Posts Tagged ‘Netflix’

Interview with a Cord-Cutter – Pete Putman

My son, Ross Putman, has lived in Los Angeles since 2008. Like many members of the Millennial generation, he’s always looking for a way to cut costs and get a better deal. Also like other Millennials, he’s proficient in using computers and the Internet.

Recently, Ross decided that his monthly charges for broadband and TV service were becoming unbearable, so he decided to “cut the cord” and switch to streaming video, plus free, over-the-air HDTV programs. I pitched in to help by shipping him a Mohu Leaf Plus indoor TV antenna (about $75). This model has scored consistently well in my antenna tests.

Now that the changes have been made and the antenna is in place, how is his cord-cutting experiment going? Ross was kind enough to answer a few questions about the process, and I’ll share them here.

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PP.  Who was your cable TV service provider originally?

A. Our service provider was Time Warner Cable, SoCal.  We had the basic package with standard broadband internet, an HD DVR, and no premium channels.  It cost $90/month for the first year, as part of a promotional deal.  When that period ended, the price skyrocketed to $140.

PP. What were your viewing habits? What channels did you watch on a regular basis? About how many hours a week did you watch? How many were ‘premium?’

A. We realized fairly quickly that we only watched AMC (for Mad Men and Breaking Bad), Comedy Central (we would DVR the Colbert Report nightly), FX (literally just to watch Louis C.K.), and IFC to watch Portlandia, as well as the odd movie here and there.  I watch football, which is on network channels anyways, and sometimes we would turn on the TV just to have it in the background.  But on the whole, our habits were fairly limited, especially considering the price we were paying.

PP. What made you decide to drop cable TV channel service?

A.  We decided to drop cable after our bill skyrocketed and we did the math: All the shows we love are available the next day for $1.99/episode on Amazon Streaming.  If there are four episodes a month while the series is on, that’s a little under $8/month for our favorite shows.  So even if we’re watching three shows at a time (which is really the max), that’s $24/month for the programming we want, plus our subscriptions and $40/month for cable internet, which we still get through Time Warner.  Hulu and Netflix are $16/month total, so that means we’re paying a maximum of $80 instead of $140 and still get to watch all the programming we love.  Sometimes, that number is as low as $60.

PP. How do you get channels now? Do you stream to a Blu-ray player, or a dedicated receiver, like Roku or Apple TV?

A. We now use a Roku for streaming and have subscriptions to Netflix, Amazon Prime, and Hulu Plus.  Even with all this, it’s still only $80/month at the peak for programming, plus all the additional things we get through Hulu– for example, Comedy Central shows like Colbert, which we watch, are streaming for free the next day.  We have a Blu-Ray player, though we canceled our disc service from Netflix and generally “rent” movies off Amazon Prime (which tend to range between free and $2.99 apiece) when we want to watch them.  Our broadband service still comes from Time Warner Cable.

PP. Do you time-shift at all? Do you stream video over other devices, such as computers, tablets, and/or phones?

A. We no longer time-shift, which isn’t a problem since we don’t watch network television.  All our cable shows are on Amazon or Hulu. As for streaming on other devices, we don’t have the time in our busy schedules to do so, but we own a Kindle Fire and an iPhone.

PP. Which over-the-air channels do you watch on a regular basis?

A. We only watch over the air for football.  NBC, CBS, and Fox.

PP. Which streaming services do you use?

A. We use Netflix, Amazon Prime, Hulu Plus, and Crackle to stream video.

PP. How often do you watch movies? Do you watch them on DVD or Blu-ray? Do you stream them?

A. We got to the movies more than we watch them at home, though I’m probably an outlier since I work in the industry.  We watch a movie maybe once a week, almost always on some streaming device.  We either watch what’s free on Netflix, or we pay for it on Amazon (generally $2.99). No discs.

PP. How satisfactory is your new selection of channels and the quality and reliability of Internet streaming?

A. While we miss the cable channels a bit, we’ve made sure we have access to all our favorite shows.  Our internet and streaming are both very reliable, and our antenna picks up all channels available perfectly. (Editor’s note: The actual total is 27 major channels and over 130 minor channels.)

PP. What would you say about the overall experience of cord-cutting compared to previous cable TV viewing, and how much money has it saved you?

