If you were to go online today and look for televisions on sale (and perhaps you have, given your interest in this article), you would almost certainly be able to find a television to make your living room proud for less than $500. If you wanted a basic one for your bedroom, you could probably do it for less than $200. With the right bargain hunter and some patience, you can still find an HD television for perhaps just a bit over $100 and have it shipped to your house in a day or two for free.
While one might marvel at this feat of capitalism for a moment, it does lead to a few questions. How much should a television cost? Have televisions gotten cheaper over time? And what can we expect from the future in this regard? We also want to explore current trends that may affect both price and value when it comes to television sets. These ideas and developments cannot be reasonably separated from one another.
Want to learn more? Just keep on reading below:
While we can talk about various factors, improvements, and more at length, ultimately, we must review the numbers to answer the simple question: Are TVs cheaper today than in the past?
According to the graph above, the answer is absolutely and emphatically yes, with a few exceptions and taking inflation into account. This has especially been the case for the last 25 years, which have televisions getting cheaper by the year. In fact, the average inflation rate of the past 70 years (since 1950, where televisions were becoming a more common device) is -6.57 percent each year, which is relatively rare considering the jumps in technology and utility television has made during this period.
Furthermore, you are getting more for your money, if only evidenced by how nearly everyone can get a TV and have multiple televisions in the household (one for every room, if you want it).
People do not get their televisions repaired anymore. They simply get a new one, and likely a more recent model with a bigger screen for an increasingly low price, with perhaps with a few extra features. Now, this setup is similar to that of all sorts of different appliances, electronics, and other items. Still, it is especially valid for screens and TVs.
How many seemingly good TVs have you seen in the trash or given away for free? How many are on sale for cheap prices? There are plenty of excuses to get a new (or newer) TV every five years or less, and people take them.
Regardless of any judgments, anyone might want to make about consumer and throwaway culture; it simply is the most logical decision for most households in today's environment. All but the biggest and best TVs are relatively cheap to replace, the parts are more expensive and harder to come by based on that expectation, and labor and inconvenience costs drive most repairs into the uneconomical category. We can expect this trend to cement unless there is a significant change in the industry.
Essentially, this means that televisions will cycle through technologies and features faster, more will be available, and competition will remain steep. What this says about quality can change from manufacturer to manufacturer.
People do not expect to pay thousands of dollars for the same technology that has been around since the 1950s. Times have changed, and so has technology. Back in the earliest days of television (over 65 years ago), the cost for a square inch of television space was about $110. That was considered acceptable to those who paid for the device. In 2017 a high-end TV could cost you $1.78 per square inch (and that is still expensive). These numbers are adjusted for inflation.
The average size of a television has increased over time. Consider the following chart of average TV sizes since 1997, using data from Statista:
While there is more that goes into the cost of a TV than size, it can be a great indicator, when compared with average prices, that customers are getting more for less.
When considering the average cost of a TV and what factors might have affected that, we wanted to take into account this major point, as well as others explained below. People can and should expect more from their televisions, and there should be a sense of constant improvement. Yet new features cost money, and the cutting edge can dramatically increase the cost of a TV. Therefore, when weighing the cost of a TV, it's essential to consider the curve.
Like many of the other appliances and electronics we use in our everyday lives, we have an endless array of updates, new options, and features to contend with from television sets, all of which at least somewhat affect the cost. Bigger screens cost more money, smart features can cost more money, and while the effect is not as dramatic, it can also be expensive to produce software or code features.
Even the type of TV can make a huge difference. LCD and Plasma TVs were not always the norm. While those technologies had with them expected price jumps at the start; inevitably, they readjusted to the new standard.
To put it into perspective, the average cost of the television when it first came out, adjusted for inflation, would be over $10,000. Not only this, but the televisions of then would be unwatchable by today's standards, requiring constant repair and having a screen not much larger than a tablet (and smaller than some tablets) that provided an image in black and white.
How can TVs remain so cheap while getting more sophisticated every year? What goes into a TV, and what factors affect this? While we will not go into every working component of the modern television nor the manufacturing process, we will state that they can be rather complex and have always been complex.
Labor prices have generally lowered. Today, fewer televisions are made in the United States (perhaps some parts or assembly might be here, but certainly not the entire process.) They're more commonly manufactured in countries such as China and often Taiwan. These countries do not have to pay the higher wages present in the United States, and therefore televisions can remain cheaper.
