If a company could pay $5 a customer for a competitive edge in customer satisfaction over their competitors, they would. Either they are getting way more than that or there is some cartel/monopoly action going on in the market. Maybe they are playing the long game to introduce an ad free model at a premium.
Still don’t see how nobody is undercutting existing players with ad free, smart tvs.
In a made up scenario let’s start with a dumb 50"ish TV. That cost them around $100 to build. Add in another $50 for shipping and distribution fees. It’s at the store for $150 cost. If they set the price at $400. There is $250 dollars of profit to share between the store and the manufacturer. The manufactuerer likely gets under $100.
Now for a smart TV the revenue stream looks different. First their costs only go up by a few dollars for adding the “smart” chips. So let’s say $155 cost. Then they collect revenue from the streaming providers to be supported by their smart TV say $30 per set. Then they collect the $20 per set per year in user data collected. So if they price the smart TV the same as the dumb one they generate $95 from the sale of the set.
So the profit from a dumb TV is $100 at he point of sale.
The profit from a smart TV is $225+ in a constant revenue stream over 5 years.
And this is why we see so much advertising for smart TV’s as being the best thing.
If a company could pay $5 a customer for a competitive edge in customer satisfaction over their competitors, they would. Either they are getting way more than that or there is some cartel/monopoly action going on in the market. Maybe they are playing the long game to introduce an ad free model at a premium.
Still don’t see how nobody is undercutting existing players with ad free, smart tvs.
Why is basic math.
In a made up scenario let’s start with a dumb 50"ish TV. That cost them around $100 to build. Add in another $50 for shipping and distribution fees. It’s at the store for $150 cost. If they set the price at $400. There is $250 dollars of profit to share between the store and the manufacturer. The manufactuerer likely gets under $100.
Now for a smart TV the revenue stream looks different. First their costs only go up by a few dollars for adding the “smart” chips. So let’s say $155 cost. Then they collect revenue from the streaming providers to be supported by their smart TV say $30 per set. Then they collect the $20 per set per year in user data collected. So if they price the smart TV the same as the dumb one they generate $95 from the sale of the set.
So the profit from a dumb TV is $100 at he point of sale.
The profit from a smart TV is $225+ in a constant revenue stream over 5 years.
And this is why we see so much advertising for smart TV’s as being the best thing.