The Truth about the Shadiest Audio Empire: Sony

This is the story of the shadyiest hi-fi

company to ever exist. You probably

already know who I'm talking about.

>> No doubt Sony has just raised the

stakes.

>> Yeah, that's right. Sony. What if I told

you that it started in a little store

that was repairing radios and became one

of the largest, most innovative, not

only hi-fi company, but entertainment

giant, an empire. Sure, they make hi-fi

equipment, but they actually created

culture and also malware to put on your

computer, but we'll get to that later.

So, sit down, grab a cup of coffee, and

let's talk about the shadiest hi-fi

company to ever exist and some of some

of their shenanigans, but also some of

their achievements.

I'm Scott Noun. I'm the CEO of Audio

Advice. My wife was diagnosed with

breast cancer when she was 36 years old.

>> And I'm Randy. I'm the chief audio man

and my wife was diagnosed with breast

cancer this year. That's why I'm

thrilled to be teaming up with Audio

Advice to support this wonderful cause.

>> We're raising money for families with

mothers battling cancer through the

Helen Foundation. You'll see a link in

the description that goes to a raffle

page where we have tens of thousands of

dollars of really cool headphones,

speakers, projectors, you name it. And

then Randy and I are going to do a live

stream on October 30th where we're going

to give it all away.

>> The sad reality is that we all know

someone that has battled breast cancer.

And this is your opportunity to make an

impact on real people's lives. Whether

you can give a little or a lot, you're

gonna make a difference.

Sony's first product, that's right, you

guessed it, was a rice cooker. But we

have to go back because Tokyo in 1945

looked like somebody dropped a match on

a map. However, amid the rubble, there's

a dude. His name was Masura Ibuka. He

set up a tiny repair shop inside a

burntout department store. He was fixing

radios or well American soldiers that

needed radios to be fixed. And he did it

by scavenging parts from the dump.

Massura was kind of a big brain, but

some other guy heard about it and he was

well another big brain. Akiya Morita. I

don't know if there's any relation to

Pat Marita, but there could be. It would

be a cool story. Let's just assume that

he was related to Pat Marita, his

grandfather. Just kidding. I can't

verify that. He was a young naval

researcher with a physics degree. He had

some business sense and more

importantly, he had family money that he

could invest. The two join forces and on

May 7th, 1946, they register the Tokyo

Shushin Kagio. Rolls right off the

tongue. The Tokyo Telecommunications

Engineering Company. their first

invention. That's right, the rice

cooker. It was a spectacular failure,

but they took a hard lefthand turn and

created the type G tape recorder. They

used US military surplus wire to make

this thing. It was crude. It was noisy,

but it was kind of a sign of things to

come. They knew how to fix radios. They

knew how to make tape players from

garbage. What if they did something else

but smaller?

In the 1950s, Masura Ibuka took a

chance, bought a plane ticket, flew to

the US, and somehow convinced Bell Labs

to license their transistor technology

to a tiny Tokyo startup. Bell Labs

basically said, "Listen, we'll take your

money. Good luck." So, the company that

would later become Sony, they stuck it

into a small rectangle. The TR55

arrived in 1955. Japan's first

transistor radio. They followed that up

with the TR72. And in 1957, the TR63. It

was small enough to fit in your shirt

pocket if you had a big shirt. But guess

who loved it? American teenagers. Sony

provided young people with a way to take

their music on the go.

There's going to be a theme with that.

Anyway, it sold millions and made in

Japan now wasn't such a scary thing. And

in 1958, they shortened the name of

their company to Sony. Why Sony? A mix

of Sonos and Sunny, which they thought

at the time was a very common American

nickname. That's about as much thought

as they put into it. They got hooked on

making stuff that people liked. And that

was just the beginning of a

entertainment empire. And they thought,

hey, if our little transistor radio was

so popular, why don't we make a whole

bunch of other stuff.

>> No doubt Sony has just raised the

stakes.

>> By 1960, Sony wasn't just a scrappy

startup anymore. They were an empire in

training. They launched Sony of America.

And guess what else they did? Created

the first transistor television ever.

the TVA 301. You remember it. And by

1965, the world's first portable video

recorder. They're not just copying the

West anymore. They're out innovating it.

And by 1968, they dropped one of the

most famous products they've ever made,

the Sony Trinitron television. A color

display so good that it won an Emmy.

Now, if you owned a Sony Trinitron

television, please put it in the

comments cuz I did. and it weighed about

180 lbs. My 32-in Sony Trinitron that I

bought at the Navy PX survived Hurricane

Ivan about three different moves and

finally I just left it on the curb.