A. After cutting the cord, we realized how little TV we actually watched.  Many times, we’d just turn on the TV “to have it on,” rather than to watch something specific.  For the most part, we lost nothing by cutting the cord.  We’re still able to watch our favorite shows on a pay-per-view basis, and network TV covers my main category: Sports.  We’re saving somewhere between $20 and $50/month, which really adds up over a whole year.  We don’t really miss it.  Worst case scenario, we go over to a friend’s house to watch things, which is more social and enjoyable anyway.  That’s what we did with the Breaking Bad season finale. Until Apple TV starts offering channels a la carte, this seems like the way to go.

 

This article also appears on the Display Central Web site.

Nothing Lasts Forever

Earlier this week at an investor conference sponsored by UBS in New York City, the chief executive of Liberty Media decried the rising cost of sports programming on pay television. And he may have inadvertently lifted the cover on Pandora’s Box by doing so.

 

Greg Maffei was quoted in the Wall Street Journal as saying that the average $4.69 per household subscription fee for ESPN and all of its affiliated networks amounted to “a tax on every American household” and asked, “what happens to the bundle of cable if you keep pushing [the price] higher and higher?”

 

He’s not alone in wondering if Americans are reaching the breaking point with ever-escalating costs of pay television. There is no question that a small segment of the population is disconnecting from pay TV services and opting instead to keep broadband connections only. This movement is 100% driven by cost – the average tab for a digital TV package of channels, voice over IP, and broadband now exceeds $150 on many cable systems. That’s $1,800 a year!

 

To put things in perspective, the average subscription (retransmission) fee for cable networks is about what it costs you to park for an hour at a meter – 26 cents.

 

Viacom’s CEO Philippe Dauman also put the spotlight directly on ESPN for driving pay TV costs through the roof. He stated that ESPN by itself in many systems costs twice as much as of all their own networks combined.

 

The problem with rising costs for ESPN is that it usually comes as part of a bundle. Yet, many American viewers have little or no interest in sports programming, at least not to the extent that they need a 24/7 ‘fix’ of scores, talk shows, and specials.

 

Those rising charges are driven mostly by deals that ESPN has negotiated directly with major sports leagues. For example, the Bristol, CT-based network has also managed to get exclusive broadcast rights to the major college football bowl games (the Bowl Championship Series), taking them away from their traditional homes on free broadcast networks.

 

More than one pay TV system operator has speculated out loud that sports channels could soon migrate to premium tiers instead of being bundled with basic or extended digital channel packages. That would in turn allow pay TV MSOs to lower prices on TV channel packages, which are increasingly seen by futurists as ‘obsolete’ with the increased penetration of high-speed Internet access, the use of DVRs, and the growth in streaming services like Netflix.

 

Until the past year or so, cable and satellite TV executives were mum on the issue of ever-escalating monthly service charges. Now, one of the culprits has been called out, and it will be interesting to see if MSOs will make noise about moving ESPN and other costly sports networks like Fox to add-on tiers where HBO and Showtime currently reside.

 

In the meantime, you can still watch plenty of sports for free over the air, including (but not limited to) NFL games on CBS, Fox, and NBC, major league baseball on Fox and local stations, the NBA finals on ABC, college football on CBS, NBC, and ABC, golf and tennis on all the major channels, the NCAA basketball men’s and women’s tournaments and selected games on CBS and ABC, and of course next year’s Olympics on NBC.

 

Enjoy them while you still can…

The Times They Are A-Changin’

Today is Bob Dylan’s 70th birthday. Whether you like the man’s music or not, there can be no argument that it has had a profound impact on countless artists and bands ever since his first album was released 49 years ago.

 

One of my favorite Dylan tunes is the aforementioned “Times,” and it couldn’t be more appropriate in 2011. The world of media distribution is turning on its head, thanks to the Internet and digital technology.

 

Consider these recent stories. At a meeting of the Telecommunications Industry Association (TIA) last week in Dallas, FCC Chairman Julius Genachowski emphatically stated that there is no need for further debate on the topic of spectrum shortages. Quote: “Any objective observer would have to say that the spectrum crunch debate has been put to rest.”

 

Genachowski, of course, has been advocating that TV broadcasters give up yet another chunk of their spectrum that would be re-assigned for wireless broadband services (something TIA members like Verizon and AT&T are salivating over).

 

Obviously Genachowski feels that the importance of free, over-the-air television has greatly diminished, and that ‘broadband for everybody’ should be the modus operandi going forward, using ‘voluntary’ spectrum auctions to free up UHF TV channels for his pet project.

