Fatal Board · VIDEO ESSAY

The Tragic End of Memorex: The Magnetic Tape Giant That Ruled Every Cassette, Then Destroyed Itself

Subscribe to the channel! https://www.youtube.com/channel/UCb0ps9eCp0y6yP1Xg4sDDFw?sub_confirmation=1 Memorex ruled every cassette in America. The blank tapes in the kitchen drawer, the mixtape in the glove box, and the most famous question in the history of American advertising: is it live, or is it Memorex? Then the company destroyed itself. What almost nobody remembers is that Memorex was never really a tape brand. It was a Silicon Valley computer hardware company, founded in Santa Clara in 1961 by four men who walked out of Ampex, and the cassettes you bought at the drugstore were about ten percent of the business. The other ninety percent was a fifteen-year knife fight with IBM over disk drives, disk packs and controllers. This is the full story: the founding, the first independent computer tape at $31 a reel, the 1965 IPO, the first IBM plug-compatible disk drive in 1968, Alan Shugart and the first read/write floppy drive, Ella Fitzgerald and the shattered wine glass, the catastrophic 1973 loss of $119 million on $177 million of revenue, the extraordinary Bank of America rescue announced on April 1, 1974, Bob Wilson's turnaround, the $3 billion lawsuit against IBM that returned nothing, the sale to Burroughs, the moment the brand and the company were split apart forever, the $627 million leveraged buyout financed by Drexel Burnham Lambert, the $2 billion debt load of Memorex Telex, three bankruptcies, and the long afterlife of a name that has now been sold seven times. If you still have a shoebox of cassettes with handwriting on the labels, this one is for you. Tell us in the comments what is written on them. Sources and further reading: Computer History Museum, The Storage Engine, 1968: Memorex Introduces an IBM Compatible HDD — https://www.computerhistory.org/storageengine/memorex-introduces-an-ibm-compatible-hdd/ Computer History Museum archive, Business Week, Memorex: This is the year of restoration — https://archive.computerhistory.org/resources/access/text/2016/12/102762651-05-01-acc.pdf Computer History Museum archive, Memorex At 50 reunion proceedings and oral histories — https://archive.computerhistory.org/resources/access/text/2019/03/102738692-05-01-acc.pdf Memorex Corporation v. International Business Machines Corporation, 636 F.2d 1188, United States Court of Appeals for the Ninth Circuit, November 18, 1980 — https://law.justia.com/cases/federal/appellate-courts/F2/636/1188/26315/ Tedium, Memorex History: How a Tech Pioneer Turned Into a Basic Brand — https://tedium.co/2021/09/03/memorex-tape-history/ ILC Peripherals Leasing Corporation v. International Business Machines Corporation, 458 F. Supp. 423, United States District Court for the Northern District of California, 1978 Burroughs Corporation annual reports and shareholder communications, 1981 to 1986 Tandy Corporation annual reports covering the acquisition of the Memorex consumer products business, 1982 to 1993 Imation Corporation filings with the United States Securities and Exchange Commission covering the acquisition and later divestiture of the Memorex brand, 2006 to 2016 Contemporary trade press coverage of the plug-compatible peripherals market and the Memorex Telex bankruptcies, Datamation and Computerworld, 1970 to 1996 You can contact me at: thefatalboard@proton.me This channel is made by an enthusiast who loves business and technology history — nothing more. All videos are for educational and entertainment purposes only and reflect my personal views and interpretations. I research each story carefully using publicly available sources, but errors or omissions can happen. Nothing here is professional, financial, or legal advice, and this channel is not affiliated with, endorsed by, or sponsored by any company mentioned.