In today's era of heightened inflation, everything seems more expensive - from groceries to new cars. But one essential living room staple has managed to buck the trend and even become cheaper: televisions. Today, you can buy a 32-inch TV for less than $100, twice as large as an RCA set from 1973.
Are TV manufacturers intentionally lowering prices? Not really.
There are various factors contributing to the fall in TV prices, some related to production and others to marketing. The competition is fiercer, production processes are more efficient, and attractive discount deals confirm market trends. Some 55-inch TVs are being sold at full price in retail stores like Best Buy and Target, as well as online platforms like Amazon, for less than $250.
Perhaps the most significant factor is the new revenue stream for TV manufacturers: the sale of customer data. With internet connectivity becoming the norm, most TV manufacturers have morphed into data brokers, profiting from the information they collect.
Evolving screen design
The purpose of TVs has evolved, and so has their appearance. What once was a bulky piece of furniture with a wooden frame is now a sleek, glossy black slab that can be carried to the store and hung on the wall. Some modern models are even designed to look like picture frames.
The transformation of materials used in TV manufacturing also influenced the production process. One significant improvement in this process is a scientific development known as "Glass Matrix," which benefits larger television screens.
Paul Gagnon, consumer technology consultant at market research firm Circana, noted that TV manufacturers have found ways to produce multiple screens on a single larger sheet of glass, reducing costs.
"The easiest way to reduce costs is by making them from larger starting materials," Gagnon said. "So they're not actually increasing in cost as they get larger."
However, this design has drawbacks as modern TVs become thinner and lighter, increasing the risk of falling or breaking. The internet is filled with complaints from customers upset about the fragility of flat-screen TVs.
New players enter the market
Another reason for lower prices is the increasing competition.
In recent years, new companies with relatively affordable products have entered the US market, intensifying competition with traditional TV manufacturers. Two popular newcomers of the past decade are Chinese companies: TCL started selling TVs in the US in 2014, and Hisense launched in 2015. Both companies have been gaining market share globally.
TCL is now available in large retailers like Best Buy, resembling Motorola or RCA from decades ago.
"If we look back at the early days of the TV industry, around 20 years ago, there were fewer TV manufacturers, and they had their proprietary production technology," Gagnon said.
Improvements in production processes have made competition easier and lowered prices.
"The result of competition over time is a decrease in profit margins," Gagnon said.
Affordable high-end TV features
Not all TVs are cheap. Add-ons often not included in discount models, such as built-in soundbars and audio processing, 4K resolution, "motion smoothing," and a wider range of colors and brightness levels, are available at an extra cost.
Most TVs utilize an LED technology where LED lights illuminate the screen. However, high-end OLED TVs with the best image quality can still command thousands of dollars.
OLED is short for organic light-emitting diode. Each pixel in an OLED panel acts as its own light source, producing highly accurate and consistent colors. These premium OLED TVs, manufactured by companies like LG and Sony, are often thin and expensive.
Who's watching?
In the past decade, the TV industry has undergone significant changes, as more Americans abandon traditional cable packages in favor of streaming services such as Netflix, Hulu, and Amazon Prime.
According to Nielsen's annual marketing report, Americans will have watched more than 19 million hours of streaming content by 2022. That's 19 million years of streaming.
Today, it's hard to find a TV without built-in streaming capabilities, known as Smart TVs.
streamed content has revolutionized the cable industry, and Smart TVs have changed the way TV manufacturers do business.
"When we watch TV, we are being watched back," said Sara Geoghegan, consumer advocate and legal counsel at the Electronic Privacy Information Center. "Smart TVs collect a lot of information."
Geoghegan said the amount of data that TV manufacturers collect is often unclear but once a user sets up a Smart TV, viewing habits, location, and possibly other personal data are recorded and shared, unless a user takes time to adjust the security settings of the device.
This new business model changes the way TV manufacturers calculate costs.
"For TV manufacturers that sell TVs with their own proprietary Smart TV operating systems or work with third-party streaming platforms like Roku or Amazon Fire TV, it's essential to sell as many devices as possible," Gagnon said. "More attention on an ad or more opportunities to sign up for a subscription," he added.
The drive for more data might also push TV manufacturers to lower prices, he suggested.
Not everyone is happy with the idea that smart devices collect personal data. Geoghegan believes spyware is one of the main reasons why many people feel uneasy about their new flat-screen TVs costing only $70.
"I don't think people consider that their intimate activities at home are used in this way to profile them and sell them things," Geoghegan said. "The monetization of our personal data is something we should concern ourselves with."
