1080e.tv: Vizio and Westinghouse Want Your Help

April 06, 2009

Vizio and Westinghouse Want Your Help

Vizio and Westinghouse Want Your Help It’s the kind of obscure corporate issue guaranteed to confuse half the consuming public and put the rest to sleep. But it’s also an issue that Vizio and Westinghouse, two LCD HDTV manufacturers known as “value” brands, hope will bring average Janes and Joes to their side.

The two companies have joined forces to convince the populace to support their fight to lower royalty payments to the holder of key digital television technologies.

In simplest terms their argument goes like this: American consumers are paying more than they need to for HDTVs because these two companies have to pay Funai, another TV manufacturer, higher than appropriate royalties to use its key digital TV technology patents. (If you’re interested, the patents were originally owned by RCA, which transferred them to Thomson, their French former parent, which then sold them to Funai.)

Vizio/Westinghouse argue that companies in other countries pay far less for the same digital TV patent royalties. The two companies have filed suit in federal court to essentially get the fees lowered.

To make their case, the companies have created a group cutely called CUT FATT, or the Coalition United to Terminate Financial Abuses of the Television Transition. On its web site the group argues that it is paying $20 to $30 per television set sold in patent royalty payments, compared to about $1 in the rest of the world. And it encourages consumers to get involved and let the Federal Communications Commission and their representatives in Congress know that they are fed up and won’t take it anymore.

How this case will be decided is not known. But Rey Roque, Westinghouse’s vice president of marketing, says that the fee needs to be lowered so that they can get the price of the smallest TVs down to what equivalently-sized picture tube sets used to cost: as little as $99-149.

In fact, you can already get a Westinghouse TV for $149; Costco has a 19-inch Westinghouse model on sale for that price.

While both companies say that they will lower their prices if they can get the royalty payments down, neither would commit to a dollar-for-dollar reduction. “We’re in the value segment; we always pass price reductions on,” Mr. Roque said.

It’s not surprising that neither company would commit to lower their prices to reflect their lower production costs. Analysts believe that to keep prices low, both operate on single-digit profit margins. If they can cut their costs and keep some of the savings, it could significantly help their bottom line.

Still, trying to get consumers to take action on a relatively obscure issue that, if successful, may only shave a few dollars off a fairly inexpensive product may be a tough sell.

Posted at 06:45 AM in News | Permalink

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