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Once they received government authorization, Sony and IBM immediately planned an exchange of technical personnel and started work on the development of a new magnetic tape.
It took a few months to complete the magnetic tape production line. Just as they were to ship it to the U.S., however, IBM told them that it could not be brought into Colorado, where the IBM plant was located. The problem was that the coating machine motor did not meet Colorado state standards. Moreover, American motors did not have the performance or precision that Sony required. In the end the whole machine had to be rebuilt from scratch, which took much time.
With state clearance, they finally began installation. Sony dispatched about ten employees to oversee the work. The equipment was finally installed after three months. The next step was the trial test.
The trial results were not encouraging. Many people made an issue of the tape's magnetic characteristics, but the most important aspect was actually the coating itself. This was not working as planned in the trial tests. There were two reasons : the quality of raw materials and the differences between Japanese and American production methods.
Although they came under the same name, Japanese materials differed slightly from their U.S. counterparts. As for production differences, the Japanese technique for mixing and coating the base, powder, binder, lubricants and other additives relied more on the craftsman's intuition gleaned from long years of experience. Just when he felt that it had reached the right consistency, he would nimbly apply the coating. The Americans relied entirely on measurement. This made a minuscule, but significant difference. Because of this, it was over a year before Sony was able to produce tape that satisfied both companies. Afterwards IBM devised a process so that all measurements in the coating process would be controlled by measuring instruments.
The contract with IBM provided Sony with a lump sum of $100,000 and royalties of ten cents per tape. The 10 year contract proved to be a very lucrative one for Sony. From Sony's point of view, however, the very fact that they had exported their technology to IBM was far greater remuneration than the monetary compensation. Also, the fact that IBM had signed a technical assistance contract with Sony rather than 3M, previously IBM's sole supplier and known for its excellent technology and facilities, raised everyone's assessment of Sony. Japanese newspapers played up Sony's outstanding achievement:  Good news for Japanese industry, which has a reputation for importing foreign technology.
Another exciting topic was the opening of the Sony Building in Ginza on April 29, 1966. The building, located at the Sukiyabashi intersection of Ginza, was opened on Sony's 20th anniversary.
Sony had a long-standing interest in the area. The site was where Sony had built a neon advertisement tower in 1957, which became a big focus of interest for its use of miniature electric lightbulbs rather than conventional neon tubes. Sony had set its eye on the prime location since then, and, the company had hoped to build there. In 1959, Sony rented the first floor of this building establishing a showroom in a 66 square meter space. Soon, Sony found the showroom too cramped for its original purposes because of the increase in products to be exhibited and the prime location which drew many customers.
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