DVD players keep falling in price, but low cost carries price

05 Jan 04 00:52 by Seán Byrne in category Uncategorized To news archive

Print this page

"urn:schemas-microsoft-com:office:smarttags">

With the huge drop in DVD player pricing over the last few years, one may ask how come DVD players are able to sell so cheaply while the companies still have to make a profit. Well,
there are several factors in keeping the end price as low as possible.

Pretty much all bottom price DVD players (<$ 40) are non-name brands. This means that the manufacturers save costs by relying on low prices to attract consumers thus saving a fortune on advertising costs. By buying the DVD player raw components in massive bulk quantities, this reduces the effective cost of each individual component while still offering high quality and reliability. Finally, nearly all
DVD player manufactures are inChina where workers work in near-slave conditions and are paid so little that they qualify for food stamps. These players are then shipped to America for sale under ‘generic’ brand names for eye-popping prices and also are sold to larger DVD player companies that simply re-badge the drive to sell it under a better known brand name at their regular prices. Whole-sellers also take part in low prices by frequently bringing down DVD player prices below profitable margins in an attempt to attract consumers into purchasing more profitable products also such as DVDs. This is actually the total opposite approach of Apple’s iTunes online music store.

Despite the prices being so low, these players do generally offer good quality playback and features such as CD-R/RW/MP3/JPEG playback as well as various output sockets such as RCA, S-Video, digital audio out and so on. Many non-brand options even offer the ability to disable copy-protection and region-protection restrictions through a hidden menu or remote key sequence. The hidden costs end up coming from the China worker’s pockets and the difficulty in purchasing products that are actually made outside of China. This applies regardless of the end-product price. Finally, many Chinese DVD manufactures don’t even pay for the $ 10 to $ 15 royalty fees per product for using patented technologies, thus costing the patent holders. Royalty charges have a significant effect on the final sale price.

If you want to enjoy eating sausage, you probably shouldn’t watch sausage being made unless you’ve got a strong stomach.

In somewhat the same way, you shouldn’t ask how it’s possible to buy a DVD player these days for under $ 40.

These ultra-inexpensive machines, from no-name importers such as AMW, Apex, Coby, CyberHome, Mintek and Norcent, are surprisingly solid. Video and audio quality, along with reliability, are virtually as good as models costing twice as much from consumer-electronics giants such as Panasonic, Philips, RCA, Sony and Toshiba.

But there are hidden costs. Horrific working conditions on assembly lines in China, heightened trade tensions with Asian nations and Wal-Mart store clerks paid so little they qualify for food stamps, are partially related to relentless pressure to sell popular products at eye-popping low prices.

Low-cost DVD players became the holiday-shopping legend of 2003, thanks to a woman in Orange City, Fla., who claimed she was trampled the day after Thanksgiving by a crowd at Wal-Mart desperate to snag an Apex model marked down to $ 29.87.

The story now looks too good to be true; the woman, a former Wal-Mart employee, has a history of filing numerous slip-and-fall lawsuits and workers’-compensation claims. But many people are only likely to remember reports of her being pulled semiconscious from the floor where she was still clutching a box containing one of the DVD players.

Wal-Mart wasn’t even the leader in offering “door-buster” discounts to lure shoppers. Fry’s Electronics, for the day after Thanksgiving only, offered a Mintek DVD player at $ 26.99, while Best Buy offered DVD players from AMW and other manufacturers at $ 19.99 after a $ 20 mail-in rebate.

Putting aside these loss-leader promotions, it’s no longer difficult to find no-name DVD players for $ 39, and most of the giants now offer models under $ 80.

For perspective, consider DVD players cost $ 500 to $ 800 when the format was introduced in March 1997, and the door-buster pricing in 2002 for no-name DVD players didn’t get below $ 49.

Similar dramatic price cuts are happening across almost every category of consumer electronics, with combo DVD/VCR units selling for as little as $ 79 and five-megapixel digital cameras at $ 299.