Furthermore, industrial processes have improved to allow parts to be made for cheaper and on a vast scale. While the industry has been able to mass-produce goods for over a century now, there are always improvements being made. While variations and slight changes are made for new models, ultimately, processes stay the same from year to year.
One thing we found consistently in our research is that the profit margin on television sets is actually relatively low and razor-thin by some standards. A good rule is 10-20 percent.
As for the retail markup, it is not as much as you might think. While exact amounts may vary, such a big item's profit might be lower than you think. This may change over time, but we find it unlikely due to intense competition and ease of access to television sets.
Why produce TVs and put so much effort into their improvement if the device itself does not make much profit? The reason is that there is still value for the TV manufacturer (which is likely one of several major electronics producers) to have their name out there and have greater brand recognition. It's also to gain another access point into the consumer's home, in ways we'll discuss later in the article.
We cannot talk about televisions today without talking about the innovations televisions have been subject to in recent years. The resolution, picture quality, and sound have all improved dramatically over time. Most TVs sold today are now smart TVs, which have as much in common with the smartphone you might be reading this on as with the televisions of the past. Some may have 3D functionality, and others may have a touch screen, even if they get relatively little use from the casual viewer. Internet connectivity is improving across all devices, and the Internet of Things is here to stay.
So, when calculating the cost of a TV and its value to you and the average consumer, do you still consider it just a TV? Or does it replace other devices as well, the extra functionality adding more value to the TV? And if that is the case, how should that affect the cost of a TV, and how should we judge it? All complex sub-questions relating to our main query, and ones we are still figuring out the answers for. As for now, it might need to be answered on an individual basis.
Much like gaming consoles have in the past been sold as loss leaders to accumulate profit later on from software, games, and other apps, TVs may in the future offset the cost of manufacturing through similar means. It makes sense given how competitive the market has become and how easily content and features can be controlled or offered remotely.
This means that quite often, smart TVs will have programming options and streaming built into the TV. While the programs might lack quality or polish, they still turn the television into something more than a blank piece of furniture without a cable subscription. Whether through partnerships (more likely) or in-house production, televisions have become more valuable on their own, and that might justify a price increase.
While not as pronounced as the previous example as most content purchases and subscriptions will be through third-party apps or devices, it may not be so dystopian for a TV manufacturer to only allow access to certain features built into the device after the customer has created an account (common) or paid a fee (not as common yet, but possible). With increasing possibilities, we will see experimentation in the near future.
Further still, many customers are worried about the intrusive nature of some smart TVs. They're concerned about the included ads and whether we are being funneled towards content that we otherwise wouldn't like or would not be in our best interests, including things that could potentially be misleading. This is also seen in some cheap tablets where one must pay an extra fee to remove ads. While ads have always been a part of television, they were part of the programming, not the package itself. Now we head into a brave new world, and how this affects cost remains to be seen.
A single entry into a pawn shop or a place that sells used electronics, not even mentioning things such as the Facebook Marketplace or eBay, can tell you that the used TV market is alive and well. As long as people get new TVs while the old one is fine, there will be old ones for the thrifty buyer to snatch up. Prices in this regard will change over time, and while there are calculators to help determine a starting price, the real resale value is, as always, "what you can get for it."
While there's no way to determine the average cost of used TVs, especially when so many different models and sizes are involved, we can tell you that historically it was difficult to find much of a discount on most used TVs sold by the average person. In some cases, people online would try to sell a TV for more than one would be able to get it at a Walmart or a big box store, only demonstrating the need for consumer research.
If you are buying a used TV, consider its lifespan. TVs generally have only a certain number of hours in them (although the exact number can vary, and a TV can work well beyond its intended lifespan.) There is usually no way of knowing how much usage a used TV got. That is something you may want to factor into your value proposition if you are in the market.
Cost is more than just a price point that remains static over the years. Cost also considers important concepts such as value, inflation, time spent on unwanted content and activities, and value deterioration. As technology improves and often faster than we have ever experienced before, it can be challenging to determine the exact changes in a TV's cost over time.
That being said, we hope you have been able to get a clearer picture of how expensive TVs have and have not been over time and that this information can help you make better purchases in the future. There is always something new around the corner, and the market is ever-changing. We hope these are facts that can instill you with optimism instead of confusion.
