:16:40.080 --> 0:16:42.680 in Tokyo. That's how much more expensive it was inside 0:16:42.680 --> 0:16:45.960 the city versus on the country. You know, it's more 0:16:46.000 --> 0:16:50.280 than a factor of ten, which was kind of incredible. Uh. 0:16:50.520 --> 0:16:53.640 That space went not just to a factory, but also 0:16:53.680 --> 0:16:56.760 to male and female dormitory. So again you had the 0:16:56.760 --> 0:17:01.520 employees living on the campus where they are working, very 0:17:01.560 --> 0:17:05.240 different kind of world than most of America. They also 0:17:05.280 --> 0:17:09.200 faced another challenge. At Suhi was a place still is 0:17:09.200 --> 0:17:11.800 a place that would occasionally get dust storms, particularly in 0:17:11.840 --> 0:17:17.040 the winter. So transistors and circuit boards in general, solid 0:17:17.080 --> 0:17:20.800 state electronics, they are not good friends with dust. Dust 0:17:20.920 --> 0:17:24.240 is a bad component to have mixed up with your electronics. 0:17:24.920 --> 0:17:27.760 So it became a challenge to find ways to create 0:17:27.800 --> 0:17:39.960 a dust free environment for the production of transistors. In 0:17:40.000 --> 0:17:43.159 August nine, Sony would build a research lab called the 0:17:43.240 --> 0:17:47.720 Sony Research Center. The company put Michio Hatoyama in charge 0:17:47.720 --> 0:17:51.879 of the lab. Leo Asaki meanwhile quit Sony to go 0:17:51.960 --> 0:17:56.040 and work for IBM. Uh and and Asaki had actually 0:17:56.080 --> 0:18:00.080 gone to hata Yama and said, hey, uh, so he 0:18:00.119 --> 0:18:01.720 wants to put you in charge of the lab. They're 0:18:01.720 --> 0:18:03.600 gonna come to you and ask you to be in charge. 0:18:03.640 --> 0:18:07.040 You should totally do it. And so Hato Yama at 0:18:07.040 --> 0:18:09.920 first thought, well, that's impossible, why would Sony want me 0:18:10.040 --> 0:18:11.960 to be in charge of the research center. But they 0:18:12.000 --> 0:18:14.520 did ask him and he said okay. And then he 0:18:14.560 --> 0:18:17.919 sees that quits Sony and goes to work for IBM, 0:18:17.960 --> 0:18:20.760 and then he jokingly Hato Yama jokingly said he had 0:18:20.800 --> 0:18:25.080 been duped by Asaki because Zasaki probably would have been 0:18:25.119 --> 0:18:27.679 the head of the lab had he stayed at Sony 0:18:27.720 --> 0:18:31.080 instead have moved to IBM. There didn't seem to be 0:18:31.119 --> 0:18:32.879 any bad blood from what I could tell. It was 0:18:32.880 --> 0:18:35.199 just one of those things where Hatoyama said, you know, 0:18:35.400 --> 0:18:37.600 if it weren't for the fact that Asaki was leaving, 0:18:37.800 --> 0:18:40.720 I never would have gotten this job. Perhaps the biggest 0:18:40.760 --> 0:18:43.639 news around this same time was that the Japanese government 0:18:43.680 --> 0:18:47.640 gave Sony permission to issue a d R stock. Now, 0:18:47.720 --> 0:18:52.040 a d R stands for American depositary receipt and it's 0:18:52.040 --> 0:18:54.320 a type of Japanese stock that can be sold in 0:18:54.359 --> 0:18:57.959 the American securities market typically. And I'm not gonna get 0:18:58.000 --> 0:19:00.760 into too much detail, because honestly, I don't understand it. 0:19:00.760 --> 0:19:03.280 When you get down to a certain level, finances to 0:19:03.359 --> 0:19:06.880 me are a type of dark magic that I probably 0:19:06.880 --> 0:19:09.800 should not look into, or else my eyes will burn 0:19:09.800 --> 0:19:12.240 out of my head or something. But here's how it works. 0:19:12.359 --> 0:19:15.840 At a basic level. You have an American bank, and 0:19:15.840 --> 0:19:19.680 the American bank would issue a d R stocks against 0:19:20.040 --> 0:19:24.119 Sony stocks deposited in the American bank itself, so the 0:19:24.160 --> 0:19:26.879 American bank would be in charge of handling all the 0:19:26.920 --> 0:19:30.719 complicated issues that otherwise would cause problems for the company 0:19:30.760 --> 0:19:34.920 back in Japan. That includes things like exchange rates, shipping 0:19:35.040 --> 0:19:38.639 actual physical stocks to stockholders, that kind of thing, stuff 0:19:38.680 --> 0:19:41.840 that is legitimately difficult to do if you're operating an 0:19:41.880 --> 0:19:47.880 overseas company, especially in the era before everything goes digital, 0:19:48.320 --> 0:19:52.120 when everything is still hard copies. Making sure you can 0:19:52.160 --> 0:19:56.320 get the physical copies of the stock to the customer 0:19:56.960 --> 0:19:59.439 and not have someone else steal it or have it 0:19:59.520 --> 0:20:02.199 get law. It was a big deal. So this actually 0:20:02.200 --> 0:20:04.560 allowed Sony to do some business in the United States 0:20:04.560 --> 0:20:08.879 stock market, but not directly issuing stock. The Sony E 0:20:08.960 --> 0:20:10.720 d R s hit the New York Stock Exchange in 0:20:10.800 --> 0:20:16.000 June ninette. When it opened, they were valued at seventeen 0:20:16.000 --> 0:20:19.600 dollars and fifty cents per share, but it would end 0:20:19.680 --> 0:20:22.720 up going up quite a bit throughout that day. They 0:20:22.760 --> 0:20:26.400 actually sold out of the shares in about an hour, 0:20:26.600 --> 0:20:29.480 and they had two million shares available when it went 0:20:29.520 --> 0:20:32.560 on sale, so people were really excited to get a 0:20:32.680 --> 0:20:35.240 chance to invest in Sony at that time. Here in 0:20:35.280 --> 0:20:39.080 the United States, one also saw Sony launched the first 0:20:39.119 --> 0:20:42.840 all transistor amp tape recorder from Japan. That was the 0:20:42.920 --> 0:20:46.679 TC seven seven seven, also known as the three seven, 0:20:47.280 --> 0:20:49.520 and Sony also launched the s V two oh one, 0:20:49.560 --> 0:20:52.920 which was the world's first transistor based video tape recorder. 