Monday, May 19, 2008

Harvey Schein and the VCR

Thursday's NY Times had a very good obituary on Harvey Schein, an important figure at Sony Corporation of America and other entertainment companies. Mr. Schein worked at CBS under William Paley, and in that capacity forged a deal in 1967 for a new joint venture record company with Sony, partnering with Akio Morita. Years later, when CDs came out, I bought a complete set of the Billie Holiday CBS/Sony recordings, long before CBS parceled them out domestically CD by CD. I later bought one of the CBS domestic CDs just for comparison, and was surprised by its, wooden, dull sound. I was surprised because presumably the source material for the U.S. release was the same as the earlier Japanese release, which was outstanding. But I digress.

In 1972, Mr. Schein became the President of Sony's American affiliate, which was then located at the distinctive 9 West 57th street in New York City. (It is now in the Philip Johnson AT&T building on Madison Avenue), and it was during his tenure at Sony (he later went on to Warner Communications) that he achieved eternal fame in the copyright field, as documented in James Lardner's outstanding book "Fast Forward: Hollywood, The Japanese, and the VCR Wars." Everyone interested in copyright should read Mr. Lardner's book, so here is a link to for it, with copies available for as low as 40 cents.

Mr. Schein makes his first appearance on page 28 of the Lardner book, at a memorable occasion: Lew Wasserman of MCA/Universal, during a September 1976 business dinner with Mr. Morita and Mr. Schein told them he might sue them over the Betamax. Mr Schein and Mr. Morita both recalled Mr. Wasserman adding: "We may have to do this because if the Betamax is successful, the video disc will never get off the ground." Mr. Wasserman was referring to a product called Disco Vision that MCA was developing; it was a playback only laser disc (yes, in 1976). Morita not only disagreed but added he found it difficult to see how MCA "could discuss a business deal and threaten a lawsuit at the same time. It was his policy and Japanese tradition ... that 'when we shake hands, we will not hit you with the other hand.'" (Me: prepare memo to Silicon Valley people to be aware of this strange culture).

In November 1976, the day after the suit was filed, Mr. Schein met with MCA's Sid Sheinberg
(who had been at the dinner) to try and work out a compromise that would involve Congressionally mandated royalties. Sheinberg is reported to have said that Disney, a co-plaintiff, would not go for it, but Schein concluded that the competitive threat to videodisc was the real problem. Mr. Lardner quotes Mr. Schein:

[W]hy buy a videodisc machine when you can buy a videocassette machine that does everything it does plus it records off the air and makes home copies? I don't think it was accidental that the company that took the lead in fighting the videocassette held all the patents on the videosdisc.

During a debate with Mr. Sheinberg on Walter Cronkite, Mr. Sheinberg called Mr. Schein a "highwayman," which appalled Mr. Schein whose whole career had been and remained in the entertainment business, usually on content owners' side. Mr. Schein lasted only a year or so after this at Sony, due to fights with Mr. Morita over mr. Schein's American style approach to immediate profits, something noted in the Lardner book and the Times obituary. He was an amazing figure in amazing times.


Anonymous said...

(Me: prepare memo to Silicon Valley people to be aware of this strange culture).

A few years later (1985 or 86), I was negotiating a TV co-prod with the CEO of a mini-major; in his office one morning:

squawk box (SB): Mr. Big - I have Mr. Bigger's ass't on the horn; she wants to know if you're still planning on lunch with him today?

Mr. Big (MB): Why not hon? [ancient times]

SB: She just heard from their counsel that we served papers this morning....

MB (impatient): So? Just because I'm suing him doesn't mean we can't have lunch.

Truly an interesting culture.

And the same thing happened to me again a few years later - I was producing a TV series, being sued re the series by one of the majors, at the same time the vice chairman of their board and I were co-producing another (and soon successful) special - go figure.


Anonymous said...

Well the 40 cent copies appear to be sold out at Amazon... Good thing it is available at my library.