if you wanted to start a business Japan after World War II was probably the worst place for that however inside a bomb damaged office building in the middle of Tokyo two Engineers began their dream company Against All Odds and fast forward to today Sony is everywhere from consumer electronics to music movies video games and even an entire line of robot dogs Sony does it all but with their hands in so many Industries they're faced with the brutal reality about business enemies are everywhere throughout their history Sony has faced many battles including being stabbed in the
back by Nintendo and potentially infiltrated by the North Korean government so in this video we're unraveling the entire history of Sony their rise from a struggling radio repair service to a hundred billion Empire [Music] Akio Marita was born in Japan in 1921 and from a very early age he was groomed to take over the family business for the past 14 Generations his family had run a brewery that had passed down from father to son even from just 10 years old Akio was attending all the company's board meetings things however he seemed more interested in tinkering
with radios and photographs than running the family business and he begged his father to let him study Physics and Engineering instead of Economics surprisingly his father agreed and this decision potentially saved his life After Japan bombed pill Harbor the Army drafted millions of military-aged men but since AIO studied physics he could design weapons for the Army instead of fighting on the front lines so in 19 1944 Akio got an engineering job in the Navy and that's where he met his future business partner Masaru Iuka Akio and misaru quickly bonded over their shared passion for technology
they hated using it for war though and they both dreamed of Building Technology that made people's everyday lives better nevertheless the world was at War and as Engineers AIO and Masaru knew that Japan's military technology was years behind the US so it was only a matter of time until they were on the losing side of the war in August of 1945 their prediction came true the US dropped atomic bombs and Japan agreed to a complete surrender AIO and masaru's jobs at the Navy suddenly disappeared and for now they went their separate ways Akio began teaching
at a university whilst Masaru decided to start his own small company at this point though Japan was one of the worst places in the world to be starting a business most major cities had been firebombed to ruin ruins almost half of the people had nowhere to live and the homeless froze to death on winter nights the police were also nowhere to be found and there were no legitimate jobs this meant many young women resorted to sleeping with American GIS in exchange for food whilst many young men joined the Yakuza essentially the Japanese Mafia given this
Bleak situation in Japan it's kind of crazy Masaru had so much optimism about starting his business but he wanted to build a company where Engineers could work to their heart's content and he was determined to make it happen no matter what and so Masaru began working on his first product an electric rice cooker however the rice cooker either drastically undercooked the rice or burnt it to a crisp and so the product failed horribly Masaru then tried making an electric heating blanket which was unsafe and also failed but Masaru just kept going believing every failure put
him one step closer to succeeding and eventually he found what the market needed back during the war the Japanese government had gone around opening up radios and cutting the wires so they couldn't receive longdistance signals with us propaganda now that the war was over though all these radios needed fixing and Masaru began offering a radio repair service this let people listen to foreign news and music and as a result masaru's business was featured in one of Japan's largest magazines masaru's old friend AIO happened to read the magazine article and once he learned about masaru's engineering
business he reached out to see if he could help Akio and misaru soon decided they wanted to set up a company together where they'd work on developing new products but first AIO had to ask for his father's blessing remember that for almost 300 years it had been his family's tradition to go into the brewery business surprisingly though his father allowed AIO to break tradition and follow his passion and he even gave Akio and mazaru 190,000 yen to help them get their new business started so in 1946 Akio and Masaru formerly Incorporated the Tokyo telecommunications Engineering
Corporation the company that would eventually become Sony with that name some money and a growing team of Engineers all they needed now was something to sell it took a few years of trial and error but in 1950 Akio and mazaru started making a new kind of tape recorder for the government which wasn't a big success but it did Lay the foundation for a portable version which was the company's first hit product but then just as the tape recorder business was getting exciting a new technological innovation changed everything in 1952 Akio and Masaru learned that the
company that invented the transistor was offering other companies the chance to license the technology in exchange for a royalty the transistor was completely revolutionizing electronics and so Akio traveled to the US and negotiated ruthlessly until he secured the licensing for Japan meaning they could use transistors in their products however during this trip Akio was stunned when he saw the Towering skyscrapers in the US and on his way back to Japan he also stopped by Germany which was already making an incredible economic comeback after the war it was clear Japan was lagging behind other countries when
