[opendtv] Re: 20050810 Wolfsson's Wednesday Words (Mark's Monday Memo)

  • From: Eory Frank-p22212 <Frank.Eory@xxxxxxxxxxxxx>
  • To: "'opendtv@xxxxxxxxxxxxx'" <opendtv@xxxxxxxxxxxxx>
  • Date: Tue, 16 Aug 2005 13:16:15 -0700

Bert wrote:

>In any business, you go
>after the big demand. If manufacturer A is too greedy to
>do that, preferring instead to force the public to buy
>something they really had not intended to buy, the way
>the free market is supposed to work, manufacturer B who
>sells what the public wants will walk away with a tidy
>profit.

Case in point, the DTV tuner mandate. Except that manufacturer A isn't being 
too greedy -- it is the U.S. government that is trying to "force the public to 
buy something they really had not intended to buy." When mfr A sees how well 
mfr B is doing selling monitors with no tuners whatsoever, he will rapidly 
adjust his product design and remove the tuners. That's the way the free market 
works.

>In this example, though, for perhaps 5 years after analog
>shutdown, I would think stand-alone STBs would be a good
>seller. After that, as these older non-integrated sets
>die, they will be replaced by integrated sets.

The only sets that will be replaced by integrated sets are in the homes of the 
relatively few consumers who insist on having DTT reception capability. 
Everyone else will refuse to "buy something they really had not intended to 
buy."

> Buying
>separate monitors and STBs would be silly, since it
>would invariably cost more than the integrated set.

Except for the fact that consumers don't really "buy" STBs -- they either rent 
them (the cable MSO model) or pay a nominal fee for a heavily subsidized unit 
(the DBS model). Whether you count it as a true rental or a "purchase," it is 
still effectively a rental, just like cellphones. You will always get a new one 
with new features every 2 years either for free or for a heavily subsidized 
price, and your old unit will either be recycled or end up in a landfill.

The one thing consumers really want to own, and do not consider disposable, is 
the display. And it will be a long time before the price difference between a 
display and a display with integrated ATSC tuner/decoder is close enough to 
zero to not matter. Even if the retail delta today were only $50, that $50 
*does* matter to someone who understands he or she doesn't need and will never 
use those DTT reception features.

-- Frank
 
 
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