Printer and TV Companies Are Struggling to Provide 'Shareholder Value'

Last year, HP found a way to trick buyers into locking their printers to never, ever work with third-party ink. The good news is that it has ended this nonsense, but not in a way that anybody will like.

Thankfully HP is dropping its ridiculous HP Plus printer ink subscription scheme—by discontinuing those models of printers. It is not unlocking those printers for any existing owners. Meanwhile, TV companies are getting out of the game because they can’t make money, and those that stay are essentially mining your personal data to sell. In short, these companies are treating us as enemies instead of just building things we want to buy and selling them to us at a fair profit. What happened?

"As someone who has founded multiple ecommerce companies and advised major brands, I've seen the damage done by predatory tactics. Companies got greedy, sacrificing customer trust for quick profits. But the tactics never last," Will Mitchell, the founder of StartupBros, told Lifewire via email. "I helped one TV company refocus on quality and partnerships. Their revenue grew as customers saw real value. Customers accept bad tactics out of necessity, but flock to brands offering transparency and mutual benefit."

"Plus"

HP Plus was an ink subscription service. Agree to six months of "free" ink, and the printer would then refuse to accept anything but HP's own ink. You could enjoy the $65 printer without the "free" ink and avoid this lockout, but the moment you agreed, that was it. A non-reversible firmware update was applied, and you were beholden to HP for the rest of the printer's life.

There is no way you could look at this and think that HP was doing this for the benefit of its customers. It's a straight-up money grab. When viewed in the context of HP's long history of trying to stop people from buying reasonably-priced printer refills, it shows a company that's as customer-hostile as you could possibly get.

Well, perhaps not. Another contender for the Most Abusive Practices award is TV makers. The TV industry has driven its prices so low that it can no longer make sufficient profit from selling television sets. In 2021, Vizio reported that its ads, subscriptions, and data collection earned it more than double the profit it made from selling TVs.

"Printer and TV companies are struggling in a highly competitive market, so they've turned to models like ink/toner subscriptions and data mining to stay afloat," Albert Brenner, contract manufacturer and the owner of Altraco, told Lifewire via email. "These tactics take advantage of customer complacency and work in the short term, but they severely damage brand trust in the long run."

And how about Telly, a company that last year started giving away dual-screen TVs that used the lower screen to serve non-skippable ads. Clearly, the thought of not paying for a TV is tempting, but the arrangement is far from free and, again, puts the vendor and the buyer into an antagonistic relationship.

Growth

The reason for all this is pretty transparent—unlike the business practices of the companies involved. It's all about growth. In the US, the belief is that a publicly-held business has one responsibility—to deliver "shareholder value" (I'm sorry about the amount of scare quotes in this story, btw), which translates to growth at all costs. While a company might dabble in environmental concerns or actually pleasing its customers, these are—at best—secondary priorities to be dropped when growth slows down.

When you've built out your market share by dropping prices over and over, and you can no longer make things any cheaper by paying the factory workers less or reducing the quality of your product, you have to start looking elsewhere. But perhaps the most surprising part of all this is that we swallow it. We let Google and Facebook collect our data in exchange for "free" email, search, and body-negative photo-streams. We let printer companies lock us out of using the printers we bought, just for a few dollars off the purchase price.

"For many big-ticket purchases that happen infrequently, subscriptions are the hot business model. There was a time when you could simply buy a car. Today, most cars (especially premium cars) have various subscriptions. You want navigation? $25/month. The car has navigation installed, but to use it, you gotta pay monthly. A car's factory-equipped options used to be permanent, but now they exist only when payments are made," Iliya Rybchin, a partner at Elixirr and a privacy and supply chain expert, told Lifewire via email

But there are alternatives. Some companies position themselves as being more ethical, for example. "The future favors ethical companies benefiting customers and shareholders. The razor-blade model fails once customers realize they're being taken advantage of," says Mitchell.

But long-term, ethics and sustainability need to be something that the shareholders demand, which—given the reason for buying shares is profit—is hardly reassuring.