Why TVs Have Become So Inexpensive

on Black Friday 2006 best buy advertised a steal of a deal for this 56 inch Toshiba 1199 dollars and check out this 32 inch for a whopping at $799 in 2019 the same size TV could be found for as little as two hundred and nine dollars for a 55 inch and just $79 for the 32 inch and these aren't just regular old TVs these are Smart TVs they're powerful enough to connect to the internet stream shows music and more if we're looking at this from a completely analytical perspective it doesn't really make any sense larger TVs higher resolutions more capabilities with internet connectivity it should all add up to be more expensive mass production and manufacturing improvements can help bring down costs and they have over the years but this is a dramatic drop in price generally speaking you shouldn't be able to get more for less especially when it comes to tech so how do TV manufacturers manage to drop the cost of their units so substantially and still make a profit well it's simple they figured out another revenue stream TVs have always been kind of expensive take this Westinghouse the first color TV ever sold starting in 1954 it had a 21 inch screen and costs one thousand two hundred and ninety five dollars adjusted for inflation that same TV would cost over twelve thousand dollars if it came out in 2019 this was admittedly a luxury product and not at all affordable to the masses but it didn't stay that way by 1964 color TVs were being sold for just $400 or over three thousand dollars in 2019 folks still a luxury product but a slightly more for one part of the reason for that price chopped is that once manufacturers figured it out TVs were relatively easy to make consumers really only care that they look good and sound decent so branding colors all that stuff didn't matter too much this also meant that competition was much stiffer and that helps drive prices down this trajectory paints a picture that holds up for most TVs throughout history the coolest newest TV is extremely expensive until the companies can get enough fabrication facilities to produce that particular type of television at a level that is cost-effective for them then they drop the prices down just enough to get the masses humble while still maintaining a high enough profit margin to make it a label for them this is the way things work for a long time but it didn't stay that way in 2007 the New York Times ran an article that suggested that manufacturers make approximately 20% profit margins on each individual TV besides Costco because they had a generous return policy which ended up cutting their margins in half but in 2019 those profit margins have dropped down to just 6 percent according to the chief technical officer at Vizio 6 percent is miniscule it's the kind of profit that would be unsustainable in keeping a business alive if that's all the or making that a certain point manufacturers realize that isn't all they needed to be making they didn't need to get you to spend a lot of money on the TV they just needed to figure out how to make money once you already had and if TVs were affordable enough that everyone could get one then they'd be able to maintain a long-term business after all people usually keep their TV for 6.8 years and so it's better to have a steady stream of revenue than a one-time hit every 6.8 years enter Smart TVs the turning point of the industry for consumers Smart TVs are the most convenient way to go and purchasing a TV 70% of Americans have one or more streaming services with Smart TVs those are built-in you don't need to buy a Google chromecast Apple TV or an Amazon fire stick you just get your TV and it's off to the races you even get YouTube so you could be watching me on your TV right now in 2018 thirty-seven point two percent of households had smart committees 16 percent more than the year before and this trend is expected to continue growing because Smart TVs are cheaper than ever if you've recently been in an electronics store you know that the only types of TVs that brands are selling these days are Smart TVs so how exactly do they make a steady stream of money after you already purchase the TV well there are a few weeks but quite simply they track everything you do while you're watching the TV the TV is also watching you whether that's launching an app watching cable or a streaming service or even a DVD the TV knows it uses automatic content recognition to figure out what you're watching no matter what you're watching it reports that data back to the TV manufacturer and to some third-party companies one study by Northeastern University and Imperial College in London found that almost all TV set data to Amazon Facebook and Google's ad services it also found that every TV sends that it's Netflix even if you don't install or even activate the app TV manufacturers have suggested that they use this collected data to suggest other shows you might like based on what you watch however the less bragged about use case is utilizing it to better target ads to which they do all the time to be fair these manufacturers now explain that some collection is occurring when you enable these options in your settings they've also come forward to say that your data remains anonymous and that it is possible to turn off or opt out of these trackers it just requires staying vigilant when setting up your TV and not just okaying through every step of the process but even with all that is it really that anonymous I mean you're signing into Netflix and your IP address can vaguely give away where you are in the world so it'd be pretty easy to narrow down who you are if that was something someone really wanted to do every day companies take strides to become more privacy sensitive and forward-facing when it comes to the data they're collecting on you but the only way to take real steps to maintain your privacy is to not connect to the internet and use your Smart TV as a dumb TV but as mentioned earlier this is just one way Smart TVs can be sold cheaply in an interview with the verge vizio CTO claims that data collection for ab purposes isn't the crux of their business model they could sell TVs that don't have any trackers and it wouldn't their business they've diversified their revenue streams but if they were to do that they would have to sell their TVs at a higher cost to offset the losses from not collecting data besides trackers TV manufacturers can continue to earn dollars after the TV is sold by running their own hands that could be on the splash page when you turn on the TV before switching to your streaming service or cable or it could be during one of the many free movies or shows they offer partnering with media companies also seems to be a fruitful route many Smart TVs come preloaded with the set of channels that can be washed for free once the device is connected to the Internet these channels contain high value ads because of their ease of use coming straight out of the box with these ads the company that runs the channel make some money and the TV manufacturer also makes some money in the last few years tvs have gotten a lot smarter and a lot cheaper but all tech companies need to turn a profit cheap tech or even free tech is never truly free or cheap it's just that the transaction that's taking place isn't always a monetary one for you data is the new currency with that the responsibilities that we take on as consumers have become greater and like our TVs we have to become smarter because of it if you made it this far thank you so much for checking out this video make sure to LIKE and subscribe if you so choose it really helps us out and creating awesome content like this if you're looking for more nuance we left some links in the description below for the articles that we use on researching this video and if you're interested in all things tech you should check out Cheddar's best of CES special which you can watch this Friday January 10th at 9 p.m. on chatter comm slash news Oh

