DVD is currently THE technology that is conquering a place in living and bedrooms around the world. And while many, many people are getting DVD players, the companies that produce and sell them do not see their profits increase a lot. This because modern DVD players have all functionality for a very low price.
But there is hope as new products appear on the market, DVD players/recorders that also store to a harddisk, connect to the internet and eventually the follow up of the DVD, blu ray technology should increase profits again.
But sales have skyrocketed in large part because prices have plummeted. In turn, so have manufacturers' profits. As no-name, no-frills brands have flooded stores, the Japanese and European electronics giants that invented DVD have watched their profit margins get squeezed in record time. |
Retailers' profits have mostly evaporated, too, as the average price of a DVD player has fallen from $491 in 1997 to an estimated $118 today, according to NPD Intelect, a research firm. Entry-level units sell for $59 or less.
"The joke is you're going to get a free DVD player with the purchase of a DVD [movie] pretty soon," said Noah Herschman, vice president for video at Tweeter Home Entertainment Group of Canton, Mass.
"You can buy a DVD player that has a laser and all sorts of advanced technology ... for less money than it costs to buy a necktie," he added. "It doesn't make any sense."
You can read the entire article here, it also contains some intresting quotes of some company excecutives, so read it!
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Source: Sunspot.net
