Featuring analysis from

  • IHS
  • DisplaySearch
  • &
  • Solarbuzz

Why Can’t Energy Efficiency Sell TVs?

For the TV industry, the low-hanging fruit has mostly been picked—the major markets have converted to flat panel sets, analog broadcasting has or will soon be over, and consumers are not upgrading to 40”+ and 50”+ sizes as quickly as set makers had expected. This is causing intense competition in what is becoming a commodity business. The low or negative profits that most set makers have been facing as a result has led them to search for ways to increase actual or perceived value to the consumer. This has mostly been evident in 3D, which for several reasons has not been as exciting to consumers as had been hoped.

However, set makers appear to be ignoring a key feature that not only would bring value to consumers, but also would allow set makers to increase prices. That feature is LED backlights for LCD TVs, which offer lower energy consumption, and thus lower operating costs for the TV. Quick calculations of energy costs using colleagues’ real utility bills show surprising payback times for buying a LED-backlit TV over CCFL. The payback time for an entry-level LED-backlit TV is under four years in California, and under two years in Europe!

Figure 1: Payback Time for Entry-level LED-backlit TV in Comparison to CCFL-backlit TVs

Source: DisplaySearch Q2’11 Quarterly TV Design and Features Report

Rather than highlighting this very real benefit to consumers, set makers appear to be complaining that LED backlights cost too much, and there is some sign that they are retreating from their bold plans to switch to LED.

On a recent trip to Asia, I took this up with various people in the industry, and the general reply was that consumers would be unable to understand the issue of energy consumption. This is an amazing lack of understanding, given that in markets like white goods, consumers routinely use energy consumption as a point of comparison. Furthermore, in the automotive market, 60% of premium cars sold in Europe are fueled by diesel, and the growth for autos in the US is for smaller, more economical vehicles. But looking at the marketing of TVs, one would think that all consumers care about is 3D. This is symptomatic of an industry that is removed from its end-customers. Our research shows that consumers are far more sensitive to power consumption than 3D. 

Figure 2: Consumer Consideration of 3D and Energy (Relative Scale)

 

Source: DisplaySearch Q2’11 Quarterly TV Design and Features Report

What frustrates me is that this is not a dinosaur industry making the wrong products (like Detroit building gas-guzzling vehicles in 1972) but simply a failure to present a message that consumers are receptive to. Instead, the message being presented is something irrelevant to their concerns. The longer this disconnect continues, the longer the business will be condemned to terrible margins.

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