Fun Fact of the Day: Flat Panel Prices Plummet

by on July 19, 2006 · 10 comments

From a story in today’s USA Today:

“A year ago, a 37-inch flat-panel model typically cost about $4,000. Now, some can be found for as little as $1,100, says television analyst Rosemary Abowd at Pacific Media Associates. From January to May, the most recent data available, average flat-panel prices tumbled more than 12%, she says.”

While this is stunning to me, it’s not nearly as amazing as the fact that, just a few years ago, most 40+ inch plasmas were going for over $10,000 bucks and couldn’t be found in most “big box” electronic retail stores. You had to go to high-end A/V shops to get them. Today, by contrast, when you walk into Best Buy and Circuit City and are surrounded by walls full of flat-panel displays, many of which are dipping below the $2000 price point as the USA Today story suggests.

We’ve seen the same thing happen with other high-end electronics too, like progressive DVD players and surround sound receivers. I heard the other day that Circuit City is now going to be carrying Denon products, one the best names in the business of consumer electronics and previously only available at very high-end establishments. (I own a killer Denon upscaling DVD player that plays all my surround sound audio discs as well. I love it. Until you’ve heard Pink Floyd and The Flaming Lips in 5.1 surround, you haven’t lived life to the fullest!) Meanwhile, Best Buy now has their “Magnolia” mini-stores within many of their branches that cater to the truly high-end customers. They carry many of the high-end products I use in my home including my incredible Yamaha VX2600 surround sound receiver.

As a result, DVD players and A/V receivers that used to cost a month’s salary can now be had for a couple hundred bucks. Just amazing when you think about it. I have a closet full of “retired” consumer electronics gear that is now just gathering dust. It just makes me sick to think what I spent on all that stuff considering that the gear I’ve got in my living room now cost thousands less and provides a vastly superior audio and video experience.

(No policy angle to all this. I’m just consistently amazed by the wonders of capitalism.)

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About Adam Thierer

Adam Thierer is a senior research fellow at the Mercatus Center at George Mason University. He previously served as President of The Progress & Freedom Foundation, as Director of Telecommunications Studies at the Cato Institute, and as a Fellow in Economic Policy at the Heritage Foundation. He is the author or editor of six books on technology and media policy and also writes a weekly column for Forbes called "Technologies of Freedom." Thierer earned his bachelor's degree in political science and journalism at Indiana University and received his master's degree in international business management and trade theory at the University of Maryland. His passions in life (besides technology and liberty, of course) are fast cars, fine cigars, and good beer.

Read more articles by Adam Thierer.

  • Steve R.

    My hope is that the massive acquisition by consumers of flat panel displays will cause those seeking the imposition of proprietary DRM technologies to give up. Can you imagine the consumer outcry if there expensive and newly purchased equipment turns out to be “obsolete” and won’t work with other technologies such as HDDVDs. If that happens capitalism will have worked. I am glad that the sale of flat panel monitors has taken off and that the prices are plummeting.

    Regretfully, this is not an example of the “wonder of capitalism at work”. The introduction of this technology has been frustrated by over eight years of bickering between companies seeking proprietary control over how the consumer will use this technology.

    1. It is my understanding that these TVs were initially sold without tuners so that the cable companies would be able (force you) to rent you a cable box. Consumers may have avoided buying flat panels for this reason. Thus “chilling” the sale of flat panel TVs.

    2. Toshiba and Sony have been having a format war concerning the introduction of the next generation DVD (HDDVD). To a degree the availability of these HDDVDs is necessary to promote the sale of flat panel TVs. The release of HDDVDs has been delayed by eight years because of this bickering. Again the sale of flat panel HDTVs may have been “chilled”.

    3. For the past year I have been reading about the content industry’s sponsored imposition of DRM technologies onto flat panel monitors and TVs. Apparently those wishing to impose it, do not have it ready for prime time. Fortunately, rather than continuing to wait, the manufactures of flat panels displays have now gone ahead and released the flat panels into the consumer market. Addtitionally it appears that the cable companies have gone ahead and started to release HDTV content thus stimulating sales.

    As a humorous aside on private industry versus government capabilities, Larry Kudlow on his show lambasted government for not getting voting machines to work. Obviously implying that private industry could do it better. A little later in his show, he announced that the poll for that night’s show would not be available due to technical problems!!!

    My hope is that the massive acquisition by consumers of flat panel displays will cause those seeking the imposition of proprietary DRM technologies to give up. Can you imagine the consumer outcry if there expensive and newly purchased equipment turns out to be “obsolete” and won’t work with other technologies such as HDDVDs. If that happens capitalism will have worked.

