Blackfriars' Marketing

Tuesday, November 21, 2006

The marketing opportunity around sub-$1,000 Black Friday flat panels

Panasonic TH-42PX60U 42-inch plasma

One of the specials to get people into Best Buy stores early on Friday morning this week is Panasonic's TH-42PX60U, a very highly regarded 42-inch HDTV plasma TV, for $999. Similarly, Micro Center is offering no-brand 42-inch LCD HDTVs for $999 with a $200 mail-in rebate. Wal-Mart similarly has a Viore 42-inch plasma for $988.

So what? Well, people forget that PCs didn't really become common household items until they got below $1,000 in price. We might argue the same is true for flat-panel TVs. As 42-inch HDTV prices decline into three instead of four digit prices, we will undoubtedly see more consumers adopting them and pitching their older CRTs.

So who benefits from this shift? We've already seen that Best Buy, Circuit City, and other big box retailers have seen larger profits created by the consumer's love for all TVs flat. But cable, telephone, and satellite companies like Comcast, Verizon, and DirectTV who provide HDTV service should also see a bump in their service revenues, since they currently are the only providers of significant amounts of HDTV content.

My big question: why aren't Comcast, Time Warner, and Verizon striking bundled coupon deals with the HDTV manufacturers and big electronics retailers? No one wants an HDTV without HDTV signals to watch, yet when you look around your local Best Buy, offers for HDTV service are nowhere to be found (unless you count DirectTV). This is despite the fact that Best Buy does offer Comcast self-install high speed Internet service, for example.

Consumers want one-stop shopping, and hardware/service bundles are powerful marketing tools; just ask the cell phone providers. The HDTV service companies that create HDTV bundles have an opportunity to reshape this business as pricing becomes more and more cut-throat to capture consumer attention. The only question is who will step up to the opportunity first.



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