You can scratch off another “premium” feature that no longer carries a premium price. According to the company’s press release, Westinghouse Digital has announced that it is shipping LCD HDTVs with LED backlights at prices that challenge the traditionally less-expensive cold-cathode fluorescent lamp (CCFL) backlight designs. Its 40″ LD-4070Z is on sale online now at Walmart for $439.99; that’s at least 40% less than LED-backlit models from the major manufacturers. Westinghouse also has a 46″ LD-4655 that is currently on sale for $599.99 at Best Buy. That’s less than the price of a 42″ LED backlit model from most brands.
The accelerated life cycle and cut-throat pricing in the flat panel TV market now force manufacturers to migrate new features throughout their entire product line faster than ever. We’re seeing that with LED backlights and 120 Hz refresh rates. It’s already starting to happen with Internet connectivity and stereoscopic 3D support. The bottom line is that you don’t have to wait long for a new, desirable feature to get folded into the list of standard features that you can expect to find on all but the most stripped-down entry-level models.
I suspect that it’s a whole lot more fun to be the consumer and not the manufacturer in this market.
“Demand in many developed countries continues to be very soft” so analysts at DisplaySearch have lowered their forecasts for the total worldwide television shipments for this year. The new figure is 252 million units, which is down 3% from the previous estimate. Three percent doesn’t sound like much until you realize that represents more than 7 million sets with a total value that is probably more than a few billion dollars.
Consumers in North America, Europe, and Japan have already replaced many of their older picture tube (CRT) televisions with new flat screen models, so with the slow economic recovery, they are less inclined to purchase a new TV. While growth is expected to be just about flat in the developed countries, the emerging markets of China, Latin America, and India are expected to post a healthy 6% growth in unit shipments over last year.
DisplaySearch also predicts that LCD technology will continue to dominate with an 84% share of the market. Its share will continue to grow, largely at the expense of the CRT share, though plasma’s share will continue to decline slowly from its current 7%.
What does this mean for you? Expect prices to decline this fall as manufacturers try to grab as much of the stagnant market as possible. There may be some bargains to be had among the plasma models — especially in the 50″ to 55″ sizes — but chances are good that you’ll be buying an LCD model.
In-Stat has released results of a new survey that indicates connected TVs are being put to use. The company estimates that about 60% of households with a connected TV use a TV app at least once per week. Netflix and YouTube are the leading choices and Keith Nissen, Research Director, says “TV apps will become part of the mainstream TV viewing experience.” The survey also estimates that 22% of U.S. households with broadband service now have an HDTV with integrated apps that connect to the Internet.
This penetration rate is only going to increase, as connected TV features will migrate throughout the product lines of the major manufacturers, and it will soon be difficult to find an HDTV that doesn’t have a network connection. Broadband Internet penetration is already high, so these homes will be ready to connect to online streaming content. I have to agree with In-Stats analysis that we’re going to see rapid growth in online video as a percentage of U.S. consumer viewing habits.
According to a press release from the American Television Alliance, the FCC approved the sale of the ABC affiliate in Topeka, Kansas, to Parkin Broadcasting Company. The problem is that two other major network stations in that market — NBC and Fox affiliates — are owned by a single company, New Vision Television. And New Vision has shared service agreements already in place with Parkin in two other markets: Youngstown, Ohio and Savannah, Georgia. This means that the two companies control three of the major networks in Topeka, and are in a position to put the five local cable companies over a barrel when it comes time to negotiate retransmission licenses. Under the current system, Topeka cable subscribers could lose all three networks in the event of a dispute.
This turn of events just adds to the growing pressure for change to the retransmission rules. Consumers are being held hostage, and the number of incidents of channel blackouts is growing.
From the Who Ever Would Have Guessed It Department, the Consumer Electronics Association (CEA) has come out with a report detailing the “materials footprint” of televisions and computer monitors from 2004 through 2011. In comparing televisions in the 13″ to 36″ size range, the group determined that flat panel LCD TVs weigh 82% less than CRT (picture tube) models, and take up 75% less space.
That’s hardly surprising. The fact is that few of those 13″ CRT models have been replaced with 13″ flat panels, however. Maybe the larger flat panels balance out the gains. This is where the report has some interesting results; today’s 40″ to 70″ flat panels still weigh about 34% less than those smaller picture tube sets. The bottom line is that in spite of the much bigger screens, our televisions consume far less in materials. Not only does this reduce the impact of manufacturing the products, but it also reduces the energy costs required to move them around the world. We’ll still have to deal with the CRTs moving through the waste stream — hopefully being recycled — but as they reach their end of life, we can expect the overall amount of electronic waste to decline, according to the report.
So there is a case to be made that the larger flat panel that replaces your old picture tube set will be easier on the environment overall.
Earlier this year, the U.S. Ninth Circuit Court threw out a class action antitrust lawsuit (Brantley v. NBC Universal) that held that bundling of cable channels unfairly forces consumers to pay for programming that they don’t want. The ruling stated that while consumers may be damaged by the practice, there is not evidence that competition suffers (which is the basis for an antitrust suit). Now a bunch of groups — including the Parents Television Council, the Consumer Federation of America, and the American Antitrust Institute — have filed briefs requesting that the Court reconsider the dismissal. There’s no indication whether or not they will be successful in resurrecting the lawsuit.
