7 ms·

TV manufacturers can offset the lower price by selling ads to show you on your “smart” tv

by brtkdotse 5y ago

jjoonathan 5y ago
That wouldn't explain the delay, and do they really expect to sell $3000 of ads per customer? I have doubts.
- Hamuko 5y ago
  They get money from the ads, they get money from selling your usage data, they get money by selling space on the remote for streaming apps, and probably through some other means as well.
  - jjoonathan 5y ago
    Sure, but my intuition says they might get a few hundred dollars that way, tops. Is my intuition off by an entire order of magnitude?
    - WillPostForFood 5y ago
      Vizio, as a public company, now has to share their ad revenue data: https://www.theverge.com/platform/amp/2021/11/10/22773073/vizio-acr-advertising-inscape-data-privacy-q3-2021 https://www.theverge.com/platform/amp/2021/11/10/22773073/vi...
      - jjoonathan 5y ago
        > from $10.44 to $19.89. Yeah, I thought $3000 sounded silly, and my only mistake was that I thought it was one order of magnitude silly when in fact it was two orders of magnitude silly.
        cgriswald 5y ago
        No, that's completely wrong. That number is specifically for their SmartCast subscriber service. It's not clear what the rate is, but they subsequently talk about Roku making $40/mo; so it's possible that's the monthly rate. Assuming it is monthly, a television lasts for five years, and that is their only other source of revenue from the televisions, that's ~$1200. The telling part of the article: > ...[Vizio's] Platform Plus segment that includes advertising and viewer data had a gross profit of $57.3 million. That’s more than twice the amount of profit it made selling devices like TVs, which was $25.6 million, despite those device sales pulling in considerably more revenue.
        jjoonathan 5y ago
        If those are actually monthly figures you might be right, but I'm still not convinced that they are. $40/mo sounds implausibly high to me. Even if Roku, in a non-monopolized space, managed to swing a hefty 30% cut, that would mean an average of $120 spent on streaming services per month. Are sports channels really expensive? Is that what I'm missing?
      - jonnycoder 5y ago
        Most of the ad money comes from WatchFree Plus app on the tv. "Vizio execs said 77 percent of that money comes directly from advertising, like the kind that runs on its WatchFree Plus package of streaming channels, a group that recently expanded with content targeting. The next biggest contributor is the money it makes selling Inscape data about what people are watching."
        brokenmachine 5y ago
        >The next biggest contributor is the money it makes selling Inscape data about what people are watching sigh.
    - hazza_n_dazza 5y ago
      your argument requires that advertising is cost effective for the advertiser. what if therre was a competing ecosystem, in which advertisers pushed up prices overall in a bid to out-compete each other? essentially, the cost of advertisments is added to the cost of consumer and all other goods. advertising increases cosumer costs, and decreases consumer choice.
- dragonwriter 5y ago
  > That wouldn’t explain the delay That and expected maximum market size (or, more precisely, expected shape of the demand curve) do, I thimk, explain the delay, and higher price even before considering subsidy from advertising/data revenue, because there are fewer units to amortize fixed per-design production line costs across. 4K OLED laptops are more available and at a much smaller premium, perhaps because people buy a lot more laptops than desktop and larger monitors.

TV manufacturers can offset the lower price by selling ads to show you on your “smart” tv

jjoonathan 5y ago

That wouldn't explain the delay, and do they really expect to sell $3000 of ads per customer? I have doubts.

Hamuko 5y ago
They get money from the ads, they get money from selling your usage data, they get money by selling space on the remote for streaming apps, and probably through some other means as well.
- jjoonathan 5y ago
  Sure, but my intuition says they might get a few hundred dollars that way, tops. Is my intuition off by an entire order of magnitude?
  - WillPostForFood 5y ago
    Vizio, as a public company, now has to share their ad revenue data: https://www.theverge.com/platform/amp/2021/11/10/22773073/vizio-acr-advertising-inscape-data-privacy-q3-2021 https://www.theverge.com/platform/amp/2021/11/10/22773073/vi...
    - jjoonathan 5y ago
      > from $10.44 to $19.89. Yeah, I thought $3000 sounded silly, and my only mistake was that I thought it was one order of magnitude silly when in fact it was two orders of magnitude silly.
      - cgriswald 5y ago
        No, that's completely wrong. That number is specifically for their SmartCast subscriber service. It's not clear what the rate is, but they subsequently talk about Roku making $40/mo; so it's possible that's the monthly rate. Assuming it is monthly, a television lasts for five years, and that is their only other source of revenue from the televisions, that's ~$1200. The telling part of the article: > ...[Vizio's] Platform Plus segment that includes advertising and viewer data had a gross profit of $57.3 million. That’s more than twice the amount of profit it made selling devices like TVs, which was $25.6 million, despite those device sales pulling in considerably more revenue.
        jjoonathan 5y ago
        If those are actually monthly figures you might be right, but I'm still not convinced that they are. $40/mo sounds implausibly high to me. Even if Roku, in a non-monopolized space, managed to swing a hefty 30% cut, that would mean an average of $120 spent on streaming services per month. Are sports channels really expensive? Is that what I'm missing?
    - jonnycoder 5y ago
      Most of the ad money comes from WatchFree Plus app on the tv. "Vizio execs said 77 percent of that money comes directly from advertising, like the kind that runs on its WatchFree Plus package of streaming channels, a group that recently expanded with content targeting. The next biggest contributor is the money it makes selling Inscape data about what people are watching."
      - brokenmachine 5y ago
        >The next biggest contributor is the money it makes selling Inscape data about what people are watching sigh.
  - hazza_n_dazza 5y ago
    your argument requires that advertising is cost effective for the advertiser. what if therre was a competing ecosystem, in which advertisers pushed up prices overall in a bid to out-compete each other? essentially, the cost of advertisments is added to the cost of consumer and all other goods. advertising increases cosumer costs, and decreases consumer choice.
dragonwriter 5y ago
> That wouldn’t explain the delay That and expected maximum market size (or, more precisely, expected shape of the demand curve) do, I thimk, explain the delay, and higher price even before considering subsidy from advertising/data revenue, because there are fewer units to amortize fixed per-design production line costs across. 4K OLED laptops are more available and at a much smaller premium, perhaps because people buy a lot more laptops than desktop and larger monitors.