 

Aside from some technical reasons why using UHF TV channels for wireless broadband isn’t a good idea, Genachowski is clearly overlooking other spectrum that could just as easily be put to the same purpose, such as the 800 MHz analog cellular phone band. (Betcha didn’t know those channels were still in use!) Or, how about the hundreds of MHz reserved exclusively for government use? A 120-MHz bite out of that would hardly be noticed.

 

The point, however, is that Genachowski feels the availability of free digital TV (and free HDTV, I should add) isn’t nearly as important as having broadband access to Netflix streaming, or to eBay auctions, or to the Huffington Post, or to ESPN.com.

 

And that is a sea change in the thinking of the FCC from 1934, when it was created from the old Federal Radio Commission to ‘regulate the airwaves in the public interest,’ to 2009 when the digital TV transition was complete, and the FCC had largely devolved into a glorified spectrum auction house.

 

Wireless isn’t the only place where the old order of media distribution is under siege. Two recent reports from the Digital Entertainment Group and SNL Kagan clearly show that America’s love affair with the DVD is over, and that more and more households are embracing a ‘cloud’ model for accessing and watching movies and TV shows.

 

Kagan’s study revealed that wholesale revenue from DVDs (not Blu-ray discs) in 2010 dropped almost 44% from 2009, even though 2010 was a decent year at the box office. This decline in DVD sales has been evident for nearly six years now, and is picking up speed – Kagan calculates that the annual compound negative growth rate for DVD revenue is over 13% in the past five years.

 

Granted, DVD rental income from $1-per-night kiosks was up last year, and video-on-demand (including Netflix streaming) is in a strong growth mode. Even so, overall consumer spending on entertainment declined almost 11% in 2010, and that’s nothing to sneeze at.

 

The important thing to note here is that streaming is growing by leaps and bounds. As you’ve probably read elsewhere, Netflix now has more subscribers than Comcast (over 23 million). And Netflix streaming is largely what’s driving sales of connected Blu-ray players, not sales and rentals of Blu-ray discs. There’s that ‘cloud’ thing, again!

 

The problem with Netflix streaming is that the revenue that goes back to Hollywood studios doesn’t even come close to replacing the cash cow that DVDs once represented. And that drop-off in revenue will definitely be a sticking point when each studio’s contracts with Netflix are renegotiated in t near future.

 

On the hardware side of things, we’re seeing an accelerating shift away from traditional notebook computers to touchscreen tablets and eBook readers. A recent news story stated that women, who generally read more books than men, are flocking to Barnes & Nobles’ color Nook reader and are also reading more magazines than ever before on said reader.

 

That fact, plus the embedded but largely hidden Android OS that has the potential to turn the Nook into a full-blown media tablet, may be the reason why John Malone’s Liberty Media is making a play for Barnes & Noble. Last Thursday, Malone’s company announced a $1B offer for 70% of the company. The bid price is about $17 per share, which represents a 20% premium over the current stock price.

 

Why would Malone, who made his fortune in the cable TV business, want to own the largest bookseller in the United States? Because he can deliver all sorts of content – print or otherwise – directly to Nooks through a ‘cloud’ structure. (And he might need some of those UHF TV frequencies to do it!)

 

There you have it. TV and movies everywhere, anytime (just not on optical discs). A media center in your coat pocket. Cloud servers set up by everyone from Amazon to Apple. Wireless broadband access to everything, even if it means you have to pay Verizon and AT&T to watch TV programs, over the air, with an antenna. And the increasing likeliness that you will have to pay to watch HDTV content, wherever it comes from.

 

The times, they are indeed a-changin’…

NAB 2011: It’s All About Streaming, Displays, and Connectivity

With each passing year, NAB looks less and less like a broadcaster’s show and more like a cross between CES and InfoComm. It’s a three-ring circus of product demos, panel discussions, conferences, and media events that all points to the future of ‘broadcasting’ as being very different than what it was at the end of the 20th century.

 

Officially, slightly less than 90,000 folks showed up to walk the floors of the Las Vegas Convention Center, and it was elbow-to-elbow in some exhibits. But there was another trend of smaller booths for the ‘big name’ exhibitors like Panasonic and JVC.

 

That reflects the reality of selling products that have mostly three and four zeros in their price tags. At my first NAB in 1995, it wasn’t unusual to see $50,000 cameras and $80,000 recorders. Now, you can buy some pretty impressive production cameras for about $5,000.

