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Saturday, January 03, 2004 - Page updated at 12:00 A.M.

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Can't lose with bargain DVD player, but low cost carries price

By Mike Langberg
Knight Ridder Newspapers

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If you want to enjoy eating sausage, you probably shouldn't watch sausage being made unless you've got a strong stomach.

In somewhat the same way, you shouldn't ask how it's possible to buy a DVD player these days for under $40.

These ultra-inexpensive machines, from no-name importers such as AMW, Apex, Coby, CyberHome, Mintek and Norcent, are surprisingly solid. Video and audio quality, along with reliability, are virtually as good as models costing twice as much from consumer-electronics giants such as Panasonic, Philips, RCA, Sony and Toshiba.

But there are hidden costs. Horrific working conditions on assembly lines in China, heightened trade tensions with Asian nations and Wal-Mart store clerks paid so little they qualify for food stamps, are partially related to relentless pressure to sell popular products at eye-popping low prices.

Low-cost DVD players became the holiday-shopping legend of 2003, thanks to a woman in Orange City, Fla., who claimed she was trampled the day after Thanksgiving by a crowd at Wal-Mart desperate to snag an Apex model marked down to $29.87.

The story now looks too good to be true; the woman, a former Wal-Mart employee, has a history of filing numerous slip-and-fall lawsuits and workers'-compensation claims. But many people are only likely to remember reports of her being pulled semiconscious from the floor where she was still clutching a box containing one of the DVD players.

Wal-Mart wasn't even the leader in offering "door-buster" discounts to lure shoppers. Fry's Electronics, for the day after Thanksgiving only, offered a Mintek DVD player at $26.99, while Best Buy offered DVD players from AMW and other manufacturers at $19.99 after a $20 mail-in rebate.

Putting aside these loss-leader promotions, it's no longer difficult to find no-name DVD players for $39, and most of the giants now offer models under $80.

For perspective, consider DVD players cost $500 to $800 when the format was introduced in March 1997, and the door-buster pricing in 2002 for no-name DVD players didn't get below $49.

Similar dramatic price cuts are happening across almost every category of consumer electronics, with combo DVD/VCR units selling for as little as $79 and five-megapixel digital cameras at $299.

Nor is the trend likely to stop anytime soon. Next year, DVD recorders — now mostly $299 and above — could sell for as little as $149.

I decided to dive into the fray of "Black Friday," the day after Thanksgiving, to get my own low-cost DVD player. First stop was the Fry's Electronics in Sunnyvale, Calif., shortly before 11 a.m., where I discovered early-bird shoppers already had snapped up the Mintek models at $26.99.

Such a deal

Next, I drove to the Circuit City in Santa Clara, Calif., and spent $3 more for the model S99 from Amphion Mediaworks (www.a-mw.com), also known as AMW. Total cost with sales tax: $32.46.

At home, the S99 did a respectable job playing DVD movies. The unit also played several of my MP3 discs; the S99 can even display JPEG digital photographs, although I didn't test that.

But one big thing was missing: The S99 does not have S-Video output, which provides a better picture on television sets that have an S-Video input. Instead, there's only a composite video plug, also known as an RCA jack.

My TVs all have S-Video, so I returned the S99 to Circuit City for a full refund.

A few days later, I went back to Fry's when the store advertised a DVD player for $39.99. What I got, for $43.29 including tax, was the Sylvania DVL 100C, manufactured by a Japanese company called Funai (www.funai-corp.com).

Again, playback performance was respectable, with finely detailed images and rich sound. The 100C apparently sold below $40 because it's an older model since replaced by the DVL 100D. It provided all three types of video output: composite, S-Video and component. The unit plays MP3s, but not JPEG discs.

I also tested the 100C with homemade videos burned on DVD-R and DVD+R discs. Some older DVD players choke on recordable DVDs, but the 100C had no problem.

I'm keeping the 100C. For slightly more than the cost of two DVD movies, I figure it's worth having a spare DVD player around the house.

Good or not

But I still can't shake my doubts. Can DVD players at such low prices really be any good? And how are manufacturers staying in business?

I called three industry researchers who know the answers: Michelle Abraham of In-Stat/MDR in Scottsdale, Ariz.; Jennifer Billingsley of ARS in La Jolla; Calif., and Richard Doherty of Envisioneering in Seaford, N.Y.

They agreed that because DVD players are built from standard components made very inexpensive by high volume, quality and reliability are good with no-name brands. Indeed, the famous brand names also make their DVD players in China, often on the same contract assembly lines as the no-names.

The no-names, by the way, also include a sub-category, which I call the "undead" — familiar names licensed by the companies, some defunct, that made them famous. DVD players carrying the GE, KLH, Koss, Polaroid and Sylvania names don't come from the original companies. The same is true for a new line of LCD televisions with the Westinghouse name.

$30 doable

The experts also agreed, to my surprise, that it is indeed possible for these no-name manufacturers — which don't have to support expensive marketing and advertising programs — to get DVD players from contractors in China and deliver them to the warehouses of big retailers in the United States for about $30.

The retailers are willing to accept a few dollars loss per unit on Black Friday, and very low profit margins on regular shopping days, in hopes customers will buy other higher-margin products.

Still, everyone is getting squeezed. Only the biggest retailers can pursue this kind of loss-leader pricing, and only by holding down wages on the selling floor.

Similarly, troubling reports of near-slave-labor working conditions keep trickling out of China.

There's also growing friction between China and the United States over Chinese government policies that support low-cost imports. What's more, many Chinese DVD manufacturers don't pay the $10 to $15 in royalties due per unit for patented technologies — penalizing established consumer-electronics companies that honor intellectual-property rights.

Hidden costs

The deep discounts, then, come with a cost we don't see: no more mom-and-pop electronics stores in the United States, and no assembly-line workers in China able to enter that country's growing middle class.

On a practical level, I have no problem recommending no-name DVD players for connecting to an average television set that's 32 inches or smaller. However, if you've just spent $5,000 for a 50-inch plasma screen and $3,000 on a room-rocking sound system, it's obviously worth spending a few dollars more for a brand name.

On an emotional and political level, I'm not sure where all this is headed or what consumers can do. You can't vote with your dollars. All DVD players are now made in China, so there's no "Made in the U.S.A." option.

If we all stopped buying DVD players tomorrow, conditions in China would probably get worse rather than better.

Maybe, in the end, it's enough to be aware of what's happening behind the scenes as we enjoy this cornucopia of bargains.


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