I mades a sweep of some of the local consumer electronics outlets this weekend just to see what's new. I was glad to see some "monitors" showing up on the market. (By monitor I mean a video display device and nothing more... especially no tuner, but ideally no speakers either.)
Is it just me or can someone explain to me why the TV industry is SOOOOOO slow on the uptake. I don't think you have to be too sophisticated a consumer to realize that if you have a cable box like a lot of people (read very sizable percentage) in the US do, then you are never (or seldom) going to use the tuner inside the TV. Or, coming at the issue the other direction, if you are building a home theater, then any component inside the monitor box other than the video display itself is redundant and probably not going to be used. SO WHY SHOULD I PAY FOR IT?
Why haven't monitors, especially high end, HD, 16:9 types become more readily available in the market? There are NOW a few sizes/styles to choose from, but even the nice Sony one I saw this weekend had speakers framing the sides!
What am I missing that would explain the TV industry's slow realization of the convergence of the digital and media worlds?
I'm sure profit margins are higher on TVs than on monitors, but this industry has too many players to keep real competitive initiative at bay. I just don't get it!
Thoughts, anyone?
RickR
Monitors vs TVs
Mon, 07/11/2005 - 00:11
#1
Monitors vs TVs
I wonder if it has to do with the way that they have always sold TVs and the fact that most people still expect there to be a tuner built-in. Why should manufacturers bear the cost of re-engineering their products to remove the tuner when very few people think about that as a cost savings option? I actually agree with you, but can see why the manufacturers are doing it.
I would also argue that in the home theater world, you really do have "monitors" in front projectors that are purely display devices - no tuners or speakers. These devices however came from the display only world and never had TV tuners built-in so the manufacturers never added them.
RickR, you're not alone in your thought process. Many feel that a TV should not come with a tuner to better price TVs for cable and satellite box users.
On the flip side, the FCC has specific mandates for HD tuner integration in certain segments to better accellerate the DTV transition. In order to reclaim valuable spectrum from the transition, the current rules state that 85% of TV owners must be capable of receiving DTV transmissions before analog service can be turned off. HD-Monitors, though ready to go for DTV, are not capable of receiving digital signals without the use of a set-top box.
In many cases, not integrating a HD capable cable tuner into TVs has hindered adoption of HD equipment. Many people don't like having to use a external box to receive broadcast signals or cable, so it's in the industry's best interest to include an HDTV tuner for broadcast signals and cable out of the box. As a benefit to the consumer, the more DTV tuners in the market, the more likely a favorite TV show will be produced in HDTV.
In time, DTV tuners will drop enough in price that it doesn't dramatically affect the price of the TV. Think about it, today you can build in 2 NTSC broadcast/cable tuners for about 4-6 bucks or less. In time, digital tuner costs will be that cheap, especially as more TVs integrate them.
It's most important to remember that it isn't the manufacturers that are readily choosing to integrate tuners. They have to comply with FCC requirements to sell TVs in the US. Moving forward, you'll see less "HD-Monitors", and more HD-integrated televisions.
Your speaker argument is also a good one, and the general concensus is that any TV likely to be used without a home theater system should be capable of playing sound on its own. Okay, I have a few different TVs in the house. My main TV has a fabulous external audio system, but I don't have an audio system for the TV in the bedroom, kitchen, or home office. Why? To me, it's just not practical.
This is really a cost-benefit issue. Most manufacturers choose not to invest a great deal into TV sound, but adjust this budget accordingly for the target price of the TV. So, the audio system in a 5000 dollar LCD rear-pro will be better than that of a 3000 dollar model. Though I assure you, the budget isn't huge. Would the TV be any more appealing if it cost 25 to 100 dollars less at a higher price point, or 5 to 10 dollars less on cheaper models?
Most would say no. Why alienate a large consumer segment if they don't plan on using the display with a home theater? What about the consumers that can't afford to do both at the same time? I'm no millionaire, so I had to suffer with TV sound until my wallet could recover before I bought my audio system. A manfacturer would lose sales by not having the TV ready to accommodate many different system configurations out of the box.
As Ron pointed out, categories like home theater front projectors do not often include speakers. The nature of these products dictate that an audio system will be present in the system. Otherwise, why have a big picture with tiny sound. However, look close at PC and budget home theater projectors and you'll often find a small speaker built in... just in case.
I hope this helps answer your questions.
Gentlemen, I agree with your explanations and they indeed carry some insight I was not considering.
I do still feel the same, however. In this age of "boutique" everything, and Sony and other brands willing (even choosing) to make unique models of their products for specific outlets such as Circuit City or Best Buy, and given the fact that leaving out a turner or speaker does NOT require re-engineering, only a different BOM (bill of materials) at manufacture time to drop cost out of the product.
I'm surprised at the cost dollar amounts cited for these components (tuners, speakers) as proportion of the total cost of production. The cost is NOT just the cost of goods, but the assembly, QA, inventory, logistics, etc.
