Chambers wrote:
> I'm willing to bet that we could have converter boxes for <$20 right now
> if Congress hadn't come up with that coupon plan.
> 
> After all, if you know for a fact that every item you sell has a $40
> discount, doesn't it make sense to sell it for $40+x?

	Nope. Let's say that without the coupon program, the only way to be
profitable was to sell it at $45.

	Now you could just add $40 to the cost because of the coupons. But then
some competitor will offer it for only $60 - and ultimately you'll be
back to $45.

	Your analysis made the assumption that they *could* have been
profitable by selling it at less than $40 - an unsupported assumption.

-- 
Hard work pays off in the future. Laziness pays off now.


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                       >>>>>>mue### [at] nawazorg<<<<<<
                                   anl

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Chambers wrote:
> What's really (supposed to be) 
> happening on the 19th is that the analog signal will be switched off, 
> *not* that the digital signal will be switched on.

Yeah. Don't other people get to use the analog bandwidth, tho?

Anyway, I've probably been reading the opposite side of the propaganda that 
you have. Yours definitely makes more sense. :-)

-- 
   Darren New, San Diego CA, USA (PST)
   "Ouch ouch ouch!"
   "What's wrong? Noodles too hot?"
   "No, I have Chopstick Tunnel Syndrome."

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Mueen Nawaz wrote:
> 	Now you could just add $40 to the cost because of the coupons. But then
> some competitor will offer it for only $60 - and ultimately you'll be
> back to $45.

The potential flaw in this analysis is that there won't necessarily be that 
many of these boxes sold. Three years from now, people won't be buying 
converter boxes, so the back-and-forth on the pricing might not have time to 
settle as much as pure market forces might imply.

-- 
   Darren New, San Diego CA, USA (PST)
   "Ouch ouch ouch!"
   "What's wrong? Noodles too hot?"
   "No, I have Chopstick Tunnel Syndrome."

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Darren New <dne### [at] sanrrcom> wrote:
> Mueen Nawaz wrote:
> >  Now you could just add $40 to the cost because of the coupons. But then
> > some competitor will offer it for only $60 - and ultimately you'll be
> > back to $45.
>
> The potential flaw in this analysis is that there won't necessarily be that
> many of these boxes sold. Three years from now, people won't be buying
> converter boxes, so the back-and-forth on the pricing might not have time to
> settle as much as pure market forces might imply.

Still much better than my poor analysis.  There really are quite a few
manufacturers though, as well as a large enough demand to drive competition.
As of a year ago, sixteen million coupons had been redeemed, with an estimated
thirty-five million needed, in total.  Even with a variety in manufacturing
quality, I'm sure many people, who already don't care enough to have a
compatible TV, would just get the cheapest.  Perhaps it does just serve as a
lower bound on price so no one really undercuts the competition just hoping for
large enough volume as a result.  If the cost were $20, profit margins would
perhaps be narrow enough that only the largest companies could afford to enter
the ring, relying on huge volume.

 - Ricky

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On 2/14/2009 7:59 PM, Darren New wrote:
> Chambers wrote:
>> What's really (supposed to be) happening on the 19th is that the
>> analog signal will be switched off, *not* that the digital signal will
>> be switched on.
>
> Yeah. Don't other people get to use the analog bandwidth, tho?

That's the main problem - the FCC has already auctioned off that 
bandwidth, and now Congress is saying it's not going to be available for 
several months!

> Anyway, I've probably been reading the opposite side of the propaganda
> that you have. Yours definitely makes more sense. :-)

Our local paper has printed statements about the various stations in the 
area, and they're ALL planning on going ahead with the switch anyway. 
They way they put it, they would have made the switch *sooner* if they 
had been allowed.

I think it was PBS that said delaying the switch would cost them 
something like $40 million in electricity alone.  They are REALLY 
looking forward to the lower power requirements of digital broadcast :o

-- 
...Chambers
www.pacificwebguy.com

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On 2/14/2009 7:01 PM, Mueen Nawaz wrote:
> Chambers wrote:
>> I'm willing to bet that we could have converter boxes for<$20 right now
>> if Congress hadn't come up with that coupon plan.
>>
>> After all, if you know for a fact that every item you sell has a $40
>> discount, doesn't it make sense to sell it for $40+x?
>
> 	Nope. Let's say that without the coupon program, the only way to be
> profitable was to sell it at $45.

DTV has been around about as long as DVD players, and it looks like the 
converters will go away at about the same time as DVD players do (being 
replaced by BluRay and all).

Fully functional DVD players can be had for $20.  The converter boxes, 
lacking moving parts & a laser, *should* be even cheaper.  All you 
really need is a chip & a DAC.

Sure, they would have been quite expensive a few years ago, but by now 
they should be pretty cheap.  Looking online, however, the price has 
remained in the $50-$60 range for long enough that I'm certain the 
coupons have imposed an artificial floor on the price.

> 	Your analysis made the assumption that they *could* have been
> profitable by selling it at less than $40 - an unsupported assumption.

True, I'm not involved in the engineering of them, so I couldn't say. 
But, honestly, a dedicated-purpose CPU and a DAC?  I can't imagine it 
NOT being available for a lot less than it is.

-- 
...Chambers
www.pacificwebguy.com

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Chambers wrote:
> That's the main problem - the FCC has already auctioned off that 
> bandwidth, and now Congress is saying it's not going to be available for 
> several months!

Right. And all the people who installed equipment to use that bandwidth are 
now paying interest on it with no way to use it to make money to pay the 
interest. I guess that was the problem I heard about, misphrased by them or 
misunderstood by me.

> I think it was PBS that said delaying the switch would cost them 
> something like $40 million in electricity alone.  They are REALLY 
> looking forward to the lower power requirements of digital broadcast :o


Yeah. You look at some industries and don't realize how dinky some new 
industries like computer software really is. :-)

-- 
   Darren New, San Diego CA, USA (PST)
   "Ouch ouch ouch!"
   "What's wrong? Noodles too hot?"
   "No, I have Chopstick Tunnel Syndrome."

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Chambers wrote:
> Fully functional DVD players can be had for $20.  The converter boxes,

	That's because they're sold in *much* greater volumes.


-- 
(Ice rocks hit the hull)  "Captain, we are being hailed."


                    /\  /\               /\  /
                   /  \/  \ u e e n     /  \/  a w a z
                       >>>>>>mue### [at] nawazorg<<<<<<
                                   anl

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On 2/15/2009 10:55 AM, Darren New wrote:
> Chambers wrote:
>> That's the main problem - the FCC has already auctioned off that
>> bandwidth, and now Congress is saying it's not going to be available
>> for several months!
>
> Right. And all the people who installed equipment to use that bandwidth
> are now paying interest on it with no way to use it to make money to pay
> the interest. I guess that was the problem I heard about, misphrased by
> them or misunderstood by me.

My bad, I thought you were talking about the current TV stations 
installing new equipment :)

-- 
...Chambers
www.pacificwebguy.com

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Chambers wrote:
> My bad, I thought you were talking about the current TV stations 
> installing new equipment :)

I was, at the time. As I said, "misphrased by them or misunderstood by me." 
:-)  I.e., your explanation makes a lot more sense than what I thought 
others who described it were saying.

-- 
   Darren New, San Diego CA, USA (PST)
   "Ouch ouch ouch!"
   "What's wrong? Noodles too hot?"
   "No, I have Chopstick Tunnel Syndrome."

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