Nor is the trend likely to stop anytime soon. Next year, DVD recorders ‘” now mostly $ 299 and above ‘” could sell for as little as $ 149.

I’d recommend reading the full story href="http://seattletimes.nwsource.com/html/businesstechnology/2001828701_ptcheapdvd03.html"
target=_new>here.

With the massive drop in both CD and DVD player pricing, it is a pity that the same could not be done for media pricing also. For example, no much how little pays for a CD/DVD player, Movie and music prices will still remain the same. The lowest DVD player price can be purchased for the price of two DVDs and some portable CD players are now selling cheaper than a typical chart album! With the growing popularity of DVD recorders, these products are likely to following the DVD player price drop over the next year or two.

Source: The Seatle Times

5 Comments

Sherrif: Posts: 851; Posted on: 05 Jan 04 04:51

I think we all know the power of greed..have we sold one to many souls and the dark side is winning..???.........:X

RoC1909: Posts: 102; Posted on: 05 Jan 04 05:13

Woman trampled at a Wal-Mart! She needs to get a life, thats what I have to say. She also needs to visit CDFREAKS.Com *shameless plug* to find out what a good DVD player to get trampled over is.

spacegrass: Posts: 107; Posted on: 06 Jan 04 18:53

If we don't buy these cheap electronics, then those poor chinese workers will not have any job at all. It is not the direct responsibility of us foreign consumers to change labor practices in China, it is up to the Chinese laborers to do that themselves, just as works in the U.S. and parts of Europe did over a century ago. And the royalty issue is also not the direct responsibility of the consumers. The job of enforcing that belongs to the corporations and the courts.

theTAO: Posts: 28; Posted on: 07 Jan 04 07:44

"Whole-sellers also take part in low prices by frequently bringing down DVD player prices below profitable margins in an attempt to attract consumers into purchasing more profitable products also such as DVDs. This is actually the total opposite approach of Apple's iTunes online music store." Umm, isn't that the very *same* approach as iTunes...give away the player/software for free, then charge high prices for media? And of course the Dark Side is winning.

Where have you been?? Keep the people fat and entertained, and you can pull all sorts of crap behind their backs!

NitteZtalker: Posts: 3; Posted on: 03 Jul 05 22:14

The reason dor that cheap DVD player are so strong is because... they're manufactured by the same big companies. The only difference is the cost, that means you pay for the mark, not for the player. ¿Where do you think the "giants" made its products? javascript:smilie(':S') :S The greed is the mother of all sins...

Hello guest,: To benefit from all extra features you need to log in or sign up.; signup log in

Most popular headlines

PSJailbreak PS3 mod ban permanent, while free solution is unveiled (2)

Fri 3 Sep 21:04 by wconeybeer
Game Consoles, Piracy

An Australian court has make a decision today to permanently uphold their temporary ban on the PS3 PS Jailbreak USB modchip dongle just as a new free solution, PS Groove, has hit the internet with instructions and step-by-step instructional videos going viral.

PSGroove released: Open Source PS3 hack, PSJailbreak competitor (1)

Wed 1 Sep 19:09 by Randomus
Game Consoles

Sony PlayStation 3 owners now have yet another jailbreak to choose from when looking to unlock their game console, as the open source PSGroove PSJailbreak has been released.

PS3 Key might be the next jailbreak hack solution for PS3

Tue 31 Aug 00:00 by wconeybeer
Game Consoles

Is a new USB jailbreak device for the PS3 currently in development? That’s the word on the street, as a new website and Facebook page have appeared for a device called PS3 Key.

Microsoft to offer Windows 7 Family Pack for the holidays (17)

Thu 2 Sep 20:28 by Randomus
Software

Microsoft will begin selling the Windows 7 Family Pack early next month in an effort to drive up demand for its latest generation OS leading towards Christmas.

See all headlines