Tuesday, March 15, 2011

What is on my mind today?

As with most days, that which occupies my mind is nothing terribly important.

I've already done the math on this in the past, but I never wrote it down. I wanted to write it down and I wanted to share it. Blogger to the rescue!

To view entertainment content with Cable:
$60.99/month *12 months = $731.88/year
*add DVR @ $15.95/month *12 months = $191.40 + $731.88 = $923.28/year
a) Watch as many shows as you like (limited by time only)
b) Watch at any time (with DVR)
a) Only watchable from one source (where DVR is located)
b) Content only lasts until DVR fills up
c) Only content presented on this package's channel list is available for viewing

To view entertainment content with Apple:
Case 1: Worst Case Scenario
$0.99/show (rent) *24 shows/season = $23.76/season
$1.99/show (own) *24 shows/season = $47.76/season
(assume: 5 hours tv watching every day *7 days/week = 35 hours/week)
(assume: 0.5 hour shows [worst case scenario] nets potential 70 shows/week)
$23.76 *70 shows = $1663.20/year (rent)
$47.76 *70 shows = $3343.20/year (own)
Case 2: Realistic Scenario
(assume: control base is Esther and I, which means 23 shows [10 @ 1 hour, 13 @ 0.5 hours])
(assume: actual season lengths vary wildly between seasons, but average around 22 shows)
$0.99/show (rent) *22 shows/season = $21.78/season
$1.99/show (own) *22 shows/season = $43.78/season
$21.78 *23 shows = $500.94/year (rent)
$43.78 *23 shows = $1006.94/year (own)
a) Watch any show
b) Watch any time
c) Option to own
a) Can be expensive
b) Requires hard drive space (download only once/a few times)
c) Only available where you take it

To view entertainment content with streaming services:
(assume: services are Netflix and Hulu+)
Netflix streaming $7.99/month *12 months = $95.88/year
Hulu+ $7.99/month *12 month = $95.88/year
Together = $191.76/year
a) Watch as many shows as you like (limited by available selection)
b) Watch any time
c) No hard drive space required
d) Available anywhere there is internet (in theory)
a) Shows appear and disappear based on (ostensibly) invisible content agreements
b) Not all shows are available

Now, there's one caveat I hadn't mentioned yet. I assumed that everyone in the world has/pays for internet - including the person subscribing to cable. If you are subscribing to cable and as a result have no internet connection, you will be saving about $600/year depending on your area and options. So, if you really wanted to be ultra-fair, then the cable subscriber who doesn't have internet access would actually be more in-line with the other options (although the Hulu+ and Netflix option is still $200/year cheaper).

As you can see, if you are looking for the cheapest and most flexible option, online streaming services are going to save you a bundle of cash. So if you're wondering why Netflix and Hulu have such a hard time landing content deals, this is why. If they become viable enough as services that larger numbers of people "cut the cord" and move to using them exclusively, content providers stand to take a gargantuan profit loss.

The whole internet argument above was truly relevant ten years ago. Now, it is largely moot as broadband internet access is ubiquitous in our country. Apple's own solution to OTA/cable content is surprisingly competitive price-wise. In fact, for basically the same price as a year long cable subscription you can own full seasons of 23 shows, meaning you never have to look for them or rent them again because you own them. The only means still available to them to keep people tied down to their cumbersome and overpriced entertainment packages is to severely limit the offerings made available by streaming services.

Believe me, they are working hard to do that.

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