Channel: Cheddar

Views: 985,453

Rating: 4.8194504 out of 5

Keywords: Cheddar, television, TV, TV cost, technology, CES, Explainer, Economics, Revenue, pricing, smart tv, tech, streaming, retail, business, visio, samsung, LG, sony, element, why tvs are so cheap, why are tvs so cheap, why tvs have become so inexpensive, cheap tv, why, tv inexpensive

Id: NWwawTnT7LM

Length: 9min 27sec (567 seconds)

Published: Tue Jan 07 2020

Reddit Comments

[u/ETosser]

Generally speaking you shouldn't be able to get more for less, especially when it comes to tech

Dumbest thing I've read in 2020 so far.

In 1981, a $4000 PC had a 5MHz CPU and ‎16K RAM. Today you can get a computer several orders of magnitude more powerful (with 30K times the RAM) for $5. Getting more for less as time passes is a hallmark of tech. TVs began plummeting in price when they became solid state, based on semi-conductors. The profit margins are stupid low now because of stiff competition.

[u/Luke_Flyswatter]

So I set up a pi hole will h a raspberry pi. It stops a lot of ads that show up on my apps section of the TV. I don't think it really helps with them collecting your data but it's worth it just to hide the annoying ads.

[u/cacahuate_]

tl;dw?

[u/carramrod2012]

we're fucked

[u/buddhist-truth]

He keep repeating himself .. terrible

[u/Hanzilol]

I got a 4k 55 in TV from Wal-Mart for 89.99 by using brickseek. It's ridiculous how cheap you can find them.

[u/Doc_Crocolyle]

Nothing but ranting and redundant info for the first 5:07

[u/abandonplanetearth]

This video is nothing but filler in order to reach 10 mins for ads. Tldw: they track you for tailored advertising.

Don't bother with this video.

[u/Tiny_Pay]

Tube TVs last a long time and u can find HD Tube sets. Heavy but great picture and sound.