[opendtv] Re: Barriers eroding to LCD TV adoption

  • From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
  • To: <opendtv@xxxxxxxxxxxxx>
  • Date: Sun, 11 Jul 2004 18:05:33 -0400

Craig Birkmaier wrote:

> >The clearance price of obsolete ATSC boxes last Christmas
> was probably
> >$199, since that was what we saw at Circuit City. New boxes were
> >$299 on up. But these things are changing fast, *and* those prices
> >belonged to stand-alone boxes, which command a 2:1 premium at least
> >over the built-in variety.
> If things are changing so fast, why is it still nearly impossible to
> find stand-alone ATSC receivers?

The delay of NTSC shutoff beyond 2006 will not help. I agree with you
about this aspect of the so-called transition, by the way. Seems silly
to pretend there's any sort of "transition" going on when most stores
continue to sell NTSC-only boxes, be they TVs or recording devices.

> And what's with this 2:1 premium for
> a standalone box versus integration. The case and power supply are
> not 50% of the cost of these boxes...nowhere near.

I said *at least*. There's a big premium in making boxes stand-alone,
which includes power supply, connectors, switches, the case,
inventory and shipping costs, separate safety tests, and so forth.

By the way, notice from one of Monty's recent posts that the cost of
incorporating the Wi-Fi receiver in a PC in the early days of Wi-Fi
was ... "under $100." Sound familiar?

> The reality is
> that the STB approach is probably cheaper today because of the huge
> manufacturing volumes versus integrated receivers. There are more
> than 40 MILLION digital STBs in use in the U.S. that support SDTV.
> There are perhaps another million that are HD/ATSC capable. There are
> at best, a few hundred thousand integrated receivers.

The actual reality is that no one seems to get the whole picture about
receiver costs. You're comparing apples and snails.

The front end has to exist no matter what. If we accept that a digital
transition for cable and OTA is to happen, you either locate those
digital receivers in:

1. A separate unique box, i.e. and STB. This can be customer-purchased
or rented from a service provider, and is inconvenient as all getout.
And it *costs*, even if the cost is folded into a high monthly bill.

2. A separate box with multiple receivers, to try and make the system
somewhat more sensible and user friendly. Guess what? The price of
this box will be high, but less high than having individual
stand-alone receivers. And convenience is slightly better too.

3. Place two or more receivers in a recording device. Guess what?
That's the same as built-in receivers in any other appliance, e.g.
the TV itself. And once again, the marginal cost of the extra
receivers will be less than having a bunch of stand-alone STBs, and
the system will be a lot more sensible for interconnecting as well,
especially for those who've managed to decipher the mysteries of
TV program recording.

4. Place receivers in every appliance. This will result in savings
because the receivers are built-in, as well as savings because
you'll only buy the number of receivers you really need. But
fundamentally, this is identical to #3, in terms of total cost
to the consumer, or even cheaper.

As to marginal cost of adding ATSC to an existing DBS or digital
cable receiver? Evidently, not very high, and certainly would be
expected to drop in short order. I'll bet you it's going to be
mostly all the rigmarole about digital copy protection that keeps
these costs high at first, and that affects any of the digital

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