 

Streaming and over-the-top video was big this year. Ironically, NAB featured an enormous streaming media pavilion back in 1999, but it vanished the next year. The reason? A lack of broadband services across the country that could support streaming at reasonable bit rates.

 

Obviously, that’s all changed now, what with Netflix at 21 million subscribers and climbing, and MSOs deploying multi-platform delivery of video and audio to a plethora of handheld devices. Concurrently, the broadcast world is trying to roll out a new mobile handheld (MH) digital TV service to stand-along portable receivers and specially-equipped phones.

 

And behind all of this, the FCC continues to make noise that it wants to grab an additional 100 – 120 MHz of UHF TV spectrum to be repurposed for wireless broadband, a service you’ll have to pay for. Attendees had mixed thoughts on whether the Commission will actually be able to pull this off – there is some opposition in Congress – but there appeared to be a high level of opposition to the plan, considering there is plenty of other spectrum available for repurposing, much of it already used exclusively for government and military purposes.

 

Like last year, there were lots of 3D demos, but the buzz wasn’t really there. 3D still has a ways to go with its roll-out and it simply can’t compete with the interest in content delivery to smart phones, tablets, and other media players. Still, there were some cool 3D products to be found here and there.

 

Here are some of the highlights from the show.

Is that an MH receiver in your pocket, or are you just glad to watch DTV?

ATSC MH Pavilion – several companies exhibited a range of receivers for the MH services being transmitted during the show from Las Vegas TV stations and low-power rigs in the convention center. LG and RCA both showed some snazzy portable MH receivers, with LG’s exhibit putting the spotlight on autostereo 3D MH (as seen at CES) and a service call ‘Tweet TV’ which would allow viewers to comment on shows they’re watching and have those tweets appear on their MH receiver.

 

Another demo had CBS affiliate KLAS-DT transmitting electronic coupons for local retailers and restaurants during the show. These showed up on a prototype full-touch CDMA smart phone with a 3.2” HVGA screen.

 

In a nearby booth, RCA unveiled a lineup of hybrid portable DTV receivers. There are two 3.5” models (DMT335R, $119, and DMT336R, $159), a 7” version (DMT270R, $179), and a pocket car tuner/receiver that connects to an existing car entertainment center. It will sell for $129.

Believe it or not, this was a commercial for Coca-Cola.

Motorola had two intriguing demonstrations. The first showed full-bandwidth 3D content distribution, using the full 38.8 Mb/s bandwidth of a 256 QAM channel to transport frame-packed 1080p video with full 1920×1080 left eye and right eye images, encoded in the MPEG4 H.264 format and sequenced through active shutter glasses.

 

Nearby, an HD video stream was encoded for four different displays, with all four signals carried simultaneously in the same bit stream. First up was a 1080p/60 broadcast; next to that a 720p/60 version, followed by a standard definition version (480i) and a version sized for a laptop computer or tablet. Both MPEG2 and MPEG4 codecs were used.

 

Red Rover attracted quite a crowd with their 28″ 4K (3840×2160) 3D video monitor which uses two 4K LCD panels arranged at 90-degree angles to each other (one on top, facing down). A half-mirror with linear polarization is used to combine the left and right eye images for passive viewing. Both LCD panels are Samsung vertically-aligned models, and the whole works will sell for (ready for this?) $120,000.

Only $120K? That's a steal!

Volfoni showed dual-purpose 3D glasses at NAB. When powered on, they function as active shutter eyewear. Powered off, they are usable as passive 3D glasses. The whole shebang is controlled by an external power pack the size of an iPod nano that clips to your pocket or shirt, and this ‘pod’ can ‘learn’ any IR code from active shutter TVs.

 

The pod controller can step through several neutral density filters and there are several levels of color correction possible from the remote power pack. (Electronic sunglasses – imagine that!) The glasses use 2.4 GHz RF signaling technology to synchronize with any active shutter monitor or TV. And despite all of the bells and whistles, they weigh just over an ounce.

 

Sony’s 17″ and 25″ BVM-series OLED monitors that were first shown at the 2011 HPA Technology Retreat now have siblings. The PVM-E250 Trimaster OLED display is structurally the same as its more-costly BVM cousin, but has fewer adjustments and operating features. And it’s going to sell for quite a discount over the BVM version – just $6,100. There’s also a 17-inch version which wasn’t operating at the show, and it is expected to retail for $4,100.