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    My hope is that the massive acquisition by consumers of flat panel displays will cause those seeking the imposition of proprietary DRM technologies to give up. Can you imagine the consumer outcry if there expensive and newly purchased equipment turns out to be “obsolete” and won’t work with other technologies such as HDDVDs. If that happens capitalism will have worked.
    I am glad that the sale of flat panel monitors has taken off and that the prices are plummeting.

    Regretfully, this is not an example of the “wonder of capitalism at work”. The introduction of this technology has been frustrated by over eight years of bickering between companies seeking proprietary control over how the consumer will use this technology.


    1. It is my understanding that these TVs were initially sold without tuners so that the cable companies would be able (force you) to rent you a cable box. Consumers may have avoided buying flat panels for this reason. Thus “chilling” the sale of flat panel TVs.


    2. Toshiba and Sony have been having a format war concerning the introduction of the next generation DVD (HDDVD). To a degree the availability of these HDDVDs is necessary to promote the sale of flat panel TVs. The release of HDDVDs has been delayed by eight years because of this bickering. Again the sale of flat panel HDTVs may have been “chilled”.


    3. For the past year I have been reading about the content industry’s sponsored imposition of DRM technologies onto flat panel monitors and TVs. Apparently those wishing to impose it, do not have it ready for prime time. Fortunately, rather than continuing to wait, the manufactures of flat panels displays have now gone ahead and released the flat panels into the consumer market. Addtitionally it appears that the cable companies have gone ahead and started to release HDTV content thus stimulating sales.



    As a humorous aside on private industry versus government capabilities, Larry Kudlow on his show lambasted government for not getting voting machines to work. Obviously implying that private industry could do it better. A little later in his show, he announced that the poll for that night’s show would not be available due to technical problems!!!



    My hope is that the massive acquisition by consumers of flat panel displays will cause those seeking the imposition of proprietary DRM technologies to give up. Can you imagine the consumer outcry if there expensive and newly purchased equipment turns out to be “obsolete” and won’t work with other technologies such as HDDVDs. If that happens capitalism will have worked.

  • Adam Thierer

    You’re making a lot of unsubstantiated statements in your little anti-market diatribe.

    You begin by stating that “The introduction of this technology has been frustrated by over eight years of bickering between companies seeking proprietary control over how the consumer will use this technology.” What in the heck are you talking about? First of all, which technology are you talking about? Flat-panels? If so, what “proprietary control” are you talking about? This is a very open, competitive market as is witnessed by the consistently falling prices and constant improvements in set resolution, connections and options.

    Next you argue that “these TVs were initially sold without tuners so that the cable companies would be able (force you) to rent you a cable box. Consumers may have avoided buying flat panels for this reason. Thus “chilling” the sale of flat panel TVs.” Huh? Most older flat-panel sets were sold without tuners for two obvious reasons: (1) The manufacturers knew this would add hundreds of dollars to the costs of the sets and (2) there was no reason to ask everyone to pay more for sets with tuners when 85% percent of homes subscribe to cable or satellite TV and get their over-the-air broadcast signals that way. So there’s no conspiracy here; just sound economics: Most people don’t need the tuners and don’t want to pay any more for the sets than is necessary.

    Then you say that the high-def format war (a) has delayed the release of the format by 8 years; and (b) may have “chilled” flat-panel sales as a result. Wrong. The high-def DVD formats weren’t even around 8 years ago. Hell, 480p resolution DVD was just getting its wings 8 years ago! No one was thinking about anything higher than that at the time because they didn’t even have convenient, affordable storage format for massive HD files like that and millions of homes were still perfectly happy with the old VCRs at the time. Again, no conspiracy to be found here.

    Next you say that you “have been reading about the content industry’s sponsored imposition of DRM technologies onto flat panel monitors and TVs.” Really? Send me what you’ve been reading because that’s news to me. Are you talking about the Image Constrain Token (ICT) in next-gen high-def DVDs? If so, that’s something totally different. It’s true that if the content company flipped the ICT in their HD-DVD that some of the inputs on your set might not be able to see the highest resolution available on those DVDs, but no one is imposing any DRM technologies in flat panel monitors in the way you suggest. And even if the content companies flipped the ICT (something they would be foolish to do if they want to build sales of next-gen DVDs) you’d still be able to see the movie in traditional current-gen 480p DVD resolution.

