The cost of your home theater depends on three factors:
1. What you have already that you intend to use.
2. What you need or want to buy to add to what you already have.
3. What you need or want if you end up starting from scratch.
In order have a functioning home theater system you need the following at a minimum:
1. A TV or Video Display
2. A DVD player and/or VCR
3. A surround sound capable Receiver
4. Loudspeakers (usually five satellite speakers and a subwoofer)
5. All the cables and connectors
6. A surge protector (a good way of centralizing and protection your equipment).
Various Approaches To Home Theater
A. If you take the approach of starting from scratch, having to buy a 27-inch television, combined with a home theater-in-box system, and all your other accessories, you should expect to budget about $1,000. If you are using an existing television, and just purchasing a basic home theater-in-a-box system, expect to budget about $500.
B. If you take the approach of buying a 27-inch television, DVD player, separate surround sound receiver, speakers, and other accessories, you should expect to budget between $1,000 to $1,500.
C. If you take the approach of buying a large screen television of some type as well as mid-range surround sound setup, I would budget from $1,500 - $4,000. A lot depends on the type and size of television, AV receiver, and speakers used. The cost of a DVD player is much less than the other components.
D. If you take the approach of buying a high end video display device such as large screen Plasma or LCD HDTV or a video projector, I would definitely budget between $5,000 - $10,000 for a good audio and video setup.
E. If you are doing minor construction, such as simply mounting speakers on walls, ceiling mounting the video projector, but not actually going into the walls or ceiling for wiring or ventilation needs, you should expect to budget of about $10,000 - $20,000 depending on what level of components you end up using. Of course, the above amounts don't include the cost of any new furniture you may desire for your home theater room.
F. Lastly, If you are making the plunge into a custom installation with high-end components, that also includes extensive room construction (such as tearing out and/or redoing walls) I would budget at least $30,000 for the job (includes construction and all the components).
The Bottom Line
In the final analysis, what you spend really depends on what you want and where it is to be used. The above examples are intended to give a general picture of what to expect. Advances in technology and the downward price spiral of components are constantly changing what to expect in terms of a potential home theater budget. There are some inexpensive and mid-range options that provide exceptional value and performance, while some very expensive components only deliver a marginal increase in performance and may not always be the best value for a specific consumer.
Home theater is something that can be tailored to your individual needs. There is no single best home theater system or type of system, everyone has their own individual way on how to integrate the movie theater experience into their own home environment, and that is the way it should be. After all, it is YOUR home theater...
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