Harry, the same thing seems to happen with a lot of other things we are conned into buying. The point you seem to be missing is the conning part. What was so wrong with VHS, or simply going to the movies?
It's not a free market. It's all about strategic selling. Initially, you sell a "gotta have" product at the highest possible price and then bring the price down as the market fills up. And, yes indeed, competition enters into it, but the initial step is to manipulate consumers into buying something they may not really need but are persuaded to want. We have an incredible capacity for turning out gadgetry, and a corresponding capacity, perhaps even larger, to make us feel we need it - i.e., for making our wants infinite. Another strategy is to divide the market into little pieces, and market products to the exclusive few who can afford them. There's an ad aimed at "the select few" in today's paper marketing a car that will soon come "to a left lane of you", meaning that it will pass you at a high speed. Of course, it has other desirable features such as a very powerful engine and a very high price. Those of us who look at cars as appliances, much like stoves and fridges, can only wonder, and perhaps yearn a little. So, to repeat, it's not a free market, it's highly manipulated. Ever so much of it depends on having to have the latest this or the latest that, or feeling that you are making everybody envious because you have something they can't afford. Ed Ed Weick 577 Melbourne Ave. Ottawa, ON, K2A 1W7 Canada Phone (613) 728 4630 Fax (613) 728 9382 > 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 > _______________________________________________ Futurework mailing list [EMAIL PROTECTED] http://scribe.uwaterloo.ca/mailman/listinfo/futurework
