Skip to comments.TV Prices Fall, Squeezing Most Makers and Sellers
Posted on 12/27/2011 10:58:05 PM PST by Cronos
Its a great time to buy a television, and Ram Lall, a television salesman, isnt happy about it. In a basement showroom of J&R, the huge electronics store in Lower Manhattan, Mr. Lall says the days of making big money from televisions are in the past. Pointing to a top-of-the line, 55-inch Sony television, Mr. Lall said it would have sold for $6,000 a few years ago. The current price? $2,599.
We are making less money because the company is forcing us to slash prices, ..
Televisions have become so inexpensive that the profits have largely been squeezed out of them, a result of a huge increase in manufacturing capacity that has led to an oversupply and continued downward pressure on prices from low-cost manufacturers and online retailers....
The earnings of mainstay television manufacturers like Panasonic, Toshiba and Sony have been hammered. Sony, for instance, is overhauling its television operations because of what one executive said recently was a grave sense of crisis that we have continued to post losses in TVs. Even newer and more nimble competitors like Samsung and LG have struggled to make much money on TVs, if any.
..For retailers, the picture is not much better. This month, Best Buy reported a 29 percent drop in net income for the third quarter, in part because the retail chain had slashed prices on televisions and other electronics.
(Excerpt) Read more at nytimes.com ...
pricing fall is great for society. It mean the poor now have higher standard of living. We can now buy and enjoy luxuries that used to belong only to the rich
55 inches is pretty small when you consider you can get a 72 inch TV. Even when you go down to a 32 inch, those sets sell for almost less than $200, so there’s a definite price cliff.
Had the same cell phone for almost 2.5 years. Normally they would be out dated junk by now. But it still does everything I want it to (HTC EVO) and I like being able to get Sprint to jump when I say “well.. I could just cancel” because my contract is up.
Same with my TV. I bought it before Obama. You know, back when people had money. a 1080p/i 42”.. It does the job just fine. I paid 600 for it on clearance at walmart.
I see no reason to replace my TV either. I never watch it.
TVs are commodity items and they always will be.
The days of high-priced TVs are gone as quickly as they came.
IMHO, most people will be happy with 32inch HDTVs, which are about the width as the most common 27 inch tube TVs. These are the same $250-300 that tube 27inch TVs cost.
There are a few folks who will fork over the money for huge TVs, but most won’t.
True, but after a point it may not be worthwhile to manufacture any more if the prices are so razor thin. Then companies exit, a monopoly is created and prices rise again. Or everyone goes out of business. Note — I’m not an economist, but it seems that way to me. What do you think?
If the profit is razor thin, then maybe we got too many manufacturers for tv, so those industries need to die to free up resources for other sectors where profit are high which mean that consumers have a higher priority for those good/services. Forcing higher prices, which is what the central planners try to do, don’t benefit society at all
I used to watch tv, but not anymore. The market is giving businesses a signal here. STOP what you’re doing because the market don’t want as many of this product anymore. I watch tv via my computer monitor. This is where the demand is
Remove the strangling regulations on everyone and everything, and everything under the sun will become cheaper. Few people have the thousands of dollars (or tens) it takes to open a new business these days and deal with all of the red tape. So there’s little competition in anything, exactly the way the socialists intended.
I have 3 hd tvs, they are all 4-6 years old, and they are off almost all the time, because there ain’t a damn thing worth watching outside of football.
You need think outside of what you think your computer monitor is. I have PCs hooked up to my 51” plasma 3D and 55” LED TVs.
Regular computer don’t have the contrast ratios that the TVs have and that makes a bug difference with picture quality.
My BluRay player is a 3D capable model from Sony. The TV isn't 3D capable. I'm in no rush since I'm rarely home to enjoy it. Unfortunately, when I reach a point that I can be home, it will probably mean a state of unemployment. I won't be wasting money on a TV set that may be necessary for food.
You need to think outside of what you think your computer monitor is. I have PCs hooked up to my 51 plasma 3D and 55 LED TVs.
Regular computer monitors dont have the contrast ratios that the TVs have and that makes a big difference with picture quality.