I do agree with the fact that the TV market is highly segmented... that there is a wide variety of configuration requirements. What I don't get is the fact that I can get 10 different variations of the same beer, but can't get a TV monitor that meets my needs. I do not agree that seeing a monitor at a lower price sitting on the shelf as one of 50 different "TVs" on display would alienate a customer. It would just be a model that didn't meet the needs of that buyer, much as many of the others would not. That doesn't create alienation; it creates simply the impression of choice. If 85% of the 50 were monitors, then I would agree... and yes, I ONLY want a monitor for one of 5 TVs in my house too.
None of us (presumably) have access to the market research that would say how big the segment is that would be interested in a true monitor and how resistant they would be to buying redundant components as I have argued, but I do suppose that the answers lie in that market research. What I suspect is that the industry (TV industry) is suffering from an age-related inertia that makes it less light on its feet than the younger computer industry where such variety and configurable is almost too extreme.
Rick, your points are well made and elegantly spoken. I applaud you for your opinion. In fact, a well written article on this subject would be more than welcome here at TechLore.
As an individual that has spent many years in the consumer electronics category, I can think of several reasons as to why what you're asking for will probably not happen.
Unique products offered for Best Buy and Circuit City are a double edged sword for manufacturers. As far as televisions go, there are few "true" exlcusives offered to these retailers. Take a company like Mitsubishi. Their first year in retailing products to Best Buy, the 2 exlusive models did not require any special engineering. In fact, they were almost identical to their "Silver" line of products, except that they had no special coating on the shield and the "PerfectColor" feature was disabled. As far as the production was concerned, the TVs were virtually identical. The sheilds are probably not applied until after production, and the feature I mentioned was probably present in the TV and disabled in a service menu. In essence, the same run could produce both models.
The other type of exclusive is usually a small generic manufacturer that only produces for a particular chain... normally because the firms output would not be able to produce enough product for many retailers. Best Buy is an oddity in that they can move enough boxes to support a small company on its own. Virtually all other TV retailers cannot make that claim.
As far as costing goes, they are just educated guesses, though I did factor in more than just part cost. To keep it realistic, sunk costs would not be factured into these decisions anyway.
Despite what you think, removing the tuner or speakers does require some re-engineering. In many cases, you'd need a different chassis, different boards, new remote controls, different programming, and new documentation. All of these add their own costs by removing features. Plus, drastic changes in the sets manufacturing requires different runs, and different inventories.
Plus, the demand for these stripped down TVs may not be as strong as for full-featured models, thus production in smaller runs. That being said, it may often be more expensive to produce a TV without speakers or a tuner.
You then must consider the retailer. It costs them money each time they decide to inventory a particular model. Would a retailer choose to offer the same TV without a tuner or speakers, given the costs are similar? I'd venture to say no. As someone who spent many years selling electronics, adding additional models creates lots of new headaches. Do you think it's more expensive for the manufacturer if they make a product that no one buys? You bet it is.
When I said "alienate a consumer segment" I was speaking from a manufacturers point of view. Why make 2 products that appeal to different users when I can make 1 that appeals to everybody...given that the difference in price is negligeable?
Electronic firms produce their model lines with major differences in features or quality, but they are mostly geared to be appealing to the maximum amount of users. I don't care if the TV has speakers... I can choose not to use them (though I do wish more designers would choose not to side mount them). Okay, if removing the speakers saved me $250 bucks on a $3000 TV, I'd think about it, but the difference wouldn't be anywhere near that significant. I stand by my estimates. That being said, they do try to reuse as many parts as possible, especially those like a chassis, which is expensive to inventory.
Manufacturers are on the same side you are about the FCC's tuner requirement. The current cost for integration is poised to be somewhere between $50 to $100 according to the Consumer Electronics Association. However, the FCC believes that required tuner integration on all sets above 13" will reduce tuner integration costs to $9 by the end of 2006. They might be right, they might be wrong... only time will tell.
While this is a subject that has no definitive answer, you're not alone in your viewpoint. On the flip side, you have just as many who see benefits of tuner integration.
Whew, that's a lot to go through. I look forward to continuing this discussion. If I can swing it, I may be able to get one of the industry reps from a major TV manufacturer to chime in.
Again, thanks for your perspective, Matt. As I said at the outset, this is opinion looking for opinion. So I've already achieved my goal.
I've stated mine but still am not convinced of yours, with all due deference to your industry experience. (Mine, by the way, is in the computer biz -- 28 years with IBM and a few more before that.
I am familiar with form factor costing for different models. I disagree with the magnitude you assign (as subjective as this all is) to the cost needed to re-engineer for a "no-tuner" or "no-speaker" or neither model.
The issue is not "re-engineering" but rather "pre-engineering." Initial engineering would plan and design for both/all model variants. Once the engineering is done, the other variables you mention would indeed carry costs, but those, I don't believe, are so great that the become deterrants to the decision to offer the model variant. Perhaps this is where we differ. The issue is ROI. I argue that the mfgrs could attract more people to HD more quickly if they found any way possible to lower the cost of ownership. If you get me hooked on HD in my home theater, you can bet I'll buy an HDTV (with speakers) more quickly for my bedroom, etc. If I were doing the marketing for Sony TV, I'd be using this strategy and even justify below normal margins on the loss leader nature of this baiting way into more homes more quickly. AND, in my case with 5 TVs, I would buy one speakerless/tunerless (for the home theater in the family room), one tunerless with speakers (for the bonus room where I don't have external speakers (yet) but do have a cable box/DVR.
