VT Professor

Is it Time For Consolidation in the TV Industry?

I referred to them as "crappy" because they are....Just my observation. When I purchased a number of sets for my home, I did extensive research. Most of the video magazines give them average at best ratings. The cabinetry is cheap looking, as compared to their competitors namely Sony Bravia, Pioneer standard and Elite, Sharp, and Panasonic. Re: performance, they look ok in HD, although the colors are washed out. However, in standard definition, the bigger brands blow them away. This is an important aspect because with the limited HD offering to most consumers, standard channels are the primary viewing option(s). At the end of the day, they are decent tvs, especially for the money, but as the saying goes "you get what you pay for." And, I stand by my original concept that once the general consumer really understands what they are buying, things will change.

Is it Time For Consolidation in the TV Industry?

RC- I guess we agree to disagree. I think the big guys are positioned well through their combination of cost structure AND quality. Vizio and Olevia are crappy tvs....I've looked at them myself as I was attracted to the price, but at the end of the day, you get what you pay for. Yeah, they look ok in the store, and I admit, most are buying on price, but once the mass market really learns about HDTV, they won't make the same mistake a second time around. Most consumers are so busy orgasming at the point of purchase, they don't even know what their buying. I've actually heard stories where people have returned HDTVs because they think they'll get everything in HD just b/c they have a HD TV! And because Vizio has thrown themselves to Wal-Mart and Sams, wait until the next contract is up and the big box store squeezes every penny out of them by threatening all their new found share...That's the Wal-Mart way (and Target by the way). Their lack of a good channel structure will backfire. You can't become as sustained market leader by being a sourced, "me too" product. It just doesn't work.

Is it Time For Consolidation in the TV Industry?

RC Martin- The auto industry is a totally different animal. First, their competitors (Honda & Toyota) weren't "sourcing" all their product. Secondly, the big 3 got in trouble and are still in trouble due to their poor cost position....Namely the union(s). Their cost per vehicle is approximately $1000 more per vehicle due to the higher wages, pension commitments, and LT health care obligations. Conversely, their foreign competitors have also vertically integrated, but built state of the art plants in the US....North Carolina for example....And the workers are non-union, but still have good benefits. Earlier this Fall, GM took a major stride towards changing their LT cost position by unloading the health care fund on the union.

Is it Time For Consolidation in the TV Industry?

The big boys (Sony, Sharp, Samsung & etc) are positioned well via vertical integration and huge investments in technology. These smaller, off brand names, are simply capturing share through price points....It won't last. Their logistics systems are inferior and their means of sourcing product as a primary strategy will never get them much more than a "me too" product. If some of the smaller companies merge, there won't be much synergy....Just two small companies without real direction becoming a bigger entity without direction, and twice the problems (& cost). The big boys all know these facts & this is why they aren't making any real efforts to consolidate....They'll just wait them out, or "die on the vine" as they say. It will take some time, though.