 

Up at the front of the Central Hall, Panasonic was showing the TH-42BT300U, their first plasma reference-grade monitor. It’s not all that different from the exiting 20-series industrial plasma monitors in appearance, but there’s a big difference in operating features. Black levels have dropped and low-level noise has been minimized with a half-luminance PWM step. This results in more shades of gray and a smoother transition out of black.

 

In addition, the TH-42BT300U supports 3D playback for side-by-side and top + bottom color and exposure correction. Panasonic has also added automatic ’snap-to’ color space menu options, along with a user-definable color gamut option. When calibrated, it was an eye-catcher. There’s a 50-inch version also in the works, and both monitors will go on sale this fall.

Sony knows OLEDs. Make. Believe. (Nah, it was real...)

Panasonic's TH-42BT300U (left) maps color accurately to the BT.709 color space, unlike its sibling the TH-42PF20U (right).

Hyundai unveiled the B240X, a new 24″ passive stereo LCD monitor. It sports a 1920×1200 display with circularly-polarized film-patterned retarders and supports 3D side-by-side and top + bottom viewing formats. The pixel pitch is about .27 mm and brightness is rated at 300 nits. Hyundai also created an eye-catching 138″ (diagonal) 3×3 3D video wall for NAB, using its flagship S465D 46″ LCD monitor.

 

Sisivel has come up with a unique way to deliver higher-resolution 3D TV in the frame-compatible format. Instead of throwing away half the horizontal resolution for 1080i side-by-side 3D transmissions, Sisivel breaks the left eye and right eye images into two 1280×720 frames. The left eye frame is carried intact in a 1920×1080 transmission, while the right eye is broken up into three pieces – the top 50% of the frame, and two half-frames that make up the bottom.

 

All of this gets packed in a rather unusual manner (see photo), but some simple video processing and tiling software re-assembles the right eye fragments into one image after decoding. Then, it’s a simple matter to sequence the lefty eye, right eye images as is normally done. The advantage of this format is that it has higher resolution than ESPN’s top+bottom 3D standard (two 1280×360 frames).

So THAT's how you pack two 1280x720 3D frames into a 1920x1080 broadcast. Clever, eh?

 

JVC announced two LCD production monitors at NAB. The DT-V24G11Z is a 24-inch broadcast and production LCD monitor that uses 10-bit processing and has a native resolution of 920×1200 pixels. The extra resolution provides area above and below a 1080p image for metering, embedded captions, and signal status. The incoming signal can also be enlarged slightly to fill the entire screen.

 

The DT-3D24G1Z is a 24-inch passive 3D monitor with circular polarization patterned films. It has 1920×1080 pixel resolution, 3G HD-SDI and dual-link inputs, a built-in dual waveform monitor and vectorscope, left eye and right eye measurement markers, and side-by-side split-screen display for post production work including gamma, exposure, and color/white balance correction.

 

Nearby, crowds gathered to see two new 4K cameras that use a custom LSI for high bitrate HD signal processing. The demo used a Sharp 4K LCD monitor, and the cameras were running at 3840×2160 resolution. They have no model numbers or price tags yet.

 

Ikegami’s field emission display (FED) monitor that attracted so much attention a few NABs ago, but was written off when Sony pulled out its investment from the manufacturer, is now back. Its image quality compared favorably with Sony’s E-series BVM OLED monitors, and the images displayed with a wide H&V viewing angle and plenty of contrast pop. It was being used to show images from a Vinten robotic camera mount at NAB, and no pricing has been announced.

Forget the Canon SED, Ikegami's got an FED! (A 'what?')

Dolby showed their PRM-4200 42-inch HDR LCD reference monitor at NAB. While this product is not new, there was a substantial price cut announced at the show to $39,000.  Initial comments from the post production community have indicated the price is too high for today’s economic environment. As a result, Dolby has apparently sold a few to video equipment rental houses for location and studio production work.

 

Digital SLRs are being used to shoot TV productions such as “House” and independent films, and they could use a couple of good monitors with hot shoe mounts. Nebtek had a 5.6” model at the show, as did TV Logic. Both models sport 1280×800 (WXGA) resolution, compatibility with HD-SDI and HDMI inputs, and have on-screen display of waveform/vectorscope details, focus assist, and chroma/luma signal warnings. Embedded audio from the cameras’ HDMI output can be displayed on screen, and there are several scan and pixel mapping modes.

