Monday, 20 August 2007

Ideas for a paper: Hi-defintion supply and consumer demand - the manufacter of wants

I read alot of AVS's HD forums it's mostly people 'debating' about what format is better, Blu-ray or HD DVD. The debates get so anal that there's a huge thread over "it's not HD-DVD, it's HD DVD". Yes, seriously.

Anyway I got thinking this morning about the manufacter of wants, rational consumers, IP & 0 marginal cost issue in classical economics and the whole HD media. Especially this article:

Why the Full HD hype? The real story—the one you won’t read in a lot of reviews, and certainly not in any ad—is that profit margins are plummeting swiftly in the TV manufacturing industry. While this is nothing short of fantastic for consumers, it’s also nearly catastrophic for TV makers. They need to sell us bigger TVs, because they make more money on bigger sizes. And they desperately need a “step up” feature to persuade us that a slightly more expensive medium-sized LCD or plasma is better than a slightly less expensive one. Full HD spells “performance,” while 720p and 768p are “value.”

Now home theatre geeks like myself and other AVS members aside this is so accurate. 1080p TV sets are ridiculous unless it's >50". I have a 720p projector displaying on a 108" screen and the resolution is better than my 32" CRT. So, a 1080p 32-42" is just a waste, unless you sit in front of it like a computer monitor. 1080p is only a real gem for his front projector owners, but how many are actually out there?

So all this petty bickering on forums aside, I'm wondering just how much the market demands HD and how much is created by corporations. Psychologically are there any studies showing that people with 'average' vision can tell the difference, at what distances? The justifications for DRM include loss of $35bn sales a year, what's the methodology behind these stats? In sum, I think the current format 'battle' will be a good example of 21st century business competition and how it reacts to consumer demands.

Random ideas:

meta-analysis of available quality studies.
Justifications for DRM and ever expanding IP laws.
R&D costs in comparison to marketing costs.
Rent-seeking behaviour/abuse of dominant positions/tying etc. - Recent DG Competition investigation might be a source.
Manufacturer of wants

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