They had a 55” LED 1080p 3D tv with free glasses at Frys today for $700. It was tempting but we still have a great picture on our 720p Sony WEGA 50”. We don’t have cable but we do have a Roku box for streaming video and a Patriot box for movies I download. All we really watch is my wife’s British soap opera, Strictly come Dancing and Dancing on Ice. We haven’t watched a movie in over a month. If it wasn’t for Dancing with The Stars and Pandora we would cancel Roku like we cancelled Netflix.
We’ve disconnected our TV downstairs because we didn’t want to pay Comcast for two boxes. It’s a big heavy monster. It’s nice not to have that constant noise on down here. We have a TV in the bedroom. It was one my husband had when he lived with his parents in the 90’s. They got a new one and gave the old one back to him. I watch Discovery ID or an animal show and that’s about it. As long as it works, I don’t see a need to get a new TV. I’m just not that in to TV the last 5 years or so. TV was fun growing up, but it’s a little obsolete to me.
Ironic, the very common situation being on food stamps and having a huge hulking home theater TV in the living room. Whatever might be wrong with America, I don’t think OWS has a clue.
There is probably a quote from the early eighties with Mr. Lall complaining that the price dropped through the floor on VCR prices. How long did this dude think that flat screen prices would stay high?
Price, this is demand. Demand, say hello to price. And here comes Mr. Supply.
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Wow! I didn’t know that 32” had come down so far.
The other day my neighbor asked me “why do you have such a crappy TV” and I couldn’t believe my ears - it’s a 32” Visio HD.
I guess I just keep stuff a long time. I just NEVER see something “newer and bigger” in a shop and say “I want that.”
Usually, when I spring for something, it’s because it’s OLDER, better quality, and easier to fix!
A larger outlet for Hollywood’s cultural marxist propaganda does not equate to a higher standard of living.
A $199 32in. HDTV is now a throw away TV for the cost of repair (after manufacturers’ warrentee or most credit cards FREE one year warrentee has expired) may be close to the price of a newer “latest and greatest” HDTV.
For example, our $1300 JVC 40in. 720P HDTV could have been replaced by a new 42/43in. 1080P HDTV for $400 to $500 range last black friday sale.
No monopolies are created unless government grants special privileges to a particular manufacturer. Companies will exit the market or reduce production until profitability is re-established. At that point, others will jump in and prices will begin to fall again.
That's capitalism. It always works when it's allowed to.
but TV making is a global industry and profits are now razor thin. Unless you have gigantic volume like Samsung, or come up with something fantastically new in TV’s, you would find it hard to start up and make money
I have to get up at 5AM every morning so that I can work all day to help pay for all those on welfare to lounge around all day watching television on huge screens that they can now afford to buy. I guess I could afford one of these large screens as well but I just don’t have the time to sit around watching it - so why bother.
“or come up with something fantastically new in TVs”
That’s the point, innovation has been stifled. I understand what you’re saying, but I think people never adequately account for the loss of freedom. We went from horse and buggy to outerspace in a few short decades. And, while we are constantly innovating, I think there is so much lost due to stagnation that it’s almost incomprehensible.
Get a LCD HDTV. Its great bang for the buck. I have 1080i and will not need to upgrade for years.
“I see no reason to replace my TV either. I never watch it.”
That’s the biggest problem for those who spread falsehoods; an increasing number of people don’t watch TV in the evening anymore. I also have an old TV, and would probably replace it with another old one I have in the attic when the time comes; we simply don’t live around the TV the way people used to, and I certainly wouldn’t spend any serious money on one.
I think as more people realize their $5,000 TV cost $35 to make, they’re shopping smarter.
“How long did this dude think that flat screen prices would stay high?”
Look at the recent debacle where Apple gave rebates to some of the first customers to buy one of its latest gadgets (was it the iPhone?); the price fell so quickly that rather than have these people expose the hoax Apple gave them some of their money back. A lot of them were probably the losers that slept on a sidewalk for three days waiting to give their money to someone who shipped cheap Red Chinese junk here for pennies to sell it for hundreds of dollars.
