Entertainment has long been evolving. Today, it includes scrolling social media, listening to music, and watching TV.
The average U.S. consumer spends a few hours a day watching TV.
But as issues made their way into the supply chain, TV prices have increased 42% year-over-year. This has mostly been driven by increased hardware costs such as silicon.
Investment Implications
TVs have historically been deflationary, with prices declining over time. However, as the cost of production increased throughout COVID-19, prices also increased. The result has been a 31% decline year-over-year in TV sales.
It’s worth thinking about how this affects both consumers and companies. Of course, the directly affected are the OEMs themselves, which have seen lower unit shipments and sales.
However, this also has implications for streaming companies engaging with consumers through the TV. Companies like Roku have highlighted the headwinds this past quarter. With TV being a key channel for them, new active accounts are at risk.
On the other hand, companies like Netflix see most of their usage on mobile devices, although at a lower engagement rate than on TV.
It will be interesting to see how this impacts companies long-term, which companies are most impacted, and how this translates to the consumer.
Twitter: @_SeanDavid
The author or his firm may have positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
