> Surely you'd just make the tape/cassette larger?

Originally, Betamax increased physical tape length, but cutting tape speed (like how vinyls can play at different RPMs) was a more economical way of cramming more hours onto the same tape by cutting quality.

Both VHS and Betamax went through multiple phases of this. Eventually VHS won by being cheaper.

https://mrbetamax.com/BetaSpeeds.htm

But this wasn't Sony's strength and VHS was consistently cheaper for longer movies.