A lot of it is actually data collection (mass spying and surveillance) being used to harvest and sell vast quantities of data… and that subsidizes the price of the device.
Basically, if we make the devices cheaper and spy on every customer, it becomes more profitable to sell at a loss to get more customers to spy on. If they could spy on your eating habbits with food, food prices would also come down.
Also, black Friday is bullshit. The prices usually get artificially inflated ahead of time and the good deals usually have very little units in stock. Door busters for the first five customers or some bullshit.
More importantly though, if it stops being so profitable to harvest data, prices will go up quite a bit on anything used to collect it.
That’s your buying habbit. They’ve had that for a while now.
For TVs a single sale gets you a microphones for “voice features”, maybe a camera for web video chatting, and can take snapshots of your screen every X seconds to ID what content you are watching, and so much more.
That’s not really the only thing going on in tech. Sure TVs are a very competitive market where that is being done in part. But a vast majority of the price cut must be attributed to technological advancement.
I don’t disagree that manufacturing costs have gone down, but I question whether that or ads, data collection, and other new smart “features” have most contributed to the lowering price of TVs and other electronics. Note, the reporting referenced are over 5 years old… before AI really took off and the demand for every scrap of data became so profitable.
That’s bookkeeping magic. They are not talking about the cost of tvs and to consumers but their profit.
Their lower cost divisions such as ads and sponsorship can only operate for they sell tvs. I.e. their cost isnt reflected accurately.
They even talk about how the hardware section’s revenue is much, much greater. But when you got those bonus earnings you can undercut your competition ever so slightly or even sell at a minor loss in the manufacturing while still making a profit. But this barely matters to the price the consumer actually pays.
So you are saying that they are talking about profit and not revenue. Profit - the actual net gain the company gets and the sole reason businesses exist in a capitalist economy, and arguably the more important responsibility of a corporation to its shareholders…
Gross profit:
Source
2021
2020
Device
25.6
58.2
Platform+
57.3
30.6
To me, it looks like they are making more profit from the platform than from the TV sales themselves. To the point where they could, as you say, literally sell TVs at a loss, and still profit…but that barely matters when it comes to the price of the TV?
When the TV is on the modest end, I think that matters a whole lot. Bigger TVs don’t generate more platform+ revenue than small ones do.
They won’t be giving away 75" TVs or anything, but I think “platform” revenue has sizeable impact on why you can get absurdly cheap 27" flat panel TVs from Vizio and the like.
The issue with this calculus is that they would not turn a profit from the services if they stopped making tvs. This means dividing out these into separate accounts with separate costs is idiotic.
Profit numbers aren’t real. At least not when doing this.
So in order for it to be real, everything must be merged together into a single source of revenue/profit?
I am in no way confused as to whether or not they could make a profit without selling TVs - it says to me that the more TVs they sell, the more the platform can make. The platform becomes the profit generator and the cost and sale price of the TV hardware then becomes a line item in the platform profit calculation.
I’m not a business major but I don’t understand how separating the services and hardware that delivers the services into two measures invalidates my assertion that the services are the profit driving force and the hardware is secondary to that. With the hardware being secondary, keeping its price low or at a loss makes economic sense if the platform generates that much more profit.
I’m arguing such logic has driven down the prices. What are you actually asserting that is relevant to my point?
Arguing for cost of production vs cost of service offerings in a vacuum is the issue since. And trying to argue that they make their profit just in ads and services is the thing you shouldn’t do, as they do not add the TV cost they “subsidize” to their cost. Since profits are very slim any small source of income with low cost suddenly becomes the source of profit if you fudge the math this way. Imagine that they would sell remotes separately at high cost compared to the materials cost e.g. for 20 bucks. Then they could reduce the TV price by 20/buyrate dollars, lowering TV profits but have a high margin item they can tout to investors. Even though almost nothing changed they reduced their tv manufacturing profits without changing their total profits.
I understand what you are saying. If they reduce the price of their TV (and the profit that TVs sales generate) they are just removing the profit from one category into another.
I honestly don’t have enough energy to write a better researched response - I spent more time than I wanted trying to find any numbers as it is.
If you want to believe that the gigabytes of data your TVs regularly send to their manufacturers and their business partners aren’t a primary driver of lower prices… and that it is really because it has become markedly cheaper to mine precious metals and manufacture semiconductors than it has to run factory farms, then go ahead.
A lot of it is actually data collection (mass spying and surveillance) being used to harvest and sell vast quantities of data… and that subsidizes the price of the device.
https://www.rtings.com/tv/learn/research/smart-tv-data-privacy
Basically, if we make the devices cheaper and spy on every customer, it becomes more profitable to sell at a loss to get more customers to spy on. If they could spy on your eating habbits with food, food prices would also come down.
