Television is an odd commodity. The best sells for less than the less-than-best. A better picture is trumped by 75¢ of monthly energy savings, not-so-smart apps, questionably better performance in direct sun light, and a slimmer bezel. In addition, television’s even slimmer profits have amplified the economic woe of capsizing consumer electronic retailers and manufactures. Thus, in my effort to ‘save the world from from poor fidelity, I offer a back-road return-path to profitability and better performance.
Let’s set the table with a quick review of recent TV history. At the outset of the 21st Century, HDTV retailing initiated a transition from specialist to mass merchants. Predictably gross profit margins shrank. AV specialists said goodbye to the heady days of televisions with 40% gross profit margins. Ah, those were the days. And Japanese manufacturers held the lions share of the HDTV market.
As the first decade of the new century advanced, South Korean TV manufacturers caught and overtook the Japanese. Although low cost manufacturing and Japan’s economic stagnation were key factors, the Koreans also replaced LCD CFL back lighting with LED back lighting. The primary benefit was an even thinner TV. Keep in mind, it was largely flat and thin, not a better picture, that catapulted HDTV into the mass sales stratosphere. Then in a stroke of genius, they re-badged their LCD TVs as the LED TV.
The TV was promoted as a new display technology. Samsung in particular, with an amazing slight of hand, successfully diverted consumer eyes from the LCD label. Their TV was an LED TV. Furthermore their promotional campaigns targeted plasma TV’s alleged weaknesses.
– High energy use: Althought it’s only 75¢ to $1.75 per month differential.
– Potential for phosphor burn-in: True, but you really have to try.
– Picture washes out in direct sunlight: Yet, to a lesser degree this also compromises LCD.
In addition, they transformed band-aids needed to mask LCD’s shortcomings into positive must have features. This included 120Hz/240Hz processing, back-light-scanning/clear motion rate, local dimming, and in-plane switching.
Their remarkable effort resulted in consumers perceiving their ‘LED’ TV as a newer, differentiated, and better product. It crushed plasma sales. Frankly, I don’t think plasma manufacturers understood what hit them. The remaining Japanese manufacturers conceded with ‘me-too’ LED/LCD products.
Subsequently the economic tsunami referred to as the ‘great recession’ slammed product shelves. Consumer wallets closed. Manufacturers responded with cut throat pricing and expanded distribution to anyone with a website and a check book. Manufacturers, mass merchants, and even on-line retailers, retreated into a survival mode.
So what can an industry do if it is saddled with low margin product and lower sales volume? It must search for product with higher gross profit. Begin with a look at a Panasonic plasma TV.
As of this writing, the Panasonic TCP65VT50 plasma TV is the best television on retail floors. It has a wider more accurate color gamut than any LCD. As all plasma television, unlike LCD, it’s free of motion blur. Its bezel is competitively thin. Then there’s the price. The Panasonic sells for less than competing LCD TVs. As an example, it sells for $1800 less than the vaunted 60 inch Sharp Elite PRO600x5FD LED/LCD.
The Sharp is a good TV, but the Panasonic is better. And it’s less expensive. As a rule, this is true for each price point of any LCD versus plasma comparison. But this observation does not yet address the core of the problem, profitability. My three step plan does. Here is my back-road return-path to profitability.
1. Take a page from the LED TV play-book and re-badge the plasma TV.
2. Raise the re-badged TV’s pricing to a level that is competitive with ‘LED’ TV pricing.
3. Limit the distribution of the ‘new’ TV to retailers who will support it.
Allow me to illustrate. Re-badge plasma with an acronym from names and terms in plasma display history. Consider Panaplex, Ionized, Saha, and Tihanyi. Yes, each is real. Our plasma TV is now the new and improved P.I.S.T. HDTV with over 6 million sub-pixels of resolution. A re-badged Panasonic TCP65VT50 is reborn as the new TCP-65-PIST HDTV. Next, increase the price to a level that is competitive with LCD counterparts. In the case of the TCP-65-PIST, add $1000 to its retail price. That’s still $800 less than the Sharp LED. Finally, distribute the new P.I.S.T. TVs via AV specialists and a regional chain in each U.S. market. Select retailers who will support the plan with sales training, state-of-the-art demonstrations, and local promotions.
You may be skeptical of my plan. You may also have some concerns such as; Is this plan deceitful? Will consumers really pay more for the new TV? Well consider this thought. If P.I.S.T. succeeds consumers will end up with a better TV, for the same price or less, than a ‘LED’ TV they probably would have purchased. Plus, if manufacturers and retailers disappear into insolvency they won’t have a choice. However, your skepticism should be centered on one pivotal deal busting prerequisite. The plan requires a progressive manufacturer with the resources and gonads to implement it.
This may be crazy enough to work. Although, you may want to select a different acronym. Hey, I’m just trying to ‘save the world ……. from poor fidelity.
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