Somebody multiple people tried to pick

it up and could not and finally somebody

brought their buddy and then somebody

took it. It could still be going today.

Please put your Sony TV Trinitron story

in the comments. Every year Sony was

innovating tape decks, VCRs, even early

home computers. Their philosophy was

simple. If it plugs in, we want to make

it and we want to dominate. Sony

basically set the standard with every

product they made. Everybody else chased

them. And by the early 1970s, Sony had

money, they had the muscle, and they had

the ambition to dominate their next

frontier,

hi-fi.

[Music]

By the mid1 1970s, Sony went from gadget

maker to hi-fi king. Receivers like the

STR6065.

They proved that they can hang with the

big dogs. Pioneer, Sanooie, Morance.

Sony was not intimidated. They were even

making professional studio monitors. Oh,

they also made turntables. Sony was

perfecting music playback, but that

wasn't enough. They kind of got obsessed

with controlling music in general. And

the next thing they did was kind of

their biggest swing at controlling music

in general. And it would not be the last

time that they well tried to control

music.

But before Sony went on their pilgrimage

to control everything, um, in 1979, they

created something that you probably

remember, the Sony WMAN. They took the

press man, which was a portable tape

recorder for well, you know, press

people. Stripped out the mic, put in a

stereo head, and voila, the Walkman.

>> An indestructible rubber Sony Sports

Walkman.

>> It was a risk. They didn't expect it to

sell very well. A couple thousand. They

sold 50,000 in the first 2 months. And

that blue and silver cassette player

became a cultural icon, just like this

official Sony Walkman.

>> I actually did borrow your Walkman. By

the late 1980s, Sony had sold hundreds

of millions of Walkman's. And at this

point, they pretty much owned

everybody's ears. So, they figured, why

not own the music that they were putting

in their Sony Walkman? And Sony made a

deal that would change entertainment

forever.

In 1988, Sony bought CBS Records for $2

billion and renamed it Sony Music

Entertainment. And they weren't done yet

because then they bought Colombia

Pictures for $3.4 billion. Suddenly Sony

doesn't just make the devices that you

play your entertainment on. Now they own

the studio and the record label. Maybe

you've heard of some of these people.

Whitney Houston, Bruce Springsteen,

Michael Jackson, Ghostbusters, all under

one logo. Sony's Dream, a completely

vertically integrated entertainment

monopoly. Try to say that five times

really fast. They were going to control

your entire experience. The problem is

when you own everything, you get

paranoid about losing anything.

Before we talk about their global

entertainment domination, we have to go

back to 1982. Sony and Phillips, well,

they created something that many of us

would continue to enjoy today. The

compact disc, the discmen. It was their

own personal money printer. The CDP101

launched in 1982. No hiss, no scratches,

no rewinding, just shiny laser scan

perfection. And by 1988, CD sales ex

eclipsed vinyl sales. And by 1990, it

was the default music format worldwide.

Who wanted these things anymore? Sony

defined culture with the Walkman. And if

digital was the future, well, how were

people going to take their music on the

go?

In 1984, Sony launched the D50 Discman.

This is the D5. It was about as

pocketable as a giant Reuben sandwich.

However, soon the Discman was synonymous

with audio luxury. By the 1990s, tens of

millions of these had sold. However,

physical media, it would seem, had a

shelf life, and digital pirates, well,

they were coming. Sony's next move was

made a lot of sense, try to kill their

own creation, the compact disc before

anybody else can.

In 1992, Sony unveiled the miniis.

Smaller than a CD, rewritable, and

nearly indestructible. It's like a

cassette and a CD got together after a

long night in Tokyo. They were both

lonely. However, consumers didn't really

bite. They were expensive. Recording was

clunky. And by the time anybody even

noticed, MP3s were a thing. It's a long

story. I did a video about the whole

thing, which I will link at the end. But

Sony basically wanted to control

everything about your music playback.

The mini was Sony's own creation, not

Sony and Philips. They could control the

actual media. They could control the

software that the media was played back

on and they could control the playback

hardware. And it was the first time that

Sony really went from innovator to

trying to be a gatekeeper, desperately

trying to keep control. But when

destroying their own format failed,

well, they had one more move left.

>> What's a root can?

>> CD sales were exploding. Everybody was

buying them. So what did Sony do? Well,

let's get together with a bunch of other

labels and price fix these CDs. What's

the worst that could happen? We have to

pay a settlement, which is exactly what

happened. You remember it when we had to

pay $18 for a copy of Yanni? I have

another video about that, too, if you

want to check that one out. But the

takeaway is this. Sony and other major

labels got caught and Sony and other

major labels had to pay out a

settlement. But the thing was, the

settlement was way less than the money

that they made from price fixing CDs.

