Harry, I would have been very wrong if I'd forecasted DVD sales a year ago. I would have said that sales would be low because people are fed up with so much gadgetry.
But I would have been wrong. I would have been introjecting the feelings of someone who is pretty well a computerphobe and has only just cottoned on to CDs! If there'd only been a free market in this country (even "relatively" free) for X-ray scanners and MRS machines (and a free market for radiographers), then a great many people would still be alive today. Keith At 01:07 07/01/03 -0800, you wrote: >Keith, > >You will be interested in this - a (relatively) free market at work. In an >LA Times story, a graph shows that in the last five years, DVD players have >increased in sales from about 350,000 to 20,100,000. > >Their prices have dropped from $491 to $132. > >I can get one from a reputable manufacturer for as low as $49. > >Instead of cursing corporate darkness, perhaps we should light a free >market candle! > >Here is the story. > >Harry > >---------------------------------------------------------------------------- > >Los Angeles Times - latimes.com > >SUCCESS OF DVD PLAYERS PROVES A MIXED BLESSING > >By Jon Healey, Times Staff Writer > >No product has been as bittersweet for the consumer electronics industry as >the DVD player. > >Drawn to the sharp pictures and cinematic sound, consumers have bought up >DVD players faster than any other electronic device in history. Even though >the players became widely available in the United States only 5 1/2 years >ago, more than 46 million homes now have one attached to a TV or a computer >monitor. > >But sales have skyrocketed in large part because prices have plummeted. In >turn, so have manufacturers' profits. As no-name, no-frills brands have >flooded stores, the Japanese and European electronics giants that invented >DVD have watched their profit margins get squeezed in record time. > >Retailers' profits have mostly evaporated, too, as the average price of a >DVD player has fallen from $491 in 1997 to an estimated $118 today, >according to NPD Intelect, a research firm. Entry-level units sell for $59 >or less. > >"The joke is you're going to get a free DVD player with the purchase of a >DVD [movie] pretty soon," said Noah Herschman, vice president for video at >Tweeter Home Entertainment Group of Canton, Mass. > >"You can buy a DVD player that has a laser and all sorts of advanced >technology ... for less money than it costs to buy a necktie," he added. >"It doesn't make any sense." > >Even worse for consumer electronics makers and retailers, the DVD >experience may be a harbinger of things to come. Competition at the >market's low end is intensifying for all sorts of digital gear, fueled in >part by low-wage assembly plants sprouting up across China. > >Faced with this difficult situation, many manufacturers and merchants hope >to widen their profit margins again by enticing consumers to buy something >more than just a budget DVD player. > >"You survive by making new technologies," explained Andy Parsons, a senior >vice president at Pioneer Electronics Inc. in Long Beach. > >One area with potential is DVD recorders. Mike Mohan, director of >audio-video merchandising for Good Guys Inc. of Alameda, predicts that more >DVD recorders than players will be on the market within two years. And he >expects them to sell for $200 to $300 per unit. > >Meanwhile, at the International Consumer Electronics Show this week in Las >Vegas, an array of more expensive DVD machines will be on display. Among >their features: > >* High definition: At least two companies -- Samsung Electronics Co. and >Philips Electronics -- plan to introduce DVD players this year that convert >standard DVD movies into simulated high-definition pictures when viewed on >an HDTV set. > >Next year, the first DVD players capable of playing true high-definition >discs are expected to arrive. But manufacturers have split into two camps >that are backing incompatible high-definition formats, potentially slowing >the emergence of the new generation of discs. > >* Hard-drive recording: Several manufacturers, including Toshiba Corp. and >Apex Digital Inc., have or soon will offer DVD recorders with built-in hard >drives for temporarily storing programs. And Thomson, which makes RCA >products, has two types of hard-drive-equipped DVD players in the works: >one for recording TV, the other for storing music in a digital jukebox. The >latter also will play radio stations from the Internet. > >* Home networking: Sonicblue Inc. plans to introduce a DVD player soon that >can connect to a home network. The device lets consumers move digital music >and movies from their computers or the Internet to their stereos and TV sets. > >Herschman of Tweeter Home Entertainment, a retailer that caters to a >high-end clientele, said gadget lovers and videophiles are willing to pay a >premium for DVD players that offer extra features or boast superior picture >quality. > >So far, however, most consumers have resisted paying more for such >enhancements. And low-cost manufacturers already are setting their sights >on DVD recorders, threatening to slash prices and profit margins in that >arena as well. > >Fierce competition has long been a hallmark of the consumer electronics >market. Prices have dropped over time in virtually every product category. >According to some industry executives, though, DVD players have taken that >trend to an extreme, with prices falling faster and further than ever before. > >In many cases, DVD technology has been reduced to an add-on in other >products, such as TV sets and digital video recorders. "Probably quicker >than we wanted to, we've been pushed into making DVD a feature of other >things," said David H. Arland, director of government and public relations >for Thomson. > >It wasn't supposed to be like this. > >Sony Corp., Pioneer and Thomson were three of the nine consumer electronics >companies that developed the DVD format in 1995 with Time Warner. Sales of >TV-oriented DVD players took off, hitting 1 million in the first year of >widespread availability. > >"It was the savior of the industry," said Claude Frank, director of >audio-video product marketing for Samsung Electronics America Inc. >"Everyone was touting how great it was, that it would bring profitability >back." > >Instead, the high-priced players lured new manufacturers into the fray, >many of them setting slim profit margins for the sake of high volume. These >companies typically bought components from independent suppliers and even >their competitors. > >And with so much of a DVD player based on industry standards, the upstarts >could build models that were hard to differentiate from the established >firms' basic offerings, said Sharon Taylor, a video product manager for >Santa Clara, Calif.-based Sonicblue. > >Take, for instance, Apex Digital of Ontario. Using low-cost Chinese >factories and lean operations, it was able to grab chunks of the DVD market >with players priced far below those of its bigger rivals. > >Yet Apex hasn't been solely a cheap provider. Its devices also caught the >attention of music-loving gadget freaks by playing homemade CDs with tunes >downloaded from the Internet. As a result, noted Apex spokesman Colton >Manley, electronics chain Circuit City Stores couldn't keep the Apex >players on the shelves. > >The company's low-margin, high-volume strategy has worked: Since November >2001, Apex has sold more DVD players than any other firm, Manley said. > >Many retailers have tried to use the Apex players and other low-price >entries as "loss leaders" -- a way to draw people into stores, in the hopes >of selling them either a more expensive DVD player or a bunch of DVD >movies. The movies have sold well, but the souped-up DVD players haven't. > >Frank, the Samsung executive, said he recently discussed the situation with >a regional consumer electronics dealer known for selling higher-end gear. > >"The gentleman referred to the product as 'a sewer of a category.' That's >how it's progressed in five years -- from a savior of the industry to a >sewer of a category." > > >****************************** >Harry Pollard >Henry George School of LA >Box 655 >Tujunga CA 91042 >[EMAIL PROTECTED] >Tel: (818) 352-4141 >Fax: (818) 353-2242 >******************************* > > >--- >Outgoing mail is certified Virus Free. >Checked by AVG anti-virus system (http://www.grisoft.com). >Version: 6.0.434 / Virus Database: 243 - Release Date: 12/25/2002 > ---------------------------------------------------------------------------- -------------- Keith Hudson,6 Upper Camden Place, Bath BA1 5HX, England Tel:01225 312622/444881; Fax:01225 447727; E-mail: [EMAIL PROTECTED] ________________________________________________________________________ _______________________________________________ Futurework mailing list [EMAIL PROTECTED] http://scribe.uwaterloo.ca/mailman/listinfo/futurework