 

One of the more significant announcements at the show – at least, at first reading – was Verizon’s Digital Media Services. The idea is to serve as an electronic warehouse for everyone from content producers to digital media retailers – in effect, an Amazon e-commerce model, except that Verizon wouldn’t sell anything; merely ‘warehouse’ the assets and distribute them as need to whomever needs them.

 

Numerous companies showed real-time MPEG encoders, among them Z3 Technology, Visionary Systems, Haivision, Vbrick, Adtec, Black Magic Designs, and (of all people) Rovi, otherwise known for their electronic program guide software. Many of these encoder boxes can accept analog video (composite and component) as well as HDMI and DVI inputs. The general idea appears to be ‘plug-and-play’ encoding for IPTV streaming across a broad range of markets. The Black Magic encoder was the cheapest I’ve seen to date at $500, while price ranges on other models ranged as high as $9,000.

A Tektronix monitor for color anaglyph 3D? REALLY?

Do NOT let your children get any ideas from this photo...

Tektronix had one of the funnier (unintentionally) demonstrations of test and monitoring gear. A new combination monitor, the WFM300, has a color anaglyph mode where you can see the interocular distance for red and cyan color anaglyph program material. Never mind the fact that color anaglyph isn’t being used for much of anything except printed 3D these days, so what were the folks at ‘Tek’ thinking?

 

Finally, Sony showed they can be all wet but still on top of things with their demonstration of an HXR-NX70U 1080p camcorder operating normally while getting a pretty good hosing. The camera is completely water-sealed and dust-sealed for use in hostile environments, and records to internal hard disc drives and memory cards. The shower ran continuously during the show and the camera never even hiccupped. Fun stuff!

This TV business is a killer!

In a recent Wall Street Journal story, Blockbuster announced it will let leases on 186 stores expire at the end of this month as it struggles to climb back out of Chapter 11 bankruptcy. Double-digit store closings were predicted for California and Texas.

 

By the time this latest round of closings takes place, Blockbuster will have shuttered 1,145 ‘brick and mortar’ DVD/Blu-ray rental and sales outlets, or more than a third of the stores it had when bankruptcy proceedings started last fall.

Blockbuster is struggling with a prolonged decline in DVD rentals, caused primarily by the popularity of Netflix’ Watch It Now streaming service. DVD and Blu-ray sales have also slipped in the past two years as more consumers have decided they don’t need to own physical copies of movies, but are content to watch them through video-on-demand (VOD), digital downloads, or streaming.

 

Believe it or not, New York-based hedge fund Monarch Alternative Capital has bid $290 million for Blockbuster, and there are likely to be alternate bidders next month at auction. What these companies would be bidding for isn’t exactly clear; no one in their right mind would want to keep Blockbuster’s old business model going when it’s clear that streaming and downloads are the wave of the future.

 

Nevertheless, Hollywood continues to ship DVDs and Blu-ray discs to Blockbuster, and the auction should generate enough proceeds to pay off numerous creditors including the studios.

 

Across the pond, the news is just as bad for Royal Philips Electronics NV, a consumer electronics giant that sells everything from TVs and Blu-ray players to refrigerators and toasters. (I’m still waiting for them to combine a toaster with a TV.)

According to Bloomberg News, Philips expects to lose as much money in Q1 ’11 in the television business as it did in all of last year! The predicted loss is at least $155 million and maybe more. The culprit? Continued downward pricing pressure on all types of TVs as manufacturers and retailers attempt to stimulate sales.

 

This means Philips will suffer its fifth consecutive annual loss in the TV biz, which makes you wonder why they don’t just get out of it altogether as Hitachi has already done in the United States (and may soon be followed by Mitsubishi and JVC, if present economic trends continue).

 

To show you what impact this pile of red ink has, TV sales amounted to almost one-third of all the revenue earned by Philips’ consumer lifestyle division. If one-third of your business activity is losing money, you’d be reorganizing fast. Indeed, the company will get a new CEO this week, but it’s not clear how he can stem the tide.

 

My guess is that Philips will pull the plug on TVs in 2012 if they don’t see a substantial turnaround in profitability through Q4 of 2011. In 2008, they sold the Philips name to Funai for TVs retailed in the United States, a move that is paying off nicely for the Japanese manufacturer. It also generates some royalties for Philips, which is perhaps the best approach to take with what’s left of their European and other remaining markets: Cut bait, and stay with lighting and health care products, two businesses that actually make money.