Fighting subscriptions II: Entertainment, from cable TV to XM radio
This is the second installment of my series on subscriptions, and how they can be reduced or better managed to save you money.
Entertainment-related subscriptions dominate American lives, largely through our television sets. Cable penetration totals 66 million subscribers, satellite television, 23 million. There are also DVD-rental services, ranging from Blockbuster ("tens of millions of member accounts", says its website) to Netflix (3.5 million subscribers).
And then there's music: Nearly nine million people subscribe to XM and Sirius, two satellite radio services. Millions more subscribe to Rhapsody, an online music downloading service. (I'm leaving general Internet browsing out of entertainment-related subscriptions, and will discuss this in a separate post on communications)
The services listed above are not cheap. This is what a typical non-intro offer subscription to entertainment-related services will cost, not including equipment fees or other non-subscription costs:
Basic cable: $7-$10/month, $84-$120/year
"Standard" cable: $40-$45/month, $480-$520/year
Premium movie channels: $12/month, $144/year
Satellite TV: $20-$50 per month, $240-$600/year
Netflix: $15/month, $180/year
Satellite radio: $13/month or $156/year
Rhapsody: $10/month or $120/year
(Note that hardware costs can be significant. Satellite receivers for television and radio can cost up to $300. Cable boxes can also be expensive, although some services waive hardware and installation charges.)
Many people subscribe to one or more of these services -- for instance, Netflix and standard cable. It's not unreasonable to assume many people are spending well over $500/year on entertainment subscriptions. There are millions who have been cable subscribers for decades. If you fit into this category, you've probably blown at least $4000 in the last ten years on cable, and perhaps as much as $8000 if you subscribe to movie channels.
And ask yourself: has it been worth it? I don't dispute that there's some great quality programming on cable, satellite, and other media. And it is convenient to get it delivered to your living room and car.
But at what point do these subscriptions become redundant, or overkill? Do we really need hundreds of digital channels of television programming, or satellite radio that gives us a wider range of talk radio for our commute? These companies justify their pricing by saying they bundle dozens or hundreds of channels into one convenient package. But really, how many channels or programs do you really watch?
Furthermore, if you live in or near major urban centers, you can already get good over-the-air programming for free. Lost, Desperate Housewives, Howard Stern, All Things Considered, American Idol, Letterman, and local sporting events cost nothing with an ordinary television or radio.
As for movies, local libraries rent DVDs for a buck a week in my community, and you can reserve titles online. Unless you watch more than 10 movies per month, HBO or Netflix doesn't seem like such a good deal by comparison.
In terms of music, most newer cars have CD players, and you can also hook up your iPod to your car stereo with a $30 device -- does XM or Sirius really add much more in the way of music or other programming?
I think if you take a hard look at your current line-up of entertainment subscriptions, you may find that the idea of cutting cable service, or canceling the Netflix subscription isn't a great loss. You have other, cheaper alternatives, and the resulting trimming of excess or redundant entertainment services can save hundreds of dollars per year.
In the next installment, I'll take a look at cutting back communications-related subscriptions -- phone service, Internet access, and media subscriptions.
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I think you miss the point of Netflix. It's so convenient. You can choose from thousands of titles, including rare movies. Can your library do that? Also, Netflix delivers to your house, you dont have to go down to the library.
And believe it or not, lots of people watch more than 10 movies in a month, especially if you have kids in the house. :)
Thanks for your comment, Guest. I am not disputing the convenience factor of these services. Yes, by subscribing to them, you no longer need to go to a movie theater, buy a CD, or rent a DVD in person.
But I think a lot of these services are overkill to free or inexpensive services, and the hassle factor -- putting up with advertisements, or stopping by the library -- is minor.
That being said, there are families or users which will find great value in a service like Netflix, because they frequently watch movies or have kids who watch a lot of movies. Also, I think cable television and satellite television are great for people who live in more rural areas where free options are limited, or for families who want or nned to get foreign-language programming or other special programming -- CNBC, Bloomberg, etc.
Your forgetting a subscription to a DVR service as well. Tivo, which runs about $13 a month, or DVR service from your cable company (comcast, time warner) which I believe runs about $6-9 a month. However, I feel DVR service add value to my cable subscription, cause I find myself watching more of the programs I want in a lesser amount of time. Using a DVR, I can simply skip the ads, and watch an hour long program in about 40 minutes.
I also find that with Rhapsody, I buy less CD's, and find the $9 a month a good value for the amount of music I have access to. It allows me to discover a lot more music than you otherwise would have.
I'd say the point at which these services become redundant is when you no longer find value in the entertainment that they provide, or you no longer have the time to enjoy the entertainment they provide. If I only have less than 5 hours a month to listen to rhapsody, I would say it probably wouldn't be worth it, or if I was only able to rent 3 DVD's a month from Netflix due to time constraints, then at that point it's no longer worth it to me. But say if I rent the "customer average" number of DVD's per month, 11, then my cost per DVD is a little more than $1.60 per DVD, delivered to my door the next day.
I think a lot of it depends on the amount of use and the value that the service is perceived by the consumer.
Also, there is a lot more quality programming on cable now (versus over the air) then there was a few years ago. Discovery channel, Comedy Central, History Channel, Food TV, etc. But that all depends on your taste in programming. However, with more choice, you need a way to watch it all, and that is where the DVR comes into play, or even on-demand services now being offered.
Also regarding the number of channels, your esentially paying for those few channels that are popular, (ESPN, Disney, Discovery Channel) while the rest basically get "thrown in" It all depends on the cost to the cable company for carrying those channels. If cable companies were allowed to charge you per channel, (a la carte) you'd find yourself paying probably around $10-15 a month for ESPN or Disney alone.
I still think the real ripoff is with internet access... $50 a month or more through comcast, although there are cheaper options, but that all depends on your location and quality of service offered, but I'm sure that will be discussed in upcoming posts.
Well put, Keith. I had overlooked Tivo. It can be seen as a timesaver, that some people think is worth the cost (about $150/year). At that price, I am still willing to put up with ads.
Also, we get back to the subscription overkill issue. I have a friend who has Tivo, cable, and Netflix (I estimate at least $70/month, combined) but do you know what programs she watches the most? Lost, The OC and American Idol, all of which are free from ABC and Fox. Further, she works 50 hours a week, has a 90 minute commute each way, and doesn't have that much free time to watch all the programming, or use those services effectively.
As for Rhapsody, that would be a good deal except for the fact that you lose all the music you have downloaded the instant you end the subscription. It's a way to force people to keep their subscriptions going for years. I am not sure how many computers you can "share" the music with either, or if you can burn songs onto ordinary CDs -- anyone who uses the service want to share details?
I'm a single woman living alone. I refuse to pay for cable, Tivo, or Satelite Radio. I do Internet access for $25 per month and Netflix for $19 - total cost for entertainment is about $45 per month.
And the convienience of having Netflix has me running home after work just to see what DVD I got in the mail. It's like getting presents every week. This SIGNIFICANTLY cuts back on eating and going out expenses. My local library is right up the street, but it doesn't keep down on those going out and eating out expenses. After all, how can a girl turn down presents every month anyway???
I have to admit, Kira, that I did not consider the fact that subscribing to some of these services may save you money in other respects! But it's true -- subscriptions boil down to money spent for entertainment time, and in certain cases, a new subscription may pull you away from more expensive activities!
