“ None of the companies that produce liquid crystal display (LCD) panels—Samsung and LG Display from South Korea, Japan’s Sharp and Panasonic, their Taiwanese rivals—makes money from it. Between 2004 and 2010 the industry suffered cumulative economic losses of $13 billion.”
The Economist identifies 3 reasons for the situation: televisions are commodified, manufacturers expanded capacity and created a glut, and all this coincided with a downturn in rich countries. Companies are trying to fight commodification with GoogleTV, custom Android builds, and other internet bolt-ons, but consumers haven’t bitten.
Here’s something odd: televisions have become commodified yet Hollywood cites improved home theater quality as hurting cinema ticket sales. If we take this at face value, it appears television quality has hit a wall when it comes to audio and video fidelity, which are metrics theaters represent. People see televisions as interchangeable and aren’t eager to pay more for them.
Hollywood, then, is doubly screwed. By producing the high-end content you buy nice TVs to watch, Hollywood provides televisions with what little value they have. So they’re driving television upgrades which eat into ticket sales and fuel a market to support R&D needed to discover next television innovation, from which they will almost certainly not benefit.
Hollywood’s stumbles are connected to the electronics industry’s inability to make a profit on a television.
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