Costs like the manuals would be managed like my Mr Coffee manual... read here for the model with the clock, read there for the model without the clock. Again, pre-engineering.
Perhaps the coffee maker is actually a good example... I don't think that Mr Coffee makes a model without a clock because they save a lot on not including the clock? No, they probably have less margin on the model without the clock because they have to price differentiate them greater than the cost of the clock (including assembly and infrastructure). They do so because they want to offer choice.
Simplicity is becoming a valued commodity in its own right. My wife wanted an iron without "bells and whistles"... same for the hair dryer and coffee makers we recently bought. The demand is to get away from having to "figure out" how to work the damn thing. Similarly in the TV business, I am gated in my A/V system choices by "can my wife use it"... not that she is dumb, but because she demands simplicity. You and I use our A/V systems to play with the technology... she, and most people, just want to see a program... or flip around and see what's on. They are a good acid test. Having more then one way to do something... like tune channels or turn up the volume, flies in the face of this, I would say, very real trend.
But back to model costs. Coming at it the other way, if the cost of a tuner is so low, why in the world does anyone offer a single tuner PIP (picture in picture) TV? I'm sure you'd agree that the ease of use of a single tuner TV PIP feature is so atrocious that few are ever used and if anything they create a customer sour taste that they'd been duped... they paid for something that is useless because it is so hard to use. Would not the avoidance of such negative response cause the mfgrs to simply put the other tuner in there if it were so cheap to do? AND they would avoid the model variant costs you ascirbe to as being the reason model variants aren't likely! I have both a Sony 35" with two tuner PIP and a Sony 32" with single tuner PIP. Yes I've hooked it up to my Sony VCR to serve as the second tuner but keeping track of which tuner and which remote to use for which picture is simply too much trouble. It goes unused.
I realize what you were saying about outlet-specific models... in fact my arguement was the same as yours... the store demands an exclusive... the mfgr gives it to them for the sake of the sale, but the real cost in building the alternate model is minimal... the very point I'm trying to make as a case FOR mfgrs going a bit more boutique and makeing a model for me... and the whole market segment I represent!
Yes, the side mounted speakers is really dumb! Another market research question that needs asking and answering is: Do you want to put your big TV in a cabinet of some sort? Do currently own the cabinet or are you going to buy it to fit?
I think that the market knowledge behind this question would re-position the speakers quickly... or opt to not have them. (This one, of course, does change the form factor, but then designing with both with and without in advance would handle this back to a single form factor chasis for both models.) But I have a 35" Sony 4:3 tube now... I want to get a 16:9 flat panel. How big I can go depends on the OD width (outside dimensions) of the new TV/monitor. Having speakers on the sides that I won't use as forcing me to get a smaller screen does NOT make me a happy camper!!!
Enough for this post. Comments?
Rick
I've recycled through this issue at the local electronics outlets here in the Christmas buying season.
Situation hasn't changed much, but I have found a point of progress. Sony offers a 32" LCD with and without a digital HD tuner... at a difference of $700. Both systems have audio integrated, of course, as they are NOT monitors in the strict sense of the word, but at least, if one doesn't want to pay for and HD tuner that is not going to used, then there is this offering.
Sony is offering the 32" BRAVIA™ LCD Flat Panel HD-Ready TV KLV-S32A10 for $1999.99. It is $700 cheaper than their 32" BRAVIA™ XBR® LCD Flat Panel HDTV KDL-V32XBR1 at $2699.99. (See www.sonystyle.com then Home > TV & Video > Televisions > HDTV > HDTV by size > 30" to 42")
To their credit the Sony Style website clearly indentifies features that are upgrades from the next lower model. It seems the feature difference between these two are:
1. "WEGA Engine™ technology Delivers superb picture quality from any video source..."
2. "Digital Reality Creation® (DRC®) Multifunction V1 Circuitry Unlike conventional line doublers, the DRC Multifunction feature replaces the signal's NTSC waveform with near-HD equivalent by digital mapping processing."
3. "S-Master® Full Digital Amplifier"
4. "ATSC Integrated Tuner allows the reception of local, off-air digital broadcasts"
5. "CableCARD™ Slot provides cable subscribers with access to digitally encrypted cable channels - without the need for a set-top box"
6. "Invisible speaker design space-saving and delivers dynamic sound."
Both systems seem to have have comparable audio subsystems, though that is uncertain since I can't find where Sony has much to say about what S-Master digital audio really is.
So, while this is getting closer to what I'd like to see... what I would call component TV... it is still a far cry from it.
That product note aside, I do realize that my feelings about audio integration have as much to with box size as anything else. My home decor constraints include the desire to fit into an existing cabinet that now houses a 35" Sony tube TV. Putting speakers that I don't want to use on the side of a flat panel really eliminates that model as a possibility. I want that area for screen real estate, not speakers.
Further thoughts on this welcome.
Rick