he finally returned home aio's waiter placed a little paper umbrella on his dessert and told him it had been made in Japan the waiter was just hoping to amuse him but instead Akio felt a deep sense of Shame about his country from this moment on he had a new sense of purpose AIO was determined to make the words made in Japan actually stand for something but it wasn't going to be [Music] easy now that they had the license to make transistors Akio and Masaru had the chance to turn their company into a global brand so
they needed a name that could be used all around the world flipping through a dictionary they stumbled upon sonus the Latin word for sound they combined this with Sony which was the slang word for a young man and together this gave them the name Sony they didn't officially rename the corporation until a few years later but they began using the Sony brand on the new product they were making transistor radios by using transistors they believed they could make make radios much smaller and more portable than the bulky radios that currently existed however when they began
Mass producing transistors over 95% of them were defective the company's funds started to run low and they had to take out a bank loan to keep going if their vision of a transistor radio failed the business would be dead but by 1955 after years of practice they made a breakthrough and began selling their first radio the tr55 but saru still wasn't content he pushed his Engineers to improve the tech further and make the product even smaller which led to the TR 63 which was dubbed the world's first pocket size transistor radio Sony were a little
sneaky with their marketing though the TR 63 was actually slightly too big to fit in most shirt pockets so the company produced shirts with extra large Pockets so that when salesman demonstrated the product it always fit the product was an instant success it was a portable radio cheap enough to be a true Mass Market product and this turned Sony into one of Japan's most promising corporations by 1957 they had over 12200 employees and by 1960 AIO started building a distribution Network in the US Sony then became the first Japanese company to get listed on the
American Stock Market but whilst the kio's expansion into the US was going great masaro was putting all his energy into a new product you see color TVs had been around since the mid1 1950s but they were blurry dim and expensive so most people still preferred black and white obviously though the first company to make color TVs that match the quality and price of black and white TVs stood to make a fortune so there was a huge race to fix this problem and Masaru wanted to win starting in 1961 Sony began developing their own color TV
and instead of just improving the existing technology Masaru decided to engineer it completely from scratch but almost every single TV they manufactured had weird visual defects so Sony had to sell them for half as much as they cost to make just to get rid of them this started to look like the biggest failure in Sony's history but as always Masaru didn't give up he had his team completely reimagine how color TV worked Masaru poured his heart and soul into improving the image quality bringing down costs and fixing all the issues with mass production eventually they
had created a new product called the Trinitron which had a brighter and Sharper Image than every other color TV on the market and because of the superior quality Sony could charge a higher price over the next few decades Sony became the world's largest TV manufacturer selling around 290 million trinitrons the product even won the company an Emmy Award in 1973 for its contribution to television and so after the success of Trinitron and Sony's Global expansion Sony was a big name in consumer electronics they'd become known for Quality helping to improve the perception of made in
Japan products just like AIO had set out to do all those years ago but he wouldn't be able to enjoy the moment for long Sony was about to enter a battle that threatened to destroy everything they [Music] built nowadays with streaming services like Netflix you can watch TV shows whenever you want but back in the mid 1970s TV shows aired live at one specific time and if you missed it you were out of luck at least that was the case until Sony stepped in in 1975 they introduced a video cassette recorder called betamax now people
could just pick a channel set a timer and betamax would record whatever was playing so they could replay it whenever they wanted the product initially looked like it was going to be a huge hit but then betamax got a serious competitor HS you see just like how we have different file formats for digital videos today video cassettes had different formats too like betamax or VHS but here's the interesting part even though betamax had Superior image quality than VHS and was widely considered the better technology VHS ended up winning the format Wars why because the VHS
was cheaper and could store four times as much content so even though Sony's product was Superior for the average person VHS made more sense so all the millions Akio and Masaru had invested into betamax were lost in just a few years however as Sony was bleeding money AIO made an audacious bet he said if his next product failed he would leave the [Music] company Akio was regularly taking flights all over the world and he often wished he had a way to listen to music so in 1979 Akio came up with the idea of the Sony