It is interesting that the groups are attacking subscription bundles based on antitrust reasons; cable companies were given monopolies initially to encourage them to take on the expense of an infrastructure build-out. It’s not at all clear how much you would save with a la carte pricing in any case; if the cable companies split out the management and maintenance costs as a baseline expense, the actual amount paid for many of the unwanted channels might not save much. On the other hand, if many subscribers chose to get just a few of the more expensive channels, the loss of revenue to the cable companies might be devastating.
The other part that I find interesting is that there are not many ways for consumers to “vote with their wallets” in this situation. It’s a take-it-0r-leave-it situation for most people, with the only alternative being just over-the-air broadcasts. The rapid uptake of broadband and online streaming of video appears to be offering an alternative for some, and that may eventually be the wedge that helps break up the bundles.
If you haven’t heard about Zediva yet, you may want to check it out quickly. Like iviTV and FilmOn, this company thinks that it has figured out a way to game the system to provide video content over the Internet. Where iviTV and FilmOn provided broadcast television programming, however, Zediva is renting DVD movies.
The wrinkle on the service is that you actually rent the physical DVD, just as if you were going to a Blockbuster store. You don’t ever get the DVD, however; the rental price includes the use of a DVD player in a Zediva server farm. The physical disc is put in a physical drive that is dedicated to sending you the content over the Internet. Rentals cost between $1 and $2, depending on how many rental credits you buy at a time, which you can purchase using PayPal. You have 14 days to watch the movie once you’ve rented it. And based on the company’s website, you can choose from the most current and popular DVD releases. The service only offers DVDs at this point; high-definition Blu-ray is not yet supported.
As you might imagine, not everyone is happy with this arrangement. The Motion Picture Association of America (MPAA) has asked a California district court for an injunction against the service, pending the outcome of a copyright lawsuit. The MPAA claims that Zediva is streaming the content without a license. In an interesting development, Cablevision has filed a brief with the court that supports the MPAA position. This is a tad ironic, since Cablevision was sued for copyright violations when it created a digital video recording (DVR) service for its customers that stored and streamed the recorded programming from its own servers.
The hearing on the injunction request is scheduled for July 25, so you may not have much time to check out Zediva if things don’t go its way in court.
If you’re a Hulu fan, you have probably noticed the conspicuous absence of any current CBS shows. It’s not too surprising, given that the owners of major rivals ABC (Walt Disney Co.), NBC (Comcast), and FOX (News Corp.) are Hulu’s owners. Now comes word that CBS has signed a deal with Amazon to offer about 2,000 full-length episodes to subscribers of Amazon’s Prime service. Amazon Prime is primarily a VIP customer service, with free two-day shipping on all eligible orders in return for a $79 per year subscription fee. As a fringe benefit, however, you get free access to Amazon’s library of streaming content.
If you consider the fee as paying just for the video, however, it is just $6.59 a month which is nearly $1.50 less than the $7.99 charged by Netflix. Netflix does have a larger library, listed at about 20,000 compared with Amazon’s 8,000 titles, but this latest deal indicates that Amazon is looking to become a serious player in this market. Adding the CBS content could be a big step in that direction.
Amazon’s deal with CBS is non-exclusive, which means that you could also see the same content appear on other services. If the sale of Hulu goes through, that could help make CBS more willing to license its content there as well. The new buyers may have enough cash to make that an attractive possibility.
New wine in a new bottle, already. Mobile DTV was the name for the broadcast television for mobile devices that has started to roll out in markets across the country. There aren’t many devices available yet that can receive these signals, but the industry hopes that it will be supported by a wide range of devices from smartphones to tablets. And now to make it easier for consumers to recognize which products support this service, the Mobile Content Venture (MVC) has announced the new “Dyle” brand.
Efforts by the MVC and the overlapping Open Mobile Video Coalition (OMVC) have announced lots of stations nationwide that are now or will soon start broadcasting mobile television signals. It still remains to be seen whether or not there will be any significant consumer demand for this service. Mobile television is one of the key applications that local broadcasters cite for wanting to retain the full assigned radio spectrum for their television channels. On the other side, the FCC and the federal government believe that some of this spectrum could be put to better use, including wireless broadband services. The sale of the underused spectrum could bring in billions of dollars for the government and for the stations that surrender a portion of their allocation.
The display market research firm DisplaySearch has released its latest “Quarterly TV Design and Features Report” for Q2’11, in which the company points out the energy-savings advantages of LED backlights for LCD HDTVs. An analysis of 40″ LCD TVs shows that consumers will save money over the life of the television set in spite of paying more for a model with an LED backlight.
For the average U.S. consumer, the payback period is just over five years. In spite of recent trends toward shorter replacement cycles, I expect that a 40″ set purchased today is likely to still be in use ten years from now, so it looks as though the extra cost for an LED backlight is worth it in the long run. (I also expect that energy costs are likely to rise, which presumably makes the analysis even more favorable for the LED model.) Higher energy costs reduce the payback estimate; DisplaySearch puts it at under four years for California consumers, and less than two years for consumers in Western Europe.
If you’re looking for a practical reason to justify going with a more expensive LED backlit model, this may be what you need. On the other hand, the energy savings advantage may soon be moot. DisplaySearch expects LED backlights to outnumber CCFL backlights two to one next year, with CCFL disappearing almost completely by 2015. So you won’t have to struggle with the choice much longer.