[opendtv] Re: Barriers eroding to LCD TV adoption

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Tue, 13 Jul 2004 08:06:44 -0400

At 10:08 AM -0400 7/12/04, Manfredi, Albert E wrote:
>Is this the argument that says you lose some on each item, but volume
>makes up for it?

No. It is an argument that says that when you make hundreds of 
thousands or millions of something, versus a few thousand, that the 
improved manufacturing efficiency, and volume component purchases 
will enable you to make the product cheaper...much cheaper.

>I don't understand your point. If that cheap TV you're talking about
>were built as two separate boxes, one tuner with audio and video
>jacks, and one monitor with video inputs and perhaps a built-in audio
>system, how much would it cost? Never mind if the audio system has
>to be another set of separate enclosures.

My point was that this set was "over stuffed" with connectors, which 
you seem to believe make the manufacturing cost much higher. I do not 
contest the notion that  - ALL THINGS BEING EQUAL - two boxes with 
connectors will cost more than one integrated unit. That is just 

BUT. All things ARE NOT equal. There are several considerations in play here.

1. The coupling of services with receivers optimized for those 
services. Separate receivers tend to help multi-channel distributors 
by reducing churn, and by differentiating their service from others 
based on the features of the boxes (receivers) that they offer. The 
cost of a STB to a multi-channel distributor is not viewed the same 
as when a consumer buys a component; they often subsidize boxes, and 
they almost always charge monthly fees for them. The truth is that in 
the long haul, these boxes are a profit center for most multi-channel 

2. We live in a world with both integrated products and component 
systems. Integration is critical for portability, but much less 
important for fixed installations. It is VERY COMMON for the biggest 
screen in the home to have a bunch of components connected; VCR, DVD 
player, cable or DBS boxes, component audio system, etc. So you can't 
leave off all of the connectors, even if the TV has one or more 
integrated receivers.

3. Consumers are not excited about buying stuff they don't need. 
Forcing the integration of receivers that will not be used can be a 
major negative. This is the reason that people are buying monitors 
instead of receivers - they can choose the right components 
(including receivers) for the system they want.

4. The problems with integration of components are beginning to 
disappear, as software controlled user interfaces become common. Thus 
it is now possible to offer the same levels of functionality as an 
integrated product...maybe even more. The CE guys are bringing up the 
rear in terms of the User Interface to  home entertainment systems. 
For example, it is very easy to build a music library and create 
playlists via a PC, while it is difficult to do this with most 
existing CE industry audio components.

Bottom line, this issue is NOT about economics, especially NOT about 
the cost of integration versus separate components. The issue is 
services, ease-of-use, and maintaining ongoing cash flows from 

>If you're saying that the $129 could not possibly have incorporated
>an ATSC front end today, I'd say sure. But it does incorporate an
>NTSC tuner, right? Who in his right mind would have insisted on
>keeping the NTSC front end as a separate box, if he were interested
>in producing a low-cost product?

We may learn about this soon. I expect that those "free" NTSC tuners 
are going to disappear from DTV monitors soon because of the FCC 
tuner requirements. This is not to say that cheap integrated sets 
like the one I described are going to go away any time soon; they 
will still be making them up to the day that the FCC requires an ATSC 
tuner in sets of that size. And then, as Mark keeps pointing out, 
there will be a big increase in the price of cheap sets

>The only hope of ever getting back to $129 TV sets with digital will
>be to package it in a similar way, *NOT* to create a product
>category that must only come as a high-end separates. We've been over
>this many many times. Hifi stereo separates are great, but that
>doesn't preclude the existence of cheaper all-in-one radios.

Sorry, but I don't buy this argument. Yes there will be integrated 
digital TV sets. But most people will buy monitors for fixed 

>And, I won't repeat myself, don't forget that the digital front
>end has to exist *somewhere*.

Exactly what is the digital "front end?"

This depends very much on the "network" to which a TV is connected. 
In a digital home, that front end may only need to be a NIC and the 
decoders needed to turn bits into audio and video. It is quite 
possible that the home will access bits from multiple networks (OTA, 
cable or DBS, Internet, etc.). So if an ATSC receiver is essential, 
perhaps a full Internet implementation with browser etc should also 
be integrated into every set...


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