Walkman a portable music player that played audio cassettes which you could listen to Via headphones back then though people generally only wore headphones if they had a hearing impairment and defus was generally considered something shameful in Japanese culture plus tape recorders had been around for a while and they could record audio as well as play it back so almost everyone thought the Walkman was a dumb idea and that Sony was about to have another failed product however Akio believed the idea of a portable music player you could take anywhere would be popular so he declared
that if it didn't sell over 30,000 units he'd quit sure enough the Walkman became a massive hit as obvious as it may be to us today being able to listen to your own music wherever you were was an exciting New Concept back then and the Sony Walkman went on to sell around 385 million units and yet Sony were only just getting started in their plans to disrupt the music in industry firstly they set up their own record label which was initially a partnership with CBS records then they made another partnership with Philips where they agreed
to research and develop new technologies together it took them 14 years but the end result was they created the compact disc or CD a completely digital way to store audio however if the CD couldn't offset the costs of 14 years of research and development and recoup the 30 million they invested to build the CD Factory everything would come crashing down but luckily this is where the diversity of Sony's business became a massive Advantage the CD gave Sony four streams of income firstly Sony's record label got some revenue from the CDs produced in the new Factory
secondly Sony let other companies make CDs in exchange for a royalty thirdly in 1982 Sony started selling their first CD players and finally their record label sold music from some of the world's most famous artists on CDs this all LED to a crazy Snowball Effect when Sony got royalties from other companies it meant the CD format was growing in popularity this naturally led to more CD player sales driving up the demand for music which Sony's record label produced and then subsequently distributed on CDs made in their own Factory so basically when one of Sony's income
streams grew the others naturally increased as well CDs completely turned Sony's financial situation around eventually Global Production reached hundreds of millions per year using this money in 1988 Sony completely acquired CBS records and their music catalog for $2 billion this eventually became Sony Music Entertainment which is the world's second largest record label as of today and has produced albums from Bob Dylan to Michael Jackson Sony had become a dominant force in music but as always they wanted to expand even further and so Sony once again decided to enter an entirely new industry video games [Music]
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to story blocks.com magnates or click the link in the [Music] description in 1991 Nintendo released the Super Nintendo entertainment system which Sony helped build the audio system for it was an instant classic but it has some glaring weaknesses mainly the games came in C rges so developers had to use specialized computers to make games for it and they had extremely limited file sizes so it was a very complicated process to make very technically limited games now that Sony and Nintendo had a working relationship though Sony proposed a solution to build an external system that let
their console play CD based games it was a solid idea and Sony got to work on it right away but they also had another idea they could potentially make an entirely new console that only use CDs not cartridges in Nintendo's opinion this was a step too far if a lot of game developers made the switch from cartridge-based to CD based games which they likely would Sony could launch their own console and take all the developers with them Nintendo grew increasingly suspicious that Sony would betray them and so Nintendo decided to betray Sony first to the
shock of everyone at Sony Nintendo publicly announced they'd be making the exact same CD based technology Sony had pitched them but they wouldn't be working with Sony and to make the Betrayal even worse the company Nintendo was partnering with for this project was Phillips the same company Sony had created the CD with in the first place everyone at Sony was Furious But ultimately this was probably one of the worst mistakes Nintendo ever made because Sony decided to push on with the project without Nintendo and in 1994 what would have been the Nintendo play St instead
became the Sony PlayStation since the PlayStation used CDs it was a much more attractive platform for game developers to build on and the games themselves could be way more ambitious than those made for Nintendo consoles which use cartridges plus Sony simply had more resources than Nintendo so Sony packed their console with so much more technology and it made the SNES look like a kids toy by comparison Nintendo did release their own competitor the Nintendo 64 but only 400 games were made for it during its like time whereas the PlayStation got almost 8,000 games because of
