Monday, April 23, 2007

Common Sense Savings: Switch to Netflix

I love movies, always have. I've spent countless hours watching and discussing movies with my friends, whether it was what was the best sci-fi movie of all time or reciting lines from Snatch or The Godfather, it's always been a favorite past time of mine. Somehow I have always managed to find time to watch movies, particularly since I am not a big fan of TV. In fact, before I got married I never had cable, relying simply on an indoor antenna and the major networks that I received - my TV and receiver was more or less a device for watching DVDs.

There was a time in my younger years when I was going to the movie theater with friends and family almost once per week, in addition to renting from the local video store. But as ticket prices went up, crowds became more unmanageable, and, in my opinion, the overall theater experience became less savory AND less safe (I distinctly remember one alarming incident where off-duty policemen had to threaten to draw guns before escorting 2 violently feuding couples from a movie we were watching) I found myself renting DVDs more often as opposed to heading to the theater. For a while this sufficed, but soon I grew frustrated with the local video store's lack of selection and concentration only on new releases.

Salvation came when my wife and I took the plunge and decided on a trial offer from Netflix. That was more than 2 years ago and we have never looked back. For those of you who just discovering this wonderful thing called the internet or who somehow managed to avoid the plethora of Netflix ads populating the internet at large, Netflix is an online DVD rental service where you order DVD rentals online and, depending on the package you order, can rent as many movies as you'd like for as long as you'd like for one flat fee. There are a variety of packages you can order, but the 2 packages my family have used are the 2-at-a-time (unlimited rentals per month, maximum 2 movies out at a time) and the 3-at-a-time (unlimited rentals per month, maximum 3 movies out at a time). Basically, you can watch a lot of movies per month, it all depends on how quickly you watch and return them, the faster you return a movie the quicker you'll get a new one.

Netflix is a good deal not only because they have a vast, diverse collection that far exceeds anything you can find at your local Blockbuster (or even Blockbuster online) but also because it will save you a ton of money over the traditional methods of watching movies.

For example, let's say you sign up for the 3-at-a-time package, which means you can have up to 3 movies at home at a time and can watch as many movies as you want provided you return them fast enough. The price per month is $17.99, let's say $18 bucks to make it simple.

Let's say you watch 3 movies a week under this plan. That's 156 movies per year at a yearly cost of $216 - which comes out to a whopping $1.38 per movie.

Let's say instead of Netflix you and your wife have a typical cable package that includes HBO and a couple of movie channels like Starz, etc. that can run you roughly $80-90 a month. On top of that, you and your wife like to go to the movie theater about once a month: 2 tickets, small popcorn, and sharing one drink will cost you roughly $25 on the low end. That's over $1,200 a year to spend on movies. If you watched 12 movies in the theater per year + another 100 or so on cable movie channels (which assumes you can actually locate 100 unique movies on cable movie packages, good luck!) - that comes out to more than $10 per movie. And let's not forget that your expensive cable package most likely includes only recent releases and repeats them over and over again, whereas with a service like Netflix you can choose from tens of thousands of movies from all over the world in virtually any genre.

It took us awhile but my wife and I gradually made the permanent move to home movie watching. We rarely go to the theater anymore and then only when we have gift certificates or the occasional invite from a group of friends or family. We quickly got rid of our expensive digital cable package and moved to basic cable + ESPN (I need my baseball). Being avid movie watchers, my wife and I calculated that we average 3.5 movies per week via Netflix, which means we devour 182 movies per year minimum:

Before Netflix:
Cable - $90/month
Local DVD Rental - $8/month (about 2 rentals per month)
Going to the movies - $25 every 2 months

Total yearly cost spent on movies = $1326.00
Total monthly cost spent on movies = $110.50

Number of movies seen per year = roughly 90

Cost per movie = a whopping $14.73

After Netflix:
Cable - $37/month
Netflix DVD Rental - $18/month
Going to the movies - $50 per year

Total yearly cost spent on movies = $710.00
Total monthly cost spent on movies = $59.17

Number of movies seen per year = 185

Cost per movie = only $3.84 per movie

Total Savings:
Per Year - $616.00 (54% reduction)
Per Month - $51.33 (47% reduction)
Per Movie - $10.89 (74% reduction)

Any questions? And with today's technology and the proliferation of home theater equipment, it's fairly inexpensive and easy to set up a very cool looking and sounding 5.1 surround home theater system. No waiting in line, no expensive food concessions, no worries about crowded theaters or unruly patrons; you can pause the movie at any time to answer the phone, go to the bathroom, or rewind to re-watch a scene again or figure out who done what to whom.

Obviously cutting out movie theaters cold turkey isn't for everyone, and even with my family it took some time, but when we sat down and crunched the numbers, not to mention the convenience of the movies coming direct to our home through the mail, it was a no-brainer.

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