Recently, on a plane from Los Angeles to New York City I sat next to a graphic designer who proudly vented that, in the past few years, she had done away with her TV set, preferring instead to watch streaming videos on her computer. However, in order tot watch movies and favorite TV series, she bought a video projector, because presumably, after a day of work staring at a 17-inch computer screen, she, like the rest of us, wants to enjoy some entertainment on a big screen. Indeed, television still means continuity, familiarity and, today, a big screen.
According to data from New York-based private equity investment firm Veronis Suhler Stevenson, in 2006, U.S. households spent more than eight hours a day watching TV, up from about six hours in 1975. So, while ratings for the big U.S. broadcast networks continue to fall--collectively they lost 3.4 million viewers in the past TV season--people watch more television than ever.
A similar development seems to be happening with the U.S. car industry: While consumers buy fewer cars and the cost of gasoline continues to increase, people spend more time on the roads driving. But I'm not surprised, considering that the U.S. car industry's focus has changed from years ago, when it was able to produce exactly what consumers wanted.
And, like the U.S. TV industry, the American automobile sector is becoming more creative with cutting costs than with its products. It's more adept at anticipating shareholders' whims than those of the buying public.
Let's make some comparisons. The U.S. automotive sector is a $675 billion a year industry (based on 2006 figures for cars and light trucks) and the big three automakers (Chrysler, Ford and General Motors) collectively spend an estimated $1 billion a year on prototypes, which constitutes 0.2 percent of their annual revenues of $465 billion (2006 figures). The U.S. broadcast TV sector is a $49 billion a year industry and spends $200 million a year on its car prototype equivalent, pilots, representing 0.4 percent of its annual intake. And those figures are on the low end. If one considers cable, satellite, VoD, DVDs and other ancillary, such as in-flight programming, the TV sector's total annual revenue in the U.S. tops the $100 billion mark.
Years ago, in order to save money, car manufacturers in the U.S. tried to replace prototypes with clay models. That particular change marked the time in which Japanese cars started...