AV components and cable prices


Somebody on an internal alias asked, “why is a HDMI cable $60 when the DVD player is also only $60”, and here’s what I wrote:


McDonalds sells you a hamburger for $0.69 (hypothetical price – I haven’t bought a burger from them in quite a while). They charge you $0.89 for the coke that goes with it. The margin on the burner is miniscule (the cheap burger may even be a loss leader). The margin on the coke is about $0.80.  People are price-sensitive to the burger price, but they’re not price-sensitive to the price of the drinks.


 

Same on A/V components and cables. People are price sensitive on the components, so most companies keep their margins there very low. But once you’ve decided to buy it, you need a cable. You can a) try to go to another store to get a decent cable at a decent price (but none of them sell that) or b) buy something over the net and put off your gratification until it shows up.

 

Most people do a, and the people that do b usually buy the component that way as well.

 

So, that’s where the stores make their money. It would not be uncommon for the store to make more on the $100 you spend on cables than the $1000 you spend on components. And it’s a lot easier to tout the “you can spend $60 on the normal cable, but you will probably want the oxygen-free copper one to get a really good picture” line than it is to push extended warranties, which require you to talk trash about the very component that you just talked up.

 

I’ve had good luck at http://www.avcable.com/, who does really high-quality work. Somebody also pointed to http://www.monoprice.com/

 


Comments (6)

  1. DM says:

    And (as a lot of people know) they make even more money on the warranties than on the cables:

    http://www.businessweek.com/magazine/content/04_51/b3913110_mz020.htm

  2. Mark W says:

    That is so true.  With signals being analog the shops can upsell the cables because a higher quality cable actually gives you better quality – or so they claim.  The same cannot be said with digital signals.  Yet we still have the high quality brands selling cables for astonomical prices.  I cannot find a brick-and-mortar store that sells special cables like HDMI for cheap.

  3. Chris L says:

    Even with analog video I can’t seem to find any difference between cheap & expensive ones, as long as they’re only a few feet long. Though if you have to plug & unplug them often, expensive ones may have  more durable connectors.

  4. Troy says:

    Do electrons really care what conductor they are flowing on? As long as cables are shielded and can handle the current on them, there will be no difference in their performance. Expensive cables are a tax on the physics-impaired. I actually saw expensive directional signal cables once. I bet a lot of people bought them.

  5. ericgu says:

    Troy,

    There are a few things that matter. Shielding matters. Quality connectors that aren’t going to go bad over time matter. And for video frequencies and up, impedence matters.