You can go out at night and see a movie for $10. Watching a movie a night would cost $300 a month.
If you like to own and collect movies, you could buy DVDs and Blu-rays for the same amount of money if you shopped for bargains, ending up collecting 365 movies a year. But if you’re buying a new movie every night to watch, when would you re-watch anything in your collection? Ownership ain’t what it used to be.
Then there’s cable TV. For $80 a month, 24×7 movies, don’t worry about going out, shopping, collecting or shelving.
But for $7.99 a month can join Netflix and get one disc out at a time, and if you watch them immediately, and live in a city with a distribution center, might squeeze in a dozen movies a month, paying 67 cents a movie. $15.99 a month you can get 3 discs out at a time, and probably cover having a movie every night of the month, getting your per flick cost down to 53 cents.
For that same $7.99 you can get Netflix streaming, and theoretically watch twelve 2-hour movies a day all month. $7.99 / (12 x 30), which is about 2 cents a movie, or a more realistic 26 cents a movie if you watching only one a night.
Of course, you could just steal movies on the net and pay 0 cents per movie, but hey, we’re not thieves.
In other words, the Internet makes things cheaper. But does it improve our lives and society to let people watch a movie for 26 cents?
In 1965 I became a record addict, and averaged buying 2 to 4 albums a week until I found Internet Pricing. In the old days I bought LPs, and then CDs. At it’s peak I was spending $200-300 a month on music. Now I spend a flat $9.99 a month at Rdio and get access to over 20 million songs. Internet Pricing strikes again.
My wife and I used to subscribe to the local paper and over twenty magazines. Except for a couple e-magazine subscriptions on my Kindle, I no longer subscribe to periodicals and read stuff off the internet for free.
I’d like to get The New York Times, but at $15 a month is too expensive to what I’ve got accustomed to from Internet Pricing. For $18 a month I get Netflix streaming and Rdio, or tens of thousands of movies, television shows, documentaries, and a couple million albums. So why would I pay $15 for a single daily paper? Why isn’t there a company that charges $7.99 a month to read all newspapers from around the world?
Next Issue charges $15/month for access to 107 magazines. That’s the same price The New York Times charges for 1 newspaper. Sadly, none of my favorite magazines are available through Next Issue (The Atlantic, Rolling Stone, New York Review of Books, Scientific American, Smithsonian, Harpers, Discover, New Scientist, Sky & Telescope, etc.)
See, I’ve been corrupted by Internet Pricing. At one time getting The New York Times for $15 a month would have been a tremendous bargain. Now, I feel it’s too expensive when I compared other content I buy off the Internet. My innate sense of pricing was also distorted by reading the NYT for free online for years, and the fact there are many good newspapers from around the world that are still free to read online.
Would we have a more vibrant economy, with more jobs, if the internet didn’t exist?
I’ve been corrupted by Internet Pricing in other ways. Last month I wanted to buy an issue of Harper’s Magazine to read one article. But I just couldn’t let myself spend $5.99 to read one article. However Harper’s is tempting me. For subscribers to their paper copy, they give access to 163 years of back issues on the internet. I can get a year sub to Harper’s at Amazon for $15. See how Internet Pricing is disruptive? $15 for one month of the NY Times, or $15 for 163 years of Harper’s Magazine for a year. The New York Review of Books recently offered me 10 issues for $10 that included 50 years of online archives. The Rolling Stone also has a similar deal for $19.95 for a 26 issue sub and a complete run of back issues online. I don’t want paper copies of anything, but I do want access to complete archives. However, they won’t sell me just the archive access. Those savvy magazines publishers have figured things out, sell their old technology at normal prices and give Internet Pricing for free. I took the $10 deal, and I’m seriously considering subscribing to magazines again if I get their complete archive.
I go into a bookstore now and it kills me to pay list price for a magazine. I’ve been corrupted by Internet Pricing. Now I might just be a cheapskate, but what if I’m typical. How is being corrupted by Internet Pricing affecting people across the world. What is its impact on GDP?
JWH – 9/23/13
Auxiliary Memory 
Why is it that when people talk about the prices for internet content and services, they never include the costs to access the internet? ISP fees in the US are quite expensive and then you have hardware costs, not to mention the time and money spent keeping everything current enough to be usable. In other words, nothing on the internet is actually “free”.
One of every five people you pass on the street have no broadband access at all in their homes (10% of the US populace have smartphones only, but that is another kettle of fish).
Say you pay $50 a month for the Internet, Netflix, Rdio, or The New York Times won’t get a dime of that. Everyone pays to use the net, either as a user or publisher, but that’s the background radiation cost.
Oh, I know. I sometimes wonder if it would be desirable or practical to have some kind of pass-thru fee that would go to content providers — something like the TV tax that goes to the BBC.
Point is, though, if you don’t have good net access, the new arrangements can actually make life harder and more expensive. Broadband really ought to be a public utility.
Yes, it’s very important that everyone have good Internet access. I consider it like having access to roads. I don’t think content providers should get part of the internet fees people pay. That’s like saying businesses along roads should get a cut of taxes for roadwork. We allow everyone on the roads, and we tax everyone to pay for them.
Content providers have to pay huge internet fees, in proportion to the amount of traffic they get. But that’s logical. I pay to get to Amazon, and they pay to send me something back.
Actually, the tax I was thinking of is an annual license fee on TV’s, VCR’s, etc which goes to fund the BBC. It’s actually a levy on broadcast usage rather than the equipment itself. The BBC provides both content and broadcast infrastructure of course. It’s somewhat like our gas taxes in that if you don’t use a car/TV, you don’t pay the tax.
You could conceiveably have some similar fee on internet users which might go towards public broadband infrastructure and content.
The original idea of taxing VCRs and tapes was to compensate publishers for people making copies of their work. For thing to be equal then, you’d tax various internet sites that distribute free content, and then pass it on to the publishers of that content. Or the government could tax users based on their internet fee and then use part of it to pay movie, TV and music publishers for all the content that is stolen. But that’s taxing some people unfairly.
I buy Breaking Bad from Amazon at $2.99 an episode. But many people just steal it off the internet. But if there was some kind of taxing to compensate AMC, I’d be paying twice. If everyone paid for what they use there would be no need for taxes.
Oops.
http://en.wikipedia.org/wiki/Bbc
Well we already have a tax system to support PBS. Basically the BBC seems to be a big tax supported network paid for by license fees. I guess that’s more fair, because everyone who pays taxes here, whether they watch PBS or not, pays for public television.
“For that same $7.99 you can get Netflix streaming…”
Or you could get YouTube for free. And since I can’t keep up with every video I want to watch on YouTube, let alone with Hulu, too, paying an extra $8 a month would be a complete waste. 🙂
You wouldn’t go out every night to see a movie, anyway. You might say that “the Internet makes things cheaper,” but what it really does is make things easier. It might actually be more expensive, if you wouldn’t spend the money at all, otherwise.
I don’t watch enough television to make cable TV economical, or even to make Netflix economical. And although I’d love to get The New York Times online, I wouldn’t read it enough to justify the cost (and I wouldn’t read paper copies at all).
In a way, this is like buying things on sale. If you wouldn’t have bought them otherwise, you’re not actually “saving” anything. 🙂