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