Clarify:

1. People who just live in NY or also people who work there and visitors? Just live

2. NY State or just NYC?

3. Period of time? 1 year

4. Just consumer or also commercial? Just consumer

5. New or also used? Both

Here are some assumptions I will be operating under:

– TV ownership penetration is very high in the US and especially in NY due to the high cost of living making ownership a small % of overall expenses

– I am excluding non-TV screens like laptops and monitors since a TV is a pretty clearly defined product category with very minor overlap

– I am going to count the same household(HH)/residence purchasing multiple TVs twice, since the estimate I will be doing will include replacement cycle for TVs, and a household that has multiple TVs won’t replace them in the same year, but since I am averaging they need to be accounted for. For example HH1 is a buyer in year 1, 2, and 3, but for different TVs HH2 is a buyer in year 1, 2, and 3, but for different TVs, this means 2 households, 6 TVs, and with a 3 year replacement cycle, (# TV / # per year = 2) not (# HH / # per year = ~0.7)

Based on the above the way I would calculate this would be by first determining the number of TVs in NYC, and then determining what percent are replaced per year.

For # of TVs in NYC:

– NYC population is about 10 million

– I am going to assume the household size is about 2, probably a little different than national average due to many young single people living alone, roommates, and families

– TVs per household should be around ~1.5 with minimal residences not having a TV (5%), most (60%) having just 1 TV due to small size of NY apartments, and some (30%) having 2, and another 5% > 2

The TV replacement cycle is about 3 years, and that is a mix of some buyers replacing every year, most buyers replacing every 3 years, and some replacing 5+ years.

Based on this the # of TVs would be 10M pop. / 2 HH size x 1.5 TVs per HH = 7.5M divided by each TV being replaced about every 3 years = 2.5MM potential TV buyers.

Sanity check:

Since there are about 10M people, most (80%) of them being of an age that want and can purchase a TV, a little over 1 out of 4 people wanting to buy either a new or used TV feels about right, maybe a little high, since thinking about myself, I can’t say that 1 out of 4 of the people I know have bought a new TV, but they don’t necessarily advertise that and the question is also about potential buyers, not TVs sold. I would reduce this number a bit more for the latter.

How many potential TV buyers there are in NY ? Walk us through your thinking process

–Clarity 

– When you say TV should I include PC,Laptop screens? assuming No

– Is there a specific type of TV or any TV? Any TV

– Over what period? I’m assuming over a year

– when you say do you mean NY state or NYC? assume NY state, population of 20 milion

– what’s the definition of a buyer? do we mean individuals or number of TVs that can be sold , assuming the latter? never the less I’ll share the other number as well since it’ll be part of the process

– Are including those used for commerical purposes? TVs are also used for commercial purposes  ( displays at shops, showrooms), we’ll not be including this in the calculation – since they are a small fraction of total TVs sold

Commercial displays are not included in TVs

 

Number of tvs sold can be broken down into

=(Number of households with TVs x number of TV’s per household)/(average life of a TV)

= Assuming average household size of 3 = 6.3 million households in NY

People usually keep TVs in there living room and bed rooms, as the house size grows, rooms grow and hence more TVs

 

	% of households	Number of TV’s per household	TVs	Average life span of a TV	Annual sales to such buyers	Comments
Sub 1000 sq ft	30%	0.7	1323000	5	264600	NYC = almost 40% of NY state population and the average apartsize is sub 1000 Usually used by bachelors/singles, some may use their own personal computing devices as screens Mostly rented apartments so people staying their dont invest in TVs
1000 to 2000	40%	1.5	3780000	5	756000	Usually has multiple bedrooms + large living room Used by families, expect more TV since viewing preferences differe
2000 to 4000	20%	2	2520000	6	420000	Usually has multiple bedrooms + large living room Used by families, expect more TV since viewing preferences differ Has more disposable income Higher life span since TV usage is distributed
4000+	10%	3	1890000	6	315000	Usually has multiple bedrooms + large living room Used by families, expect more TV since viewing preferences differ Has more disposable income Higher life span since TV usage is distributed

total = 1.75 milion TVs

buyers = number of households = 1.08 million households ( for sub 1000 sq ft houses I only counted those who are had TVs, for other households I calculated households looking to buy (ignored the multiple TVs aspect, since 1 household = 1 buyer)

Clarifying questions

• New York is made of 5 borroughs. I assume we want to calculate market opportunity for all borroughs – Yes
• Should we exclude computer monitors – Yes
• We are only looking for brand new TV purchases and not used TVs – Yes

This is a good start. I will state my assumptions throughout.

 

What do we know

• NY is made of 5 borroughs
• Majority of NY city corporations are concentrated in Manhatten
• Most households own a TV. TV enjoys a high penetration across low, middle and high income. The only difference being the rate of replacement and buying new vs used.
• I am assuming we want to estimate TV buyers by year.
• Corporations/governments also buy TVs (maybe at less frequency), so we should also account for them.

Given that, I will categorize use households in my calculation

# of potential TV buyers = # potential households in NY  + # potential Corporations / governments

Lets focus on householder.s We know that NY population is about 8M residents. We also know that a typical household has ~2.5 (from census). So the total households in new york,

# households in NY = 8M / 2.5 ~ 3M households

Not all households are looking to buy new TV every year. A typical household replaces TV every 4-5 years. So that means, in a given year,

3M / 5 = 600,000 households are potentially looking to buy a TV

Out of the 600,000 households, not everyone is looking to buy a brand new TV. We can assume college students, young demographic renters and low income people will purchase used televisions compared to working demographics. Given that there are few colleges like NYU, Columbia and other state/community colleges, we can assume it makes up to 15-20% of these households.

 

That drops the households looking to buy new TVs,

~400,000 households

Now, lets calculate organizations/governments wanting to buy TVs. As I mentioned, the rate of replacement for them will be higher than consumers. We can assume about 7-8 years.

 

We know that Manhatten has the highest concentration of corporations then any other borrough. So, we can apply 80/20 and just focus on Manhatten.

 

Lets look into businesses. We can make some smart guesses – The number of corporations cannot be more than 1M because the population of Manhatten is 1.5M. We also know that it cant be less than 10,000 because it is 22 sq.miles (that’s big). I would imagine it’s between 100,000 to 150,000 businesses. Averaging it to 125,000 business.

 

Now, not every business needs to have TV. For e.g. Starbucks doesn’t have TV but barber shops do. I expect that small fraction of businesses will own TV based on the service they provide (doctors, barber/nail salons etc). We can assume about 20% of those business need TVs and replace them every 8 yrs.

 

125,000 * .20 = 25,000 / 8 = 3000 business

 

So, total number of potential customers looking to buy TV every year in NY are

 

400,000 households + 3,000 business ~ 400K potential customers

—- Post review

• I could have ignored the businesses calculation but I didn’t know until I went down that path.
• According to statista, there are 120M households with a TV. Also, 40M units were sold in the US. That brings to replacement year to 3 (compared to my 5 years calculation).
• I could have dug deeper on 20% of households looking for used TV purchases by calculating % of student population and low income to total. But not sure I would have gained any new insights or the final number would have changed by 10x.