So, they didn't care. But in 2005, they

took things a step further. Everybody

was copying CDs at the time. This MP3.

>> Yeah,

>> MP3s were a thing at the time. So, what

Sony tried to do was stop all of that

unnecessary copying and they created a

rootkit which created the Sony BMG root

kit scandal. Certain CDs installed

anti-copying software on your computer.

It hid in your system unbeknownst to you

and also opened up security holes.

Hackers exploit it. Users riot. lawsuits

pile up. The same company that gave us

freedom music on the go now becomes the

villain of digital control. And by the

2000s, Sony's once shiny empire was

falling apart because of greed and

paranoia. They started by putting music

in your pocket and ended with putting

malware in your computer. Well done,

Sony.

>> Uh, what can we say about Sony? What can

we say about the Japanese

>> now? Sony because Caucasians are just

too damn tall.

>> Sony's story is kind of a slow drift

from innovation to obsession. The

world's first consumer MP3 player shows

up in 1988. At the time, Sony was

betting on a track. It was, well, you

guessed it, their own lockdown audio

system. The irony was Sony's first real

MP3 player didn't show up till 2008, a

decade too late. By 2008, Apple had sold

millions of iPods. For the first time,

Sony wasn't leading. They weren't

innovating. They were chasing. Their

corporate identity for the last three

decades was innovating. However, another

division pops up and it becomes the pole

that the Sony flag is flown upon.

>> First, there was PlayStation aka PS1.

The PlayStation released in Japan on

December 3rd, 1994 and later in North

America. It was built on CD media and

now that failing music format becomes

the transport for their gaming empire.

It becomes a cultural juggernaut. Over

100 million units sold and they were

finally getting their dream, a

firstparty software giant, complete

control and a cash cow. But that success

also shifted Sony's center of gravity.

And the audio division, well, it's not

their flagship anymore. It's just a

sidekick.

TVs, phones, cameras, audio, all became

secondary to the PlayStation. The only

good thing finally forced them to

basically abandon the control that they

tried to have over the music industry.

And their audio comeback was humble,

surprising, and cheap. This, my friends,

one of my favorite speakers of all time,

the Sony SSCS5. In 2014, Sony releases

this, an ultra cheap bookshelf speaker.

Modest, affordable, and genuinely

awesome for the price. And they sold

like crazy. Still to this day, one of my

de facto recommendations for an

affordable speaker. And they just redid

it with the Sony SSC S5 Mark II, and

they're even better. And while it didn't

cover up every bad thing they did, Sony

seemed to be embracing that there was

still a place in audio for them, it was

just affordable because they were

finally just making stuff that people

wanted at a great price. And the weird

Sony story when it comes to audio is a

bit of a paradox because it doesn't end

with dominance. It ends with with a

compromising paradox. Nobody can argue

with what Sony's done. They didn't

create just audio devices. They created

culture. They literally invented

portable music. And the irony is without

the Walkman, there wouldn't have been an

iPod. Apple didn't really invent

anything new. They just out Sononyi

Sony. Same playbook, same dream, same

logic. And at that time, Sony was

everywhere. And it was really their

first mistake. This video shot on a Sony

camera. Sony's ability to make great

products has never been in question.

It's their business practices that get

pulled into question. They make people

actually question reality. And it's kind

of deja vu all over again. The headlines

from their gaming division kind of feel

like they're ripped straight out of

1999. Just replace CDs with PlayStation.

Piracy with subscriptions. Sony kind of

is the entertainment world's evil

empire. Every time they build a

entertainment death star, music, movies,

formats, games, somebody eventually

drops a photon torpedo down a exhaust

port and blows up the entire thing.

However, Sony refuses to die. They just

build another Death Star. They lose

music, they dominate gaming. Lose

gaming, take over cameras. Lose cameras,

go back to audio and drop a $150 awesome

speaker. Love them or hate them, Sony

ain't going nowhere. Because whether you

like it or not, the only reason you're

watching this video is because I'm

talking to you through a Sony product.

So maybe the devil, you know, actually

still cares about music. Just don't put

that old Neil Diamond CD in your

PlayStation. Or maybe do because maybe

that root kit from 2005 will unlock

backwards compatibility. What about you?

What is your experience with Sony? Love

them, hate them, or both? Drop it down

in the comments. I want to hear your

story. If you like this video, please

check out the Sony rootkit scandal right

now and the Sony price fixing scandal

right here. Thank you so much for

watching.