0:20:53.160 --> 0:20:56.040 The VTR so it's transistor base, which meant that it 0:20:56.080 --> 0:20:58.840 was smaller like a fifth the size of your traditional 0:20:58.960 --> 0:21:04.200 VTR uh still too big for consumers, way too big 0:21:04.200 --> 0:21:07.080 for consumers um and to build the VTR, Sony actually 0:21:07.200 --> 0:21:09.560 ended up working with Ampex, which was one of the 0:21:09.600 --> 0:21:12.520 companies that was known in that space already at the time. 0:21:12.960 --> 0:21:16.880 Sony shared its expertise and transistors, and Ampex shared its 0:21:16.920 --> 0:21:21.080 expertise in VTR technology. Now, the s V two oh 0:21:21.080 --> 0:21:24.240 one could record video and do slow motion playback, and 0:21:24.240 --> 0:21:27.520 it could also capture still shots, but it also weighed 0:21:27.560 --> 0:21:30.640 more than four hundred pounds and it only had two 0:21:30.680 --> 0:21:34.280 tape heads, which unfortunately meant that no one really had 0:21:34.320 --> 0:21:36.200 a good use for the s V two o one. 0:21:36.960 --> 0:21:40.440 It wasn't versatile enough for broadcast companies, which often had 0:21:41.359 --> 0:21:45.480 VTRs that had multiple tape heads, and it was too 0:21:45.520 --> 0:21:49.920 big and clunky for a consumer and too expensive, so 0:21:50.040 --> 0:21:53.120 you really didn't have a market for this particular piece 0:21:53.119 --> 0:21:55.840 of technology, but the company didn't give up. They did 0:21:55.920 --> 0:21:59.600 decide that was important to develop a strategy that would 0:21:59.680 --> 0:22:04.000 be focusing just on industrial uses and another strategy that 0:22:04.000 --> 0:22:07.080 would focus just on consumer uses rather than try and 0:22:07.160 --> 0:22:10.160 walk a middle line and down between the two, because 0:22:10.160 --> 0:22:12.320 if you walk the middle line, you get squished, just 0:22:12.400 --> 0:22:17.040 like grape, as Mr Miyagi would say. The company also 0:22:17.080 --> 0:22:20.960 took another shot at developing an even smaller portable television, 0:22:20.960 --> 0:22:23.680 this one with a five inch screen, and in order 0:22:23.720 --> 0:22:25.399 to do that, they had to find various ways to 0:22:25.440 --> 0:22:27.639 manaturize all the different components to fit them into a 0:22:27.680 --> 0:22:31.879 small form factor that included a cathode, ray tube and 0:22:31.960 --> 0:22:36.439 the TV electron gun, as well as finding ways to 0:22:36.480 --> 0:22:40.080 fix the problems that the older television set had, primarily 0:22:40.119 --> 0:22:42.840 those temperature tolerances I was talking about. Those old sets 0:22:42.840 --> 0:22:46.200 had synchronization issues. If you expose them to heat, then 0:22:46.320 --> 0:22:50.320 the audio and video signals wouldn't match up anymore, so 0:22:50.520 --> 0:22:53.119 everything would be it would look like a really badly 0:22:53.200 --> 0:22:57.160 dubbed movie all the time. And since the uh TV 0:22:57.320 --> 0:23:00.280 eight three oh one went on sale in May, it 0:23:00.320 --> 0:23:03.440 wasn't long before those problems began to pop up because 0:23:04.160 --> 0:23:07.639 the again technology was developed in the colder months. It 0:23:07.720 --> 0:23:10.919 goes on sale in in late spring, and then the 0:23:10.960 --> 0:23:13.480 summer rolls around, and that's where you end up seeing 0:23:13.520 --> 0:23:17.320 all these issues. In response to this, Sony actually ended 0:23:17.400 --> 0:23:20.840 up building a test chamber in its uh Ins factory 0:23:20.880 --> 0:23:24.520 and subjected new designs to high heat and humidity. Actually, 0:23:24.520 --> 0:23:26.919 I guess technically this was in the research center. So 0:23:26.960 --> 0:23:29.600 they have this chamber and they would increase humidity by 0:23:29.600 --> 0:23:34.080 boiling water inside the chamber. That would end up creating 0:23:34.080 --> 0:23:37.199 steam and raise the humidity. They used electric heaters to 0:23:37.240 --> 0:23:40.359 increase the temperature, and then they started to develop the 0:23:40.440 --> 0:23:44.440 components for the new TV, and the new components worked 0:23:44.520 --> 0:23:47.640 much better in high heat and humidity, but then they 0:23:47.640 --> 0:23:50.399 found out that lower temperatures caused similar problems, so they 0:23:50.400 --> 0:23:52.840 were back to the drawing board. They also tested the 0:23:52.840 --> 0:23:55.720 television's performance when subjected to vibrations, and the way they 0:23:55.800 --> 0:23:58.640 did this was they have one of these old portable TVs. 0:23:59.359 --> 0:24:02.480