Why TVs have fallen in price by 97% in recent years. And why should you be afraid of it

Hornbeam

10 min

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You may not have noticed, but something has been going on with TVs lately.

Thirty years ago, television was almost a luxury item. And not only in the countries of the former USSR. Even in America they sold for at least $800 in color and tube (that's about $2,500 today, adjusted for inflation). Families have been using the same TV for generations. It was kept by many longer than the car.

But now there is some interesting story happening with TVs. Like many other devices, they have become much better and more technologically advanced over the past decades. But while, say, new cars cost about the same as they did 10 years ago, and new smartphones even go up in price, TVs have become orders of magnitude (!) cheaper. That, it would seem, contradicts elementary logic.

The Samsung E8000 is said to be the best TV of 2012. Now it's a thing of the past

For example, in Reviewed.com's list of the best TVs of 2012, several $2,199 51-inch 1080p plasma TVs were recommended as a fairly budget option. And now on the Internet in a second you can find (with VPN) a 55-inch TV with a much higher 4K resolution for $ 350 - on the same BestBuy or Target sites. There are even options for $249, with "discounts". Sorry, but this is cheaper than some headphones or electronic watches.

An even more radical example: 85-inch 4K displays, which cost about $40,000 in 2013 (yes, $40,000, more expensive than a car). Now in American networks they are sold with "discounts" for $ 1,300. Thirty times cheaper! Although, it would seem, the materials inside them have not become smaller over these ten years ... What is it all about?

The cheapest product of the century

Of course, everything is fleeting in Russia, and it is difficult to understand the situation at ruble prices. But there are countries in which all data is saved. Take, for example, this " century chart " from the American Enterprise Institute. They annually check the dynamics of real prices for various goods and services. Most goods, such as food and medicine, have increased in price by 80-200% since 2000. Which is logical. But at the same time, TVs have fallen in price by 97 percent ! This is more than any other product in the world, by a noticeable margin.

Centenary chart

Why are they so cheap now? Twenty to thirty times even compared to what it was 10 years ago!

At first glance, this seems illogical. The buyer now has the choice of buying a small 11-inch iPad Pro for $800 and then using it to watch YouTube or Netflix in bed. Or pay less and get a huge 70-inch 4K TV that is 40 times bigger and costs the same. And also watch Netflix or YouTube from it. Despite the fact that this TV also has a browser, there are games, there is an application store, there is access to the Internet and, in general, almost all the functions of a standard tablet. Only the screen is 40 times larger, and it costs less.

Is there less content on TV? In theory, no: the same boards, a large LED panel, a power supply, a case. Of course, more bulky components can be used here, but still, physically much more material is needed. And how much is spent on the production of such a colossus, on its careful transportation, storage, delivery to the buyer ...

What could be the reason for such low prices, do you think?

The first reason is you

One of the major improvements in recent years is simply a large piece of glass. TV panels are now cut from a very large flat sheet called "mother glass". These pieces are huge, about 3.3 x 3 meters, and manufacturers have learned how to cut this large piece into separate screens more efficiently. Ten years ago, there was a lot of waste, and now more TV screens are coming out of the same original glass. Other components are also made faster and with less waste. These (and similar) improvements can be thought of as Moore's law for televisions. Over time, companies producing components improve the manufacturing process, which significantly reduces costs.

Of course, these improvements apply to most gadgets. But the TV market has another factor that sets it apart from the rest: massive competition. Unlike the smartphone market, which is dominated by a few big companies, low display prices allow more manufacturers, including start-ups, to enter the TV market. They just need to buy a display, build a case, and download streaming software.

Newer companies such as TCL and Hisense have over the past five years taken a large share of the market from more established brands like LG and Sony, forcing them to cut prices (Hisense is now generally the second manufacturer in the world in terms of the number of TVs sold after Samsung). New companies enter this market regularly because they do not need the most advanced technologies: flexible screens, touchscreens and 8nm processes. Fierce competition forces everyone to reduce margins. Getting $ 600 in net profit from each smartphone, like Apple, will not work here.

It used to be like this...

And, of course, there is the main "open secret". Which is actually the main factor in reducing the price of TVs. It consists in the fact that data trading from smart devices is gaining momentum. And the sharp drop in price coincides with the rise in popularity of smart TVs.

When you watch TV, the TV is actually watching you. It watches what you do and what you love, keeps track of your habits, and the manufacturer makes a good profit from the data it collects. The TV acts as a website that monitors the user who has logged into it. Moreover, the website is unique in its kind, and therefore even more valuable.

