What is UPP? Or, why do TVs cost the same at every store?

Ever wonder why the TV you're considering costs the same in every store, and online? It's not a coincidence, it's UPP. Say goodbye to deal hunting.

Geoffrey Morrison/CNET

UPP, or Unilateral Pricing Policy, is a way for TV manufacturers to force retailers to keep manufacturer-specified pricing. As in no crazy discounts to move stock, no doorbuster deals, and no (let's be honest here) price competition. The price is the price is the price. Break that price, and you risk that company banning you from selling its products.

Shockingly, this is legal. Read on for more info.

UPP isn't exactly new. Apple and Bose have been doing it for years. Last year, Samsung, Sharp, LG, and Sony started doing it with TVs. What this means is if you're shopping for a new TV, there's little point in checking Best Buy, Sears, and your local electronics chain. Save your gas, as chances are they're all going to have the same price (on most TVs from those brands). The 800-pound gorilla of retail, Amazon, is one of the main reasons manufacturers adopted UPP. So now Amazon and Best Buy (and other retailers) all have the same pricing

How is this legal? Good question. My lawerin' skills are limited to one class I mostly slept through in college and "Law & Order" reruns, but here's what I turned up. While outright price fixing is illegal, a company can do business (or not) with whomever it chooses. So when a company says, "The UPP on this TV is $1,000" what it's really saying is, "If you charge less than $1,000 for this TV, we might stop shipping you TVs."

If you mention extortion again, I'll have your legs broken.

Sneaky, right? If Sam's Screen Shack wants to sell a TV at a loss to get people in the door (and sell them extended warranties and overpriced cables ), it's this humble author's opinion that it should be allowed to. After all, you can lose money on every one, but you can make it up in volume.

Though the beauty of this "deal" is that with UPP, TV companies aren't allowed to pressure specific pricing, only imply a threat if the pricing isn't followed. An explicit threat would be price fixing, an implicit threat is UPP. Hazzah!

Except, it's not quite that simple. What if Sam's Screen Shack is actually selling gray-market TVs through a Web site that may or may not exist in two months? Best Buy has a store you can return (and complain) to, so it can't sell at the same price as a shady fly-by-night retailer. Manufacturers, they would say, are protecting their dealers.

I'm sure Best Buy (and its ilk) are pleased with this since it might reduce "Showrooming," where customers check out a TV in a store, and buy it online . Amazon is less enthused with the whole idea. Ben Hartman, VP of consumer electronics for Amazon, was interviewed about UPP for Twice magazine.

"We believe in delivering the best possible value to our customers and we want Amazon to be the place they trust to find competitive prices. We also believe it is in the long-term interest of manufacturers to focus on providing a fair and transparent shopping experience that best meets the needs of customers. We do not believe price controls are in the best interest of customers or support innovation. In any event, Amazon will always set its retail prices independently."

Who isn't up with UPP? Panasonic. Since it's pulling out of plasma production , you might be able to find some deals eventually, but right now prices are either steady or have gone up in some cases in response to demand. The nontier-1 brands, like Vizio, Seiki, and so on, don't partake in UPP, either.

Bottom line
The good news is there are a lot of great, inexpensive TVs out there. The price to picture quality ratio has never been better. How am I doing at sugar coating it? The huge discounts we saw a few years ago on TVs during the holiday shopping season just won't happen this year (or likely again), at least not with the tier-1 brands (or not without their permission). If getting a deal is your thing, Gary "HDGuru" Merson has some tips on that front.

Otherwise, keep an eye on sales. Sure there won't be a lot, and they'll be when the manufacturer dictates the drop, but they're sure to happen. Check out our thoughts on when it's the best time to buy an HDTV and whether you should buy a TV now or wait .


Got a question for Geoff? First, check out all the other articles he's written on topics like HDMI cables , LED LCD vs. plasma , active versus passive 3D , and more. Still have a question? Send him an e-mail! He won't tell you what TV to buy, but he might use your letter in a future article. You can also send him a message on Twitter @TechWriterGeoff or Google+.

About the author

Geoffrey Morrison is a freelance writer/photographer for CNET, Forbes, and TheWirecutter. He also writes for Sound&Vision magazine, HDGuru.com, and several others. He was Editor in Chief of Home Entertainment magazine and before that, Technical Editor of Home Theater magazine. He is NIST and ISF trained, and has a degree in Television/Radio from Ithaca College. His bestselling first novel, Undersea, is available in paperback and as an ebook on Amazon, B&N, and elsewhere.

 

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