Also, black Friday is bullshit. The prices usually get artificially inflated ahead of time and the good deals usually have very little units in stock. Door busters for the first five customers or some bullshit.
More importantly though, if it stops being so profitable to harvest data, prices will go up quite a bit on anything used to collect it.
They kind of do this with your “rewards card” or “club card” though.
That’s your buying habbit. They’ve had that for a while now.
For TVs a single sale gets you a microphones for “voice features”, maybe a camera for web video chatting, and can take snapshots of your screen every X seconds to ID what content you are watching, and so much more.
Also with everything that used to be a proof of purchase that now requires a scan of your receipt, box tops for education for instance.
Maybe. But the tech is getting cheaper to produce. Monitors are very cheap, and they aren’t part of this business model.
While I technically agree, they are trying…
https://cybersecuritynews.com/lg-monitor-app-installs-adware/
That’s not really the only thing going on in tech. Sure TVs are a very competitive market where that is being done in part. But a vast majority of the price cut must be attributed to technological advancement.
I don’t disagree that manufacturing costs have gone down, but I question whether that or ads, data collection, and other new smart “features” have most contributed to the lowering price of TVs and other electronics. Note, the reporting referenced are over 5 years old… before AI really took off and the demand for every scrap of data became so profitable.
https://www.howtogeek.com/767919/tv-manufacturers-make-more-from-ads-than-selling-tvs/
That’s bookkeeping magic. They are not talking about the cost of tvs and to consumers but their profit.
Their lower cost divisions such as ads and sponsorship can only operate for they sell tvs. I.e. their cost isnt reflected accurately.
They even talk about how the hardware section’s revenue is much, much greater. But when you got those bonus earnings you can undercut your competition ever so slightly or even sell at a minor loss in the manufacturing while still making a profit. But this barely matters to the price the consumer actually pays.
So you are saying that they are talking about profit and not revenue. Profit - the actual net gain the company gets and the sole reason businesses exist in a capitalist economy, and arguably the more important responsibility of a corporation to its shareholders…
Gross profit:
To me, it looks like they are making more profit from the platform than from the TV sales themselves. To the point where they could, as you say, literally sell TVs at a loss, and still profit…but that barely matters when it comes to the price of the TV?
When the TV is on the modest end, I think that matters a whole lot. Bigger TVs don’t generate more platform+ revenue than small ones do.
They won’t be giving away 75" TVs or anything, but I think “platform” revenue has sizeable impact on why you can get absurdly cheap 27" flat panel TVs from Vizio and the like.
The issue with this calculus is that they would not turn a profit from the services if they stopped making tvs. This means dividing out these into separate accounts with separate costs is idiotic.
Profit numbers aren’t real. At least not when doing this.
So in order for it to be real, everything must be merged together into a single source of revenue/profit?
I am in no way confused as to whether or not they could make a profit without selling TVs - it says to me that the more TVs they sell, the more the platform can make. The platform becomes the profit generator and the cost and sale price of the TV hardware then becomes a line item in the platform profit calculation.
I’m not a business major but I don’t understand how separating the services and hardware that delivers the services into two measures invalidates my assertion that the services are the profit driving force and the hardware is secondary to that. With the hardware being secondary, keeping its price low or at a loss makes economic sense if the platform generates that much more profit.
I’m arguing such logic has driven down the prices. What are you actually asserting that is relevant to my point?
Arguing for cost of production vs cost of service offerings in a vacuum is the issue since. And trying to argue that they make their profit just in ads and services is the thing you shouldn’t do, as they do not add the TV cost they “subsidize” to their cost. Since profits are very slim any small source of income with low cost suddenly becomes the source of profit if you fudge the math this way. Imagine that they would sell remotes separately at high cost compared to the materials cost e.g. for 20 bucks. Then they could reduce the TV price by 20/buyrate dollars, lowering TV profits but have a high margin item they can tout to investors. Even though almost nothing changed they reduced their tv manufacturing profits without changing their total profits.
I understand what you are saying. If they reduce the price of their TV (and the profit that TVs sales generate) they are just removing the profit from one category into another.
I honestly don’t have enough energy to write a better researched response - I spent more time than I wanted trying to find any numbers as it is.
If you want to believe that the gigabytes of data your TVs regularly send to their manufacturers and their business partners aren’t a primary driver of lower prices… and that it is really because it has become markedly cheaper to mine precious metals and manufacture semiconductors than it has to run factory farms, then go ahead.