The most widely used media platform, Roku, is built into TVs from companies such as TCL, Hisense, Philips, and RCA. But there are many such OSes: there is Google TV, which is also used by Sony, LG and Samsung have their own developments. All of them are similar to social networks or mail services in that they provide us with their free services in exchange for following what we do with them and what we are interested in. And then they sell that information to advertisers, insurance companies, banks, or any other company willing to pay for it.

This is a new stream of income that did not exist just 10-15 years ago.

Everyone knows about this "secret". Data tracking companies like Inscape and Samba proudly show off on their websites the TV manufacturers they partner with and the data they collect.

And it turns out that it is important for TVs (or rather, the platforms built into them) to gain a large user base. They are now working as startups, investing in getting as many people as possible on their platform. Even if the TV is sold at a loss, then, over time, this difference can be made up.

Working at a loss

TV companies call this scheme "monetization after purchase." They sell TVs at roughly cost — and then make money off them in the long run by sharing data about what people are watching. Also, ads are often sold in the interface. Roku, for example, shows a TV show or a certain stream on the right side of the home screen, which is paid advertising that the providers of that content pay for. Roku also has its own channel, the Roku Channel , which is always available on TVs with their Smart platform, and which also regularly plays video ads purchased from Roku.

All this brings in a lot of money. For example, in 2021, Roku made $2.7 billion according to their report . And 83% of that amount came from what they call “platform revenue.” That is, for the sale of data and advertising displayed in the interface. And Roku isn't the only company to offer such software: Google, Amazon, LG, and Samsung have their own Smart TV OSes with a similar revenue model. All this is a market for tens of billions of dollars.

Now 4K surprises no one

Whatever you watch on your smart TV, algorithms keep track of your habits. This then affects the ads you see on your TV. And if you connect your Google account to the Smart TV platform for convenience, it will also affect the ads you see when browsing on your computer or smartphone.

In a way, your TV is now no different from a Naggram chronicle or a TikTok recommendation. Here, too, algorithms are at the forefront, and they also monitor your preferences.

Well, at least in the case of TVs, we get a reduction in their price. Unfortunately, it doesn't always work that way.

smarter devices

Anything can collect data these days: a thermostat, a light bulb, a coffee maker, a doorbell, an air conditioner, or a refrigerator. And in fact, they produce significantly more data than you might think. And a huge number of people can access this data if they want to.

For example, there are already people who work in the field of IoT forensics . This is a separate profession: they, in fact, hack devices to find clues to crimes in them. Smart home devices are increasingly becoming part of court cases. They hold secrets that may not be visible to the naked eye and that criminals often forget to eliminate. Knowing when someone turned off the lights, made coffee, or turned on the TV can play a key role in an investigation.

Take, for example, a typical modern Samsung refrigerator. VTO ​​Labs , one of the digital forensics labs in the US, found out for tests how much information a smart refrigerator stores about its owners. They took ordinary refrigerators and found information about Bluetooth devices that passed near it, Samsung user account data (email addresses, passwords, registration date), temperature and geolocation data, and hourly energy usage statistics. It became clear to them who lived here (names, addresses), who passed nearby, how often people are at home and what other equipment they often use.

The refrigerator stored data about when the user played music through the iHeartRadio app and what music they listened to. In some models, it was possible to access photographs of what was located on the shelves of the refrigerator - due to small cameras built inside. It also provided insight into the dietary habits of the device's owners and the amount of time they spent at home.

And the refrigerator can store many times more data if the user connects it to other Samsung devices through a personal or shared family account. Many of these devices also store a significant amount of information about their owners.

The problem with storing and accessing this data will only grow as we fill our homes with more and more things that connect to the Internet. Smart TVs collect everything about the viewers sitting on the couch. Refrigerators record what kind of food we like to put in them. And rumba vacuum cleaners, as we recently learned, photograph their residents naked or in the toilet. And then they send this data to the Philippines and Venezuela, where freelancers process it for a few cents an hour. And sometimes they share these private photos on their work forums.

Photos from the iRobot Roomba J7 series, which no one agreed to

For individual users, this is a nightmare. Loss of the last vestiges of privacy. But all this data is very valuable for brokers and is becoming part of a new industry. For example, if there is a bed that tracks your sleep and heart rate, brokers can combine this information with other information (for example, from a refrigerator or a fitness tracker) and sell it to an insurance company. Which will understand which of her clients has more health problems, who sleeps worse, who has sleep apnea, who has pre-heart attacks in their sleep. This will save her billions of dollars by not issuing life insurance to those who may appear healthy but are actually barely breathing at night.

The more technology enters our lives, the more data devices collect about us, the more we lose the ability to have any control over where they go, where they accumulate, who gets their hands on them and what they then do with them. But it sometimes makes our devices (substantially) cheaper. Even if sometimes we ourselves do not suspect it.

So is it worth it?