Check this... especially the last sentence. <snip> Strategic Partnership with Hisense=20 To create the set-top boxes that enable consumers to enjoy the company's unique service, USDTV has entered into a strategic manufacturing and financial partnership with China's Hisense Company, Ltd. The agreement includes $60 million in financing to produce 400,000 of the company's proprietary, ATSC compliant set-top boxes capable of tuning all digital and high-definition formats. The companies are also developing integrated USDTV Ready(TM) plasma and LCD televisions. Hisense is also a minority investor in USDTV.=20 </snip> http://home.businesswire.com/portal/site/moreover/index.jsp?epi-content=3D= GENERIC&newsId=3D20040316005566&newsLang=3Den&beanID=3D1868105982&viewID=3D= news_ view > -----Original Message----- > From: Bob Miller [mailto:bob@xxxxxxxxxx]=20 > Sent: Wednesday, August 4, 2004 5:40 AM > To: opendtv@xxxxxxxxxxxxx > Subject: [opendtv] Re: Barriers eroding to LCD TV adoption >=20 >=20 > Craig Birkmaier wrote: >=20 > >At 5:56 PM -0400 8/3/04, John Shutt wrote: > > =20 > > > >>Perhaps USDTV has changed their policy? This is on their website: > >> > >>http://www.usdtv.com/get_usdtv-subscription_details.php > >> > >>"Terms and Conditions: > >>A subscription to USDTV is required to receive any=20 > broadcast service=20 > >>with the USDTV receiver. By subscribing to the USDTV service, the=20 > >>customer agrees to a one-year service agreement of $19.95 per month=20 > >>for the base receiver and $4.95 per month for each additional=20 > >>receiver. The monthly service fee will be charged to the customer's=20 > >>credit card. If the customer terminates the agreement prior to the=20 > >>12-month term, a cancellation fee of $199.00 per receiver will be=20 > >>charged. For complete Terms and Conditions review our Residential=20 > >>Customer Agreement." > >> =20 > >> > > > >You guys are mostly missing the bigger picture here. > > > >The Hisense receivers are subsidized in TWO ways. > > > >Hisense is selling the receivers to USDTV below cost. I have heard > >estimates that the cost of manufacture is about $200 - THIS IS NOT A=20 > >RETAIL PRICE! > > > >Hisense sells the receivers to USDTV for about $150 - THEY ARE > >SUBSIDIZING THE REST. > > =20 > > > Hisense is not a partner with USDTV. They are selling the=20 > same receiver=20 > to WalMart for something on the order of $150 also. I cannot=20 > think of a=20 > reason they would take a loss of $50 unless it was made up somewhere=20 > else. How do you make up for $50 loss for every unit sold=20 > country wide?=20 > They are not selling many TV sets under their name. Do you know=20 > something I don't? >=20 > >The customer pays $99 at WalMart when they buy EACH receiver. In > >order to use it they must then subscribe to the USDTV service. The=20 > >fees listed above in the Terms and Conditions are in addition to the=20 > >one time price paid for each receiver. The monthly fees=20 > cover several=20 > >things: > > =20 > > > Walmart charges $198.76 with only a reference to USDTV. If you call=20 > USDTV they only talk about a $19.95 per receiver one time=20 > charge. Why do=20 > they have a $199 cancellation fee PER RECEIVER if you=20 > terminate anytime=20 > in the 12 month contract period? This would not make any sense unless=20 > you are paying for each receiver. Otherwise the most that they could=20 > charge would be the remainder of your contract. >=20 > That is if I have 4 receivers and cancel with one month to go=20 > I would be=20 > charged $800 for what would be a one month charge of under $40. >=20 > Either their web site and their customer reps or their policy=20 > is wacko=20 > if what you say is true. Already know that their web site is=20 > difficult=20 > to understand. >=20 > >1. Monthly subscription fees for the non broadcast channels that are > >paid directly to the networks that are carried; > >2. Retransmission consent fees for the local broadcast=20 > signals - this=20 > >may be the way that local broadcasters are compensated for=20 > the use of=20 > >their spectrum. > > =20 > > > What are they retransmitting? Wouldn't they just be facilitating the=20 > delivery via satellite to these broadcasters content they then want=20 > broadcast that is encrypted and found by subscribers as sub channels?=20 > Local broadcasters would either be partners or be paid cash IMO for=20 > their delivery of the content. >=20 > >3. Repayment of the subsidies for the receiver. > > =20 > > > USDTV buys the receivers from Hisense for $150 AFAIK just=20 > like WalMart=20 > does. The only subsidy is the one that USDTV gives to the=20 > customer and=20 > they have to recoup that out of the monthly fee yes. Does the=20 > customer=20 > pay $19.95 at WalMart for the receiver if they also sign for a=20 > subscription to USDTV or do they get a refund from USDTV later? Does=20 > WalMart stock two receivers in cities where USDTV is active, one=20 > modified by USDTV and one for just non USDTV free to air programs? >=20 > >If the Hisense box were sold at retail today it would cost at least > >$300 in order to cover manufacturing, distribution, sales and=20 > >marketing costs. > > =20 > > > They are sold at retail now for $198.76 with no chance for any=20 > recoupment of a loss. If they want to buy market share in the=20 > US with a=20 > $100 loss per receiver and no major marketing blitz for their=20 > brand this=20 > would be crazy. Yes Hisense wants to own this space. They=20 > claim to have=20 > their cost more under control than everyone else. >=20 > >Regards > >Craig > > > >And don't forget the royalties. About half of the $67 cost for a STB > >is royalties, which do not get cheaper with volume or Moore's Law=20 > >driven cost reductions. > > >=20 >=20 > =20 > =20 > ---------------------------------------------------------------------- > You can UNSUBSCRIBE from the OpenDTV list in two ways: >=20 > - Using the UNSUBSCRIBE command in your user configuration=20 > settings at FreeLists.org=20 >=20 > - By sending a message to: opendtv-request@xxxxxxxxxxxxx with=20 > the word unsubscribe in the subject line. >=20 >=20 >=20 ---------------------------------------------------------------------- You can UNSUBSCRIBE from the OpenDTV list in two ways: - Using the UNSUBSCRIBE command in your user configuration settings at FreeLists.org - By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word unsubscribe in the subject line.