    You then imply that “it appears that the cable companies have gone ahead and started to release HDTV content thus stimulating sales” as if to say they haven’t had anything on until just recently. Well, they certainly have more out there now than ever before, but I’ve been getting HD signals from satellite and cable providers since 1999. They’ve been steadily pushing stuff out, but a lot of the most popular cable networks have only recently started making a true HD conversion. ESPN, Discovery and HBO blazed the trail on this front a few years ago, and now other popular channels like Showtime, MTV and TNT are starting to beef up their offerings as well. But, for whatever reason, a lot of viewers don’t place as much of a premium on HDTV as media producers and distributors had hoped. Thus, lacking clear demand and a steady revenue stream from HD content and channels, the transition hasn’t been as rapid as some of us had hoped it would be. But don’t try to lay all the blame for this on the market. Consumer demand for true high-def material lags behind. And much of the demand for flat-panels has been generated by current generation DVDs instead as well as simple convenience of being able to hang the TV up on the wall. I don’t pretend to understand why some consumers don’t want more than that, but it’s just the way things are right now. Witness the fact that many consumers still purchase “enhanced definition” televisions (EDTVs) which are only capable of 480p resolution, not 720p or higher like true HDTVs.

    I hope this clears up some of the misperceptions or misinformation in your mind and in your piece.

  • Adam Thierer

    You’re making a lot of unsubstantiated statements in your little anti-market diatribe.

    You begin by stating that “The introduction of this technology has been frustrated by over eight years of bickering between companies seeking proprietary control over how the consumer will use this technology.” What in the heck are you talking about? First of all, which technology are you talking about? Flat-panels? If so, what “proprietary control” are you talking about? This is a very open, competitive market as is witnessed by the consistently falling prices and constant improvements in set resolution, connections and options.

    Next you argue that “these TVs were initially sold without tuners so that the cable companies would be able (force you) to rent you a cable box. Consumers may have avoided buying flat panels for this reason. Thus “chilling” the sale of flat panel TVs.” Huh? Most older flat-panel sets were sold without tuners for two obvious reasons: (1) The manufacturers knew this would add hundreds of dollars to the costs of the sets and (2) there was no reason to ask everyone to pay more for sets with tuners when 85% percent of homes subscribe to cable or satellite TV and get their over-the-air broadcast signals that way. So there’s no conspiracy here; just sound economics: Most people don’t need the tuners and don’t want to pay any more for the sets than is necessary.

    Then you say that the high-def format war (a) has delayed the release of the format by 8 years; and (b) may have “chilled” flat-panel sales as a result. Wrong. The high-def DVD formats weren’t even around 8 years ago. Hell, 480p resolution DVD was just getting its wings 8 years ago! No one was thinking about anything higher than that at the time because they didn’t even have convenient, affordable storage format for massive HD files like that and millions of homes were still perfectly happy with the old VCRs at the time. Again, no conspiracy to be found here.

    Next you say that you “have been reading about the content industry’s sponsored imposition of DRM technologies onto flat panel monitors and TVs.” Really? Send me what you’ve been reading because that’s news to me. Are you talking about the Image Constrain Token (ICT) in next-gen high-def DVDs? If so, that’s something totally different. It’s true that if the content company flipped the ICT in their HD-DVD that some of the inputs on your set might not be able to see the highest resolution available on those DVDs, but no one is imposing any DRM technologies in flat panel monitors in the way you suggest. And even if the content companies flipped the ICT (something they would be foolish to do if they want to build sales of next-gen DVDs) you’d still be able to see the movie in traditional current-gen 480p DVD resolution.

    You then imply that “it appears that the cable companies have gone ahead and started to release HDTV content thus stimulating sales” as if to say they haven’t had anything on until just recently. Well, they certainly have more out there now than ever before, but I’ve been getting HD signals from satellite and cable providers since 1999. They’ve been steadily pushing stuff out, but a lot of the most popular cable networks have only recently started making a true HD conversion. ESPN, Discovery and HBO blazed the trail on this front a few years ago, and now other popular channels like Showtime, MTV and TNT are starting to beef up their offerings as well. But, for whatever reason, a lot of viewers don’t place as much of a premium on HDTV as media producers and distributors had hoped. Thus, lacking clear demand and a steady revenue stream from HD content and channels, the transition hasn’t been as rapid as some of us had hoped it would be. But don’t try to lay all the blame for this on the market. Consumer demand for true high-def material lags behind. And much of the demand for flat-panels has been generated by current generation DVDs instead as well as simple convenience of being able to hang the TV up on the wall. I don’t pretend to understand why some consumers don’t want more than that, but it’s just the way things are right now. Witness the fact that many consumers still purchase “enhanced definition” televisions (EDTVs) which are only capable of 480p resolution, not 720p or higher like true HDTVs.

    I hope this clears up some of the misperceptions or misinformation in your mind and in your piece.

  • Steve R.

    I agree that what I have stated is unsubstantiated opinion. It is based on articles/discussions/whatever, some of which is I can barely remember. Unfortunately, I also was not in a position to spend too much time looking up citations. So your critisms are valid.

