U.S. and Korea Firms Will Sell Two-Deck VCR : Marketing Pact Reached After Film Industry Deal
Hoping to become a mouse that roared, tiny Go-Video Inc. announced Wednesday that it has reached an agreement with Samsung Electronics Co. of Korea that will allow the video firm to become the first to market a dual-deck videocassette recorder in this country.
Called the VCR-2, the new machine will allow consumers to tape two TV shows simultaneously, watch a rented movie while taping a TV program, edit and merge videotapes, or copy them--all of which previously required two separate VCR machines.
Go-Video will be the sole distributor of the VCR-2 in this country, while Samsung will distribute the machine in the rest of the world under a licensing agreement with Go-Video. The agreement also allows Go-Video to license its technology to other electronics firms worldwide. The company expects the machines to be available in this country by year-end.
Long Struggle
According to R. Terren Dunlap, Go-Video’s founder and chairman, the Scottsdale, Ariz., company “will be doing the engineering, design and production of some microprocessors here, but the machine will be assembled and fully manufactured in Korea by Samsung and shipped back into the United States for sale.”
“I’m extremely happy today,” the 44-year-old Dunlap said. “This has been a six-year battle to get this product to the American public.”
Part of the fight had been with the Motion Picture Assn. of America, which feared that a dual-deck VCR would steal potential profits from movie makers and distributors by allowing consumers to cheaply and quickly duplicate rented movies.
However, the MPAA recently withdrew its objection to the VCR-2 when Go-Video agreed to equip the machine with a device that prevents the duplication of videocassettes that contain an anti-copying signal.
The anti-copying features, like the dual deck design, were developed by Go-Video. “We are going to give the software manufacturers the (anti-copying) technology at no charge,” Dunlap said Wednesday. “We have solved their problem with our machine.”
Gyrating Stock
Go-Video has had its own problems, too. The company, which operates a small video production studio, lost money last year on sales of less than $500,000. Its stock went public in 1986 and has gyrated wildly since, trading as high as $24 a share and as low as 50 cents. The shares have traded recently for between $7 and $8.
In its efforts to get the VCR-2 on the market, Go-Video has been engaged in a highly publicized battle with a number of Japanese and Korean electronics manufacturers. It claims in a $250-million antitrust lawsuit that the electronics firms conspired to prevent Go-Video from manufacturing and marketing its patented dual deck by refusing to supply necessary parts.
The suit originally named the MPAA and a number of major Hollywood movie studios, but they have since been dropped, as has Samsung, under the provisions of the manufacturing agreement.
Dunlap said his company will “vigorously pursue” the suit against the remaining defendants, which include Sony Corp., Matsushita Electronic Industrial Co. (Panasonic), Victor Co. of Japan (JVC), Sharp Electronics Corp., Sanyo Electric and NEC Corp.
“We have now proven to the electronics industry that you can bring products to the marketplace despite a cartel of Japanese electronics industrialists that are destroying American consumer electronics manufacturing,” Dunlap said.
“Right now there are no manufacturers of VCRs in this country, no manufacturers of radios, black-and-white televisions or fax machines, and only a small number of color TVs are made in the United States,” he said, adding that American electronics firms “have no guts in standing up against the competition.”
“They have given up and sold out our industries to Japan. We’re proving today that you can do something about it.”
