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Jan 20, 2024

The Hidden Cost of Cheap TVs

Screens have gotten inexpensive—and they’re watching you back. This article was

Screens have gotten inexpensive—and they’re watching you back.

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The television I grew up with—a Quasar from the early 1980s—was more like a piece of furniture than an electronic device. It was huge, for one thing: a roughly four-foot cube with a tiny curved screen. You couldn't always make out a lot of details, partially because of the low resolution and partially because we lived in rural Ontario, didn't have cable, and relied on an antenna. I remember the screen being covered in a fuzzy layer of static as we tried to watch Hockey Night in Canada.

This whole contraption was housed in a beautifully finished wooden box, implying that it was built to be an heirloom. The price implied the same. My parents don't remember what they paid for the TV, but it wasn't unusual for a console TV at that time to sell for $800, or about $2,500 today adjusted for inflation. That's probably why our family kept using the TV across three different decades—that, and it was heavy. It took three of us to move it.

TVs aren't like that anymore, of course. Like so many other gadgets, TVs over the decades have gotten much better, and much less expensive. But while, say, new cars are priced near where they were 10 years ago, in the same time frame TVs have gotten so much cheaper that it defies basic logic. For example, Reviewed.com's list of the best TVs of 2012 recommended a 51-inch plasma HDTV for $2,199 and a budget 720p 50-inch plasma for $800. I just found a 4K 55-inch TV, which offers a much higher resolution, at Best Buy for under $350. Even 85-inch 4K displays, which cost about $40,000 in 2013—yes, $40,000—can be yours for $1,300 in 2022.

Or take this chart from the American Enterprise Institute comparing the price, over time, of various goods and services. Most things, such as food and medical care, are up from 80 to 200 percent since the year 2000; TVs are down 97 percent, more than any other product. Why are TVs so much cheaper now?

Dirt-cheap TVs are counterintuitive, at first. For $800, you can get an 11-inch iPad Pro, then use it mostly to watch Netflix in bed; less than that amount of money can get you a 70-inch 4K television that you use mostly to watch Netflix on the couch. The difference is that an iPad, computer, or phone has a screen, yes, but that's not the bulk of what you’re paying for. TVs, meanwhile, are almost entirely screen. "A TV is a control board, a power board, a panel, and a case," Kyle Wiens, the CEO of iFixit, a company that sells tools and offers free guides for repairing electronic devices, including TVs, told me. "There isn't much secret sauce in there." He told me that the most expensive component in a modern television is the LED panel, and that TV manufacturers can buy those panels from third parties at lower prices than ever before because of improvements in the manufacturing process.

One of the biggest improvements is simply a large piece of glass. "TV panels are cut out of a really big sheet called the ‘mother glass,’" James K. Willcox, the senior electronics editor for Consumer Reports, told me. The ones today are huge, roughly 10 feet by 11 feet, and manufacturers have gotten more efficient at cutting that large piece into screens. "A few years ago you would have a lot of waste; now you can punch more screens out of that same mother glass," Willcox said. This, and various other improvements, can be thought of as a Moore's law for televisions: Over time, the companies that make components can dial down their manufacturing process, which drives down costs.

These developments affect most gadgets, of course, but the TV market has another factor that makes it different from the rest of tech: massive competition. Unlike in the smartphone market, which is dominated by a handful of big companies, low display prices allow more TV makers to enter the market: They just need to buy the display, build a case, and offer software for streaming. Newer companies such as TCL and Hisense "have taken a lot of market share in the past couple of years from more established brands," Willcox said. Basically, a new company trying to enter the U.S. market will do so by being cheaper than established companies such as Sony or LG, which forces those companies to also lower their prices.

But the story of cheap TVs is not entirely just market forces doing their thing. Perhaps the biggest reason TVs have gotten so much cheaper than other products is that your TV is watching you and profiting off the data it collects. Modern TVs, with very few exceptions, are "smart," which means they come with software for streaming online content from Netflix, YouTube, and other services. Perhaps the most common media platform, Roku, now comes built into TVs made by companies including TCL, HiSense, Philips, and RCA. But there are many more operating systems: Google has Google TV, which is used by Sony, among other manufacturers, and LG and Samsung offer their own.

Smart TVs are just like search engines, social networks, and email providers that give us a free service in exchange for monitoring us and then selling that info to advertisers leveraging our data. These devices "are collecting information about what you’re watching, how long you’re watching it, and where you watch it," Willcox said, "then selling that data—which is a revenue stream that didn't exist a couple of years ago." There's nothing particularly secretive about this—data-tracking companies such as Inscape and Samba proudly brag right on their websites about the TV manufacturers they partner with and the data they amass.

The companies that manufacture televisions call this "post-purchase monetization," and it means they can sell TVs almost at cost and still make money over the long term by sharing viewing data. In addition to selling your viewing information to advertisers, smart TVs also show ads in the interface. Roku, for example, prominently features a given TV show or streaming service on the right-hand side of its home screen—that's a paid advertisement. Roku also has its own ad-supported channel, the Roku Channel, and gets a cut of the video ads shown on other channels on Roku devices.

This can all add up to a lot of money. Roku earned $2.7 billion in 2021. Almost 83 percent of that came from what Roku calls "platform revenue," which includes ads shown in the interface. And Roku isn't the only company offering such software: Google, Amazon, LG, and Samsung all have smart-TV-operating systems with similar revenue models.

This all means that, whatever you’re watching on your smart TV, algorithms are tracking your habits. This influences the ads you see on your TV, yes, but if you connect your Google or Facebook account to your TV, it will also affect the ads you see while browsing the web on your computer or phone. In a sense, your TV now isn't that different from your Instagram timeline or your TikTok recommendations. There's an old joke: "In America, you watch television; in Soviet Russia, television watches you!" In 2022, TVs track your activity to an extent the Soviets could only dream of. But hey, at least that television is really, really cheap.

Read: The rise of ‘luxury surveillance’

TVs aren't furniture anymore—no major TV brand is going to hire American workers to build a modern screen into a beautifully finished wooden box next year. The television is just another piece of tech now, for better or for worse. Don't get me wrong; watching Netflix on a big screen is superior in every way to watching network TV in the 1990s, and it's also a lot cheaper. That's amazing.

But there are downsides. Willcox told me that the average consumer replaces their TV every seven to eight years, which is adding to the roughly 2.7 million tons of e-waste we produce annually. What was an American-made heirloom is now, generally, a cheaply manufactured chunk of plastic and glass—one that monitors everything you do in order to drive down its price even lower. In that way, cheap TVs tell the story of American life right now, almost as well as the shows we watch on them.