This is actually incorrect . I worked at Sony America in the strategic planning department in the early 80s, and I can tell you the actual story of why Betamax fell to VHS. It has everything to do with corporate hubris.

Betamax was in fact technically superior, which makes sense since it was the second generation videocassette that Sony made - The first being U-matic, which used 3/4 inch tape and was used in schools and industry. As technological progress continued, Sony managed to fit the video signal on half inch wide tape and at the same time created a better cassette mechanism which was Betamax .

However, the problem with Betamax was it's one hour maximum recording time - remember this was in the days when the networks had their Sunday movie of the week which lasted for two hours. Sony America went to headquarters and ask them to make a version that could record for two hours, but Tokyo refused because from an engineering standpoint this would have reduced the quality of the video image. At least if you watched on an oscilloscope ...

Anyway, then RCA went to Sony Tokyo and asked them to make a version that would last for two hours and put the RCA name on it so there will be no quibbling about the image quality. Again, Sony refused. So RCA then went to Matsushita (who made the Panasonic brand sold in America) and ask them to create a two hour capacity videocassette system. And that is what became VHS-ironically, using the same older cassette mechanism technology as the original U-matic.

So, because Sony in Japan did not want to listen to their US counterparts (there were no television shows in Japan that were longer than one hour) they ended up going from having 100% marketshare to a small percentage in a very short time. While it is certainly true that the porn industry was the major propellant behind the success of videocassettes ( as it has been for newer technologies as well), it was not the reason Betamax died.