all this the PlayStation went on to sell over a 100 million units and nearly a billion games Sony had won the console Wars gaming was now a serious business for them and they followed up this success with the PlayStation 2 which became the bestselling game console of all time with over 150 million units sold and this also taught Sony an important lesson a lot of iconic franchises like Ratchet and Clank god of war and Gran Turismo originated in the PS1 and PS2 era and Sony realized that owning intellectual properties like these was a massive advantage
and so they decided to double down on that for PlayStation in the future and apply that same strategy to their other divisions as well in fact Sony had their eye on one popular character in particular and this would result in one of the most profitable bets they ever made and a whole lot of drama [Music] Sony wanted even more Industries to conquer and so in 1989 they bought the movie studio Columbia Pictures Entertainment this became Sony Pictures Entertainment one of the five major movie studios of today however in 1998 Marvel was recovering from a brutal
bankruptcy and Sony Pictures saw this as an opportunity they approached Marvel to buy the film rights for Spider-Man their most popular character there was a lot of negotiation but since Marvel was in such a desperate need for cash at the time they ended up agreeing to an outrageous deal Sony bought the film rights for Spider-Man for a sum of just $7 million plus a 10 million payment for every movie they made and 5% of its box office revenue but given Spider-Man's popularity this was a crazy discount and it gets even Wilder as long as Sony
releases a Spider-Man movie every 5 years and 9 months they have the exclusive rights to make Spider-Man movies forever so Sony Pictures wasted no time their first Spider-Man movie starring Toby Maguire came out in 2002 it made 825 million on a budget of around 140 million and this was just from one film so their investment had already been an incredible success over the years Spider-Man has been a nearly $9 billion asset for Sony so it's crazy to think they paid just 7 million for his film rights having said that the deal could have been even
better for Sony you see at the time when they bought Spider-Man Marvel actually offered them all of their characters for 25 million but Sony Executives said nobody cared about the other Marvel characters and so that's why they only bought the rights for Spider-Man given the billions of dollars the Marvel Cinematic Universe went on to make it's crazy to think Sony could have bought all the characters for just 25 million however the Sony team wouldn't dwell on that for long as they were about to be involved in one of the largest data breaches in history but
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rates from USPS UPS DHL and global Post and we're talking discounts of up to 89% off the normal price over 130,000 companies have grown their e-commerce businesses with ship station already and if you use my link you can literally get a free trial to test it out risk-free it's really quick to get started so set your business up for holiday season success with ship station go to shipstation.com magnates today and sign up for your free 60-day trial that's shipstation.com slm magnate [Music] in 2014 Sony employees went to their computers to find an ominous message saying
they'd been hacked by a group called Guardians Of Peace the message read we've obtained all your data including your secrets and they weren't bluffing the hackers stole terabytes of data from Sony including all the person info of Sony's employees the hackers then publicly leaked a lot of Sony's sensitive information online this included confidential emails between Sony Executives some of which were very embarrassing like one where a Sony exec had called Angelina Jolie a minimally talented spoiled brat the hackers also leaked copies of several unreleased Sony movies they then decimated Sony's infrastructure wiping lots of their
data the hack was dubbed the most serious Cyber attack ever made against us interests so who was the group behind all this well shortly before the hack Sony Pictures was due to release a comedy film called the interview which mocked the leader of North Korea and soon the FBI and President Obama declared that North Korea was to blame for the hack and we can confirm that North Korea engaged in this attack however many prominent cyber Security Experts remain skeptical that this was the work of North Korea and details of the hack still remain a little
hazy to this day but either way whil this hack was brutal for Sony it certainly hasn't slowed them down Sony has continued to expand into new Industries including life insurance banking biotechnology Robotics and electric cars The Humble company started by AIO and Masaru in won and Japan has exceeded even their wildest expectations while Sony has had plenty of failures along the way they've always been willing to take more risks and continue to innovate they've also listened to feedback for example the founders actually hired a huge critic of their products so he could help make their
products better years later he ended up becoming Sony's president looking back over Sony's many products movies music and games it's fair to say that the world wouldn't be quite the same place without them so let me know what you think about Sony in the comments below now if you enjoyed this video then you definitely don't want to miss the story of Samsung which is actually Sony's main competitor and trust me Samsung is much bigger than you think just click the thumbnail on screen to watch that right now and I'll see you there in a second
cheers [Music]
