An aspect of that war that no one seems to remember is that blank videotape cassettes were $25 in the early days. At that price point, the difference in 3 hours of recording time and 6 hours of recording time represented a significant financial investment. In addition, VHS recorders were also more price competitive than Beta recorders.
In my memory, the studios were a minor player in that format battle because the home video market didn't exist at the time. (In fact, as Hollywood does with ANY new technology, most of the studios resisted home video because they DIDN'T want the public owning copies of their films. They were in the exhibition business and actually campaigned against home video at the beginning.)
The big question was whether or not viewers would pay to own movies AT ALL, when they could see them free on TV. (Because the prerecorded video industry was in its gestation period, the issues of edited and unedited, various versions, etc. weren't even in play. The idea of collecting movies was ridiculous to the majority. Movies were something you saw first- or second-run and then forgot about until they showed up on "NBC's Saturday Night at the Movies" or the "ABC Sunday Night Movie".)
This was where porn played its role. It provided a credible reason (beyond time-shifting, which was the earliest motivator for home video) to buy into ANY home video format. Why sneak out in a raincoat when you could masturbate in the comfortable privacy of your own home? Copulation secured the future of home video.
The world is QUITE different these days so, to my mind, the connections between the HD DVD/BD conflict and VHS vs. Beta aren't as analogous as some seem to think. Nonetheless, what may be pertinent from the VHS/Beta conflict is that from its beginnings, the home video market has been very price sensitive (duh, big surprise there), so a strategy of premium product at a premium price may not be the right answer.