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Comment by gruez | Hacker News Reader

>With less demand for actual TVs, there’s less reason for manufacturers to price them even more highly.

I don't buy this reasoning. Tablets and phones supposedly replaced laptops and desktops (or so I've heard), yet the prices for those hasn't really budged in the past couple of decades.

>But the most interesting and telling reason for why TVs are now so cheap is because TV manufacturers have found a new revenue stream: advertising.

How big can the subsidy possibly be? If Facebook's average revenue per user is $25/year, and a TV lasts 5 years, that's at most $125 of subsidy per TV. It's probably order of magnitudes lower if you factor in costs for running the advertising platform, that you really can't show that many ads as Facebook (it can show a sponsored story every few stories, TV producers can't inject an ad every few minutes), and probably have worse targeting.

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> Facebook's average revenue per user is $25/year

The right comparison is probably to US Facebook Revenue and that's on track to exceed $100/person/year for 2019. Globally, $25 does seem to be around the average.

Source: 2019 Q3 FB Earnings Report https://s21.q4cdn.com/399680738/files/doc_financials/2019/q3...

Disclaimer: FB Employee

Yes, I agree. The article's claim about app rev share offsetting big parts of the cost just doesn't make sense.

The reason that prices are lower is that manufacturing capacity is much higher, not supporting analog input saves money, vertical integration onto a handful of ICs, container shipping and supply chains are cheaper and Costco, WalMart etc will sell TVs for very low markup to drive traffic.

Roku is built into many of the lower end TVs. I’m sure they get a cut of the revenue that Roku receives.

https://www.bloomberg.com/news/articles/2019-12-11/streaming...

Nearly every inch of real estate on Roku is for rent. For $1 million, a streaming service can take over the home screen to advertise a show. When Hulu got the rights to stream Seinfeld, it paid Roku to transform a portion of the screen into an image of Jerry’s apartment instead of the default purple backdrop. Hulu, Netflix, Showtime, and YouTube have paid Roku to build brand-specific buttons on its remote controls; these lead users straight to those services. At $1 per customer for each button, the cost can quickly add up to millions of dollars in monthly fees.

I'm not claiming that TV manufacturers don't get some money from rev shares. My point is that it's not money the manufacturer can count on because subscribing or buying extra services is optional for customers on every set that I've seen. The CPM from just displaying ads in a program guide has to be tiny as CPMs for display only is crap everywhere. In my view, that's why some of these UIs have every pixel for sale, it's not highly valued.

For myself and my sample of family and friends, TVs are displays. We buy the screen we want based on size, specs and image quality, we never connect the screen to the internet, run one HDMI into it and control the feed upstream from a cable or satellite box, streaming box (FireTV, AppleTV, etc) or HTPC running something like Plex. As for the remote control, after configuring the screen to HDMI-1 and turning off all the stupid hyped-up color, frame interpolation and other gimmicky modes that try to create pixels that were never in the source signal, I take the batteries back out of the remote and toss it in the box full of all the other unused TV remotes in the basement waiting for when the screen gets donated to a friend or relative in several years (I just had a funny image pop in my head of all those remotes sitting in the box commiserating like the forgotten toys in the attic in Toy Story).

Manufacturers get zero incremental revenue from us. I'm sure they get some rev from some people but it's going to be a blended average with a fair number of zero samples. The reason I think this is I have a little personal experience doing software bundle deals with hardware consumer electronics manufacturers. It was similar in that if consumers bought into the upsell on our apps there was a rev split with the manufacturer. CE manufacturers invariably assigned zero net present value to any theoretical future revenue that isn't guaranteed. They live and die by their quarterly COGS when it hits the dock in Shenzen. I'm not saying their business can't change over time but that's where it's coming from.

And that’s all anecdotal. I posted a citation where Roku is getting literally millions from advertising. If the TV manufacturer gets $25 from Roku that’s 5% of the total cost of $500 65 inch TV.

You don’t have to subscribe to anything for the TV manufacture to make money. When you buy the Roku TV with 4 hardcoded buttons to streaming services that’s $4 by itself. Not to mention that half the home screen on a Roku has advertising and unlike computers they aren’t easily blocked.

CE manufacturers invariably assigned zero net present value to any theoretical

Of course that’s not how it works for any investment. You compare the risk/reward and calculate the expected return and compare it to your risk free rate of return. In the US that is typically the return on government bonds.

That and the TV manufacture selling off your viewing habits :-) There are TV's out there that send screengrabs back to their systems.

Prices for laptops and desktops are way down. Best Buy is selling a core i5, 256 SSD, 8 GB ram Dell laptop for $399 as of this writing. That's plenty of power for most used.

Where prices continue to be high is for business laptops, where people will pay a lot more money for a little bit more performance (and better build quality, lighter weight).

I remember a time when a half decent laptop was $1500.

What's the screen quality on that $400 laptop? Screens, keyboards, trackpads, is how laptops differentiate. The overpowered (thermally throttled) CPUs are just to get the ricers' money.

Past couple of decades? Hardly, prices have gone through the floor in that time. That's not to say more expensive models can't be found just as with TVs but your typical home user computer is most certainly a bargain these days. Enterprise/workstation/gaming are still premium though.

Ad revenue includes preinstalled apps, they are getting upfront money and then income over time. On a product that $300 dollars to the consumer and additional $100 is a huge margin increase to just be blowing off like this.

An entry level laptop was still ~$1000 two decades ago.

https://mobile.twitter.com/akpix/status/551801976267485186

$1200 and $1500 if you don't count the fake savings (mail in rebate and rebate for buying MSN subscription)

I just bought an Honor Magicbook for $600 that's plenty powerful for a development laptop. My first development PC (Pentium 166) cost $3500 in the mid 90s, so factor that with inflation.

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