Yeah, boo-hoo for the manufacturers. I was ‘squeezed’ by Samsung in 2007 when I bought a 46” LCD for over $4000. I’m looking forward to squeezing them back.
I’m eying their 46” 240Hz 2D/3D model. It’s at 1600 now, I’m waiting to get it for 1000.
The key to revenue is CONTENT. Until the manufacturers figure a way to bundle killer content with their physical sets they will continue to be the losers. Bill Gates figured that out in the 80’s.
We are making less money because the company is forcing us to slash prices,
If the individual mentioned in this article thinks the company is forcing him to sell lower, he is clueless in how business works or he is in a franchise agreement with the manufacturer...which is not really an independent business.
The point of all of this is that the market is saturated and it’s simply the cause and affect of supply and demand. In this case, the demand is lower than the supply.
The salesman was “raping” customers before and now he cries because the playing field has been leveled by nothing more than competition.
It is interesting, having a modern, flat-panel, HD TV and mostly watch old movies!
But now that the spike is over, sales have dropped off dramatically. Indeed, I have no plans to replace my 40" LCD in the family room and 26" LCD in the kitchen anytime soon.
I’ve got a small, cabinet under-mount flip down LCD tv in my kitchen that I use to view the local morning news and weather. I guess I should be embarassed to admit, the other two are still CRT models. I don’t use them all that much anymore, the programming isn’t very compelling and much of it strikes me now as being propaganda, quite frankly.
I shut off cable tv in 2008, literally hundreds of channels with nothing on. It’s just not that big a part of my life, once was, no more. I do have an Apple laptop and an iPad, as well as an older Apple tower with a large LCD Cinema Display. Those occupy my interests now.
With convergence the paradigm of “tv” as a discrete medium doesn’t really fit into my life with the exception of the old habit of viewing the morning news and weather every workday. I really could do that without the kitchen LCD, truthfully, but it’s there so I use it.
I think we've arrived at the world of "Idiocracy".
Me either. My theory is because 99% of what's on is junk.
Long ago, when there was such a thing as "production values" and "scripts", TV shows were still junk, but you could occasionally find a nugget within. Now, I think that they just hand cameras to random people, tell them to go and film other random people doing random things, and throw it up on the screen. In general, and with a few specific exceptions.....I pass. :-)
Frankly, it's nice. I have so much more time in the evenings, now.
The Industry has a view of the consumer which is unrealistic. The idea that consumers will spend $3000 for a TV, $200 per month for content, and thousands more for peripherals is unrealistic. There are some who would in a good economy, but that number is not great right now.
The Industry’s expectation that the consumer will upgrade each year is also unrealistic. First, it costs too much for each incremental upgrade. Second, we all kind of know that the next great thing is right around the corner.
Personally, I’m in a ‘settling’ mood. The 50” 720p plasma in my living room still thrills me. I passed on 1080p and 3D. I have weened myself off pay tv. OTA plus Netflix plus a DVD library of my favorite movies is all the service I need. Netflix is on a short leash. I do have 32” and 37” LCDs scattered through my home, but these are nonpremium brands. It may be a LONG time before I spend money on television. That’s the real problem The Industry has.
I’ve never understood why people are so willing to part with a large chunk of their disposable income for tv.
I get it when well-off people splurge - but I often come across people who I know are struggling, and there it is....gigantic big-screen, latest tech, expensive monthly package.
Here's another thing..I've noticed that people have started to realize that it's easy to get TOO big a set for the room..it's like sitting too close to the screen in a movie theater. No need to spend the extra thousand plus in many cases..
Same here. I also have Blu-ray and HD surround sound. I am always amazed at the FR comments about "not needing no stinkin' TV". I have tons of classic films to watch. Who cares if "nothing good is on" when I can choose what I want to watch? The Blu-ray of Ben-Hur looks and sounds amazing.
True, but visitors get a giggle out of the oldfashioned tv’s with digital settop boxes and high-falutin’ rabbit ears, lol.
TV’s may become like cell phones and printers. The basic item will be free or dirt cheap, and the consumables and services (ink, toner, minutes and programming) will be where the profit is made.
“Give away the razor, sell the blades.”