5 ms·

Reduced prices are always either paid for with cheaper components or backend revenue.

by judge2020 5y ago

LegitShady 5y ago
or less profit
- lotsofpulp 5y ago
  TVs are already a low single digit profit margin business. https://www.macrotrends.net/stocks/charts/VZIO/vizio-holding/profit-margins https://www.macrotrends.net/stocks/charts/VZIO/vizio-holding...
  - scq 5y ago
    That depends on the market positioning. High end LG and Samsung TVs have a healthy margin. In the first half of 2018, LG Electronics' operating profit margin on their TV segment was 12.4% due to strong OLED sales[0]. 0: http://www.businesskorea.co.kr/news/articleView.html?idxno=24794 http://www.businesskorea.co.kr/news/articleView.html?idxno=2...
    - tyrfing 5y ago
      3.3% for LG last quarter, that 2018 number is better than anything they've seen in the last 2 years. Samsung is losing money manufacturing panels, but their reports are a mess. For comparison, Apple is at 31%, Walmart is at 4.5%.
      - stjohnswarts 5y ago
        Wow, that's really surprising. I figured people were doing more TV and streaming during the boredom of the covidapocalypse
        lotsofpulp 5y ago
        Profit margin is not necessarily a function of how much utility your product provides.
- willcipriano 5y ago
  Less profit per unit, you may sell more units than others and make more overall profit.
- tnel77 5y ago
  I think that’s illegal.
  - judge2020 5y ago
    Not sure why this is downvoted. publicly traded companies are legally required to go for maximum profit for their shareholders. Without some Announcement like “we’re going to be making privacy friendly TVs, but customers will be paying more to make up for the lost ad revenue”, it would be pretty bad mismanagement for a company to not show ads somewhere in their consumer TVs when every one of their competitors is doing just that.
    - colejohnson66 5y ago
      It’s downvoted because it’s wrong; It’s a myth. There is no “legal fiduciary duty” to maximize profits. There is a fiduciary duty to the shareholders, but only in the sense of not wanting to be voted off the board and possibly sued if you mislead them. If the whole board agrees on your plan to bank the company on a possible suicide move, you’re fine.
    - mikeyouse 5y ago
      No they really aren’t, this is a common but silly misconception. Managers have a fiduciary duty to their shareholders but there’s a huge amount of latitude in what that means with the only real bright line rules being things like “don’t improperly enrich yourself with company assets”. If managers want to sell tvs without ads, they absolutely can. If the board (which represents the shareholders) disagrees with that decision, they can fire the managers, but there’s no “law” requiring them to chase profits. That really lets normal greedy bullshit off the hook too easily - laws don’t cause anti consumer behavior, garden variety assholes do because it makes them more money.
    - unmole 5y ago
      > Not sure why this is downvoted. publicly traded companies are legally required to go for maximum profit for their shareholders. This stupid meme needs to die. The management of companies has a fiduciary duty to act in the best interests of shareholders. That does not imply any legal requirement to maximize profit.
yjftsjthsd-h 5y ago
Or lower profit margins; they aren't fixed in stone.
PaulHoule 5y ago
I was impressed with the thinking about value-per-dollar that went into a Vizio TV that we got from a friend. For instance instead of having six HDMI ports you don't need (or wouldn't need if they didn't burn out so quickly) like you'd have on a Sony or a Samsung there are just two HDMI ports. I appreciate thin TVs that mount on the wall but the Vizio is a bit thicker and has room for a quality set of speakers that, in my opinion, outperform a Denon soundbar we have kicking around the house. My take is that from one end to another end somebody thought carefully about what features to put in that would make the TV valuable to users.
ssalazar 5y ago
Even higher end brands like Samsung are pulling stuff like this. Market forces demand constant growth, and in a saturated market this means some business unit manager will keep adding more invasive advertising as long as people keep buying the TVs.
- kitsunesoba 5y ago
  I've had good luck with TVs from Sony, which would probably be considered higher end based on price bracket. They ship with near-stock Android TV, don't make a fuss about not being connected to the internet, and allow firmware updates via thumb drive. Have had a couple now that I use with an Apple TV, which is a pairing that works very well.
  - pabs3 5y ago
    I wonder if Sony are releasing the Linux source code they run Android on and I wonder if their firmware updates are signed. If they do release source and updates are signed, you could probably install a regular Linux distro with Kodi.
    - aaaaaaaaata 5y ago
      Kodi has an Android build, too.
      - pabs3 5y ago
        Probably, but that won't stop the vendor from adding ads to the Android TV OS.
  - rmccue 5y ago
    Likewise, but the problem now with the built-in software is that Android TV is getting increasingly user-hostile as well. The major UI update they made which added an uneditable promotional section to the top of the home screen eg.
paxys 5y ago
These cheaper components are perfectly fine for a lot of people's needs. For example many companies buy display panels that failed to meet quality controls at Samsung or LG and package and sell them under their own brands at very steep discounts. Far from being unusable, they usually have minor quality differences like a worse bezel/stand, 5 allowable dead pixels instead of 3, or slightly more backlight bleed. If you can live with that, they are pretty great options to consider. Adding nonsense like advertising and sale of personal data completely kills that upside though.
prepend 5y ago
Originally Vizio was buying the same components but selling for less because they didn’t have the brand name. The quality/price ratio was great when I bought my first 40 inch Vizio like 10-15 years ago.