    Nevertheless, while capitalism is a good, companies for obvious reasons don’t advertise (publicly disclose) customer manipulation. For example Cingular has been sued for duping its AT&T customers. Tim Lee has been running articles on ridicules patent lawsuits, one of which is against Kaleidescape. Ed Felten has discussions on “plugging the analog hole. I did a quick search on Cnet where I found a couple of usable sound bites to quote. The title of the article is “Forrester: Blu-ray winning drawn-out format war”. This article notes that it will still be another two years before consumers will be comfortable about buying the new generation HDDVDs. Additionally, the Cnet article states “But unless the HD DVD camp throws in the towel–a move Schadler recommended–the victory will be slow in coming. “Consumers will postpone a decision until the winner is obvious.”. Also PCWorld” reported: “If you dropped a bundle on a high-end computer display or HDTV, you could be in for an unpleasant surprise when you slip your new high-definition DVD of Star Wars: Episode III into your Windows Vista PC.”

    The Electronic Frontier Foundation has a good summary: “Rather than focusing on pirates, many copyright owners have wielded the DMCA to hinder their legitimate competitors. For example, the DMCA has been used to block aftermarket competition in laser printer toner cartridges, garage door openers, and computer maintenance services. Similarly, Apple invoked the DMCA to chill RealNetworks’ efforts to sell music downloads to iPod owners.”

    Your article is significant in that it illustrates that we have achieved a “critical mass” where flat panel displays are flooding the consumer market. My hope is that that the market has accelerated to the point that those who wish to impose DRM technolgies have been made “irrelevent”.

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    I agree that what I have stated is unsubstantiated opinion. It is based on articles/discussions/whatever, some of which is I can barely remember. Unfortunately, I also was not in a position to spend too much time looking up citations. So your critisms are valid.



    Nevertheless, while capitalism is a good, companies for obvious reasons don’t advertise (publicly disclose) customer manipulation. For example Cingular has been sued for duping its AT&T; customers. Tim Lee has been running articles on ridicules patent lawsuits, one of which is against Kaleidescape. Ed Felten has discussions on “plugging the analog hole. I did a quick search on Cnet where I found a couple of usable sound bites to quote. The title of the article is “Forrester: Blu-ray winning drawn-out format war”. This article notes that it will still be another two years before consumers will be comfortable about buying the new generation HDDVDs. Additionally, the Cnet article states “But unless the HD DVD camp throws in the towel–a move Schadler recommended–the victory will be slow in coming. “Consumers will postpone a decision until the winner is obvious.”. Also PCWorld” reported: “If you dropped a bundle on a high-end computer display or HDTV, you could be in for an unpleasant surprise when you slip your new high-definition DVD of Star Wars: Episode III into your Windows Vista PC.”


    The Electronic Frontier Foundation has a good summary: “Rather than focusing on pirates, many
    copyright owners have wielded the DMCA
    to hinder their legitimate competitors. For
    example, the DMCA has been used to block
    aftermarket competition in laser printer
    toner cartridges, garage door openers, and
    computer maintenance services. Similarly,
    Apple invoked the DMCA to chill
    RealNetworks’ efforts to sell music
    downloads to iPod owners.”



    Your article is significant in that it illustrates that we have achieved a “critical mass” where flat panel displays are flooding the consumer market. My hope is that that the market has accelerated to the point that those who wish to impose DRM technolgies have been made “irrelevent”.

  • eric

    Flat panel monitors are neat, and I guess they are cooler to run. Will they be as durable? I am still using a Panasonic TV I bought in 1982, and one of my computers has an ancient 15″ NEC monitor that still runs just fine.

    Time will tell, I guess.

  • eric

    Flat panel monitors are neat, and I guess they are cooler to run. Will they be as durable? I am still using a Panasonic TV I bought in 1982, and one of my computers has an ancient 15″ NEC monitor that still runs just fine.

    Time will tell, I guess.

  • Steve R.

    I did a bit more research, but didn’t find much. The closest match I was able to find concerned an initial opposition by the cable industry to the use of a CableCard. See The Politics of the Transition to Digital Television by Jeffrey A. Hart. Mr. Hart wrote:The cable operators resisted the CableCard initially because they thought it would reduce their ability to realize the revenues associated with proprietary features they planned to build into their next-generation set-top boxes.

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    I did a bit more research, but didn’t find much. The closest match I was able to find concerned an initial opposition by the cable industry to the use of a CableCard. See
    The Politics of the Transition to Digital Television     by Jeffrey A. Hart. Mr. Hart wrote:The cable operators resisted the CableCard initially because they thought it would reduce their ability to realize the revenues associated with proprietary features they planned to build into their next-generation set-top boxes.


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