Reduced prices are always either paid for with cheaper components or backend revenue.

LegitShady 5y ago

or less profit

lotsofpulp 5y ago
TVs are already a low single digit profit margin business. https://www.macrotrends.net/stocks/charts/VZIO/vizio-holding/profit-margins https://www.macrotrends.net/stocks/charts/VZIO/vizio-holding...
- scq 5y ago
  That depends on the market positioning. High end LG and Samsung TVs have a healthy margin. In the first half of 2018, LG Electronics' operating profit margin on their TV segment was 12.4% due to strong OLED sales[0]. 0: http://www.businesskorea.co.kr/news/articleView.html?idxno=24794 http://www.businesskorea.co.kr/news/articleView.html?idxno=2...
  - tyrfing 5y ago
    3.3% for LG last quarter, that 2018 number is better than anything they've seen in the last 2 years. Samsung is losing money manufacturing panels, but their reports are a mess. For comparison, Apple is at 31%, Walmart is at 4.5%.
    - stjohnswarts 5y ago
      Wow, that's really surprising. I figured people were doing more TV and streaming during the boredom of the covidapocalypse
      - lotsofpulp 5y ago
        Profit margin is not necessarily a function of how much utility your product provides.
willcipriano 5y ago
Less profit per unit, you may sell more units than others and make more overall profit.
tnel77 5y ago
I think that’s illegal.
- judge2020 5y ago
  Not sure why this is downvoted. publicly traded companies are legally required to go for maximum profit for their shareholders. Without some Announcement like “we’re going to be making privacy friendly TVs, but customers will be paying more to make up for the lost ad revenue”, it would be pretty bad mismanagement for a company to not show ads somewhere in their consumer TVs when every one of their competitors is doing just that.
  - colejohnson66 5y ago
    It’s downvoted because it’s wrong; It’s a myth. There is no “legal fiduciary duty” to maximize profits. There is a fiduciary duty to the shareholders, but only in the sense of not wanting to be voted off the board and possibly sued if you mislead them. If the whole board agrees on your plan to bank the company on a possible suicide move, you’re fine.
  - mikeyouse 5y ago
    No they really aren’t, this is a common but silly misconception. Managers have a fiduciary duty to their shareholders but there’s a huge amount of latitude in what that means with the only real bright line rules being things like “don’t improperly enrich yourself with company assets”. If managers want to sell tvs without ads, they absolutely can. If the board (which represents the shareholders) disagrees with that decision, they can fire the managers, but there’s no “law” requiring them to chase profits. That really lets normal greedy bullshit off the hook too easily - laws don’t cause anti consumer behavior, garden variety assholes do because it makes them more money.
  - unmole 5y ago
    > Not sure why this is downvoted. publicly traded companies are legally required to go for maximum profit for their shareholders. This stupid meme needs to die. The management of companies has a fiduciary duty to act in the best interests of shareholders. That does not imply any legal requirement to maximize profit.

yjftsjthsd-h 5y ago

Or lower profit margins; they aren't fixed in stone.

PaulHoule 5y ago

I was impressed with the thinking about value-per-dollar that went into a Vizio TV that we got from a friend. For instance instead of having six HDMI ports you don't need (or wouldn't need if they didn't burn out so quickly) like you'd have on a Sony or a Samsung there are just two HDMI ports. I appreciate thin TVs that mount on the wall but the Vizio is a bit thicker and has room for a quality set of speakers that, in my opinion, outperform a Denon soundbar we have kicking around the house. My take is that from one end to another end somebody thought carefully about what features to put in that would make the TV valuable to users.

ssalazar 5y ago

Even higher end brands like Samsung are pulling stuff like this. Market forces demand constant growth, and in a saturated market this means some business unit manager will keep adding more invasive advertising as long as people keep buying the TVs.

kitsunesoba 5y ago
I've had good luck with TVs from Sony, which would probably be considered higher end based on price bracket. They ship with near-stock Android TV, don't make a fuss about not being connected to the internet, and allow firmware updates via thumb drive. Have had a couple now that I use with an Apple TV, which is a pairing that works very well.
- pabs3 5y ago
  I wonder if Sony are releasing the Linux source code they run Android on and I wonder if their firmware updates are signed. If they do release source and updates are signed, you could probably install a regular Linux distro with Kodi.
  - aaaaaaaaata 5y ago
    Kodi has an Android build, too.
    - pabs3 5y ago
      Probably, but that won't stop the vendor from adding ads to the Android TV OS.
- rmccue 5y ago
  Likewise, but the problem now with the built-in software is that Android TV is getting increasingly user-hostile as well. The major UI update they made which added an uneditable promotional section to the top of the home screen eg.

paxys 5y ago

These cheaper components are perfectly fine for a lot of people's needs. For example many companies buy display panels that failed to meet quality controls at Samsung or LG and package and sell them under their own brands at very steep discounts. Far from being unusable, they usually have minor quality differences like a worse bezel/stand, 5 allowable dead pixels instead of 3, or slightly more backlight bleed. If you can live with that, they are pretty great options to consider. Adding nonsense like advertising and sale of personal data completely kills that upside though.

prepend 5y ago

Originally Vizio was buying the same components but selling for less because they didn’t have the brand name. The quality/price ratio was great when I bought my first 40 inch Vizio like 10-15 years ago.