Subscribers Pay 61 Cents Per Hour of Cable, But Only 20 Cents Per Hour of Netflix (allflicks.net)

An anonymous reader writes from a math-heavy report via AllFlicks: The folks at AllFlicks decided to crunch some numbers to determine just how much more expensive cable is than Netflix. They answered the question: how much does Netflix cost per hour of content viewed, and how does that compare with cable's figures? AllFlicks reports: "We know from Netflix's own numbers that Netflix's more than 75 million users stream 125 million hours of content every day. So that's (roughly) 100 minutes per user, per day. Using the price of Netflix's most popular plan ($9.99) and a 30-day month, we can say that the average user is paying about 0.33 cents per minute of content, or 20 cents an hour. Not bad! But what about cable? Well, Nielsen tells us that the average American adult cable subscriber watches 2,260 minutes of TV per week (including timeshifted TV). That's equivalent to 5.38 hours per day, or 161.43 hours per 30-day month. Thanks to Leichtman Research, we know that the average American pays $99.10 per month for cable TV. That means that subscribers are paying a whopping 61.4 cents per hour to watch cable TV -- more than three times as much as users pay per hour of Netflix!"

Comments

Netflix v. Cable? How about Netflix v. HBO

[speedplane]

Seems like a false comparison. Netflix lacks news, sports and the vast amount of programming that is available on Cable ... it better be cheaper! A much more interesting comparison would be Netflix and HBO.

Re:Netflix v. Cable? How about Netflix v. HBO

[Anonymous Coward]

It's another shill piece for Netflix after the market hit them for not gaining enough new customers. Like all PR pieces about this company, they exclude the additional requirement costs; such as decent broadband, and devices to view the streamed media. Compared to a basic STB + TV, you need a bit of gear to start with for streaming services, whether it be smart TVs, consoles or plug-in devices that run the Netflix client, net connection and wifi etc.

Cutting the cable TV from a package will only increase the broadband connection costs, which in most cases will almost double the bundled price.

For accounting numbers, these shill pieces are exceptionally poor. They must assume their readers are morons. Therefore, they should not be getting any coverage in any remotely intelligent / tech-news aggregate forum.

..doesnt factor in connection cost.

[Rockoon]

This also doesnt factor in connection cost. Thats 20 cents per hour for people that somehow have internet costs counted on a different ledger.

Re:..doesnt factor in connection cost.

[houghi]

It also does not count for the time you are spending watching ads.

Re:..doesnt factor in connection cost.

[Maxwell]

OP's point was that Neilson can tell when your TV is on, but they can't tell if you are actually watching it. The morning news on mute with no one in the room counts as 'watched'. With netflix, generally, you have to explicitly turn it on and pick a show so you are more likely to be actually watching the content. That might explain the huge averages - the average american watches 5.4 hours of TV every. single. day? more likely they have TV on somewhere, but not necessarily watching it

Re:..doesnt factor in connection cost.

[Anubis IV]

Indeed. Once you adjust for the amount of content per hour of TV time (see math below), the cost for cable content is actually closer to $0.88/hr, rather than the $0.61/hr stated in the summary.

For the sake of fairness, if we take into account the average price Americans pay for an Internet connection, the cost for Netflix content ends up being about $1.22/hr. (math below). Of course, that number is kinda useless, since it fails to take into account the fact that most people in the developed world will be purchasing an Internet connection regardless of their interest in Netflix, as well as the fact that their Internet connection provides them with an essentially infinite stream of content from free sources other than Netflix (e.g. YouTube, Hulu, etc.) at no additional cost. But for a hypothetical person who has an Internet connection for the sole purpose of watching Netflix and uses that connection for no other use, I suppose that the number above would indeed be what they pay per hour of content (assuming their viewing habits matched the average American's).

If anyone has more up-to-date numbers, corrections for my math, or ideas for how to improve on these calculations, I'd love to see them, since I'm actually really curious about this stuff.

Math for cable's cost per hour of content:
A typical hour-long American show has 42 minutes of actual content and 18 minutes of ads. As such, while the average American may have the TV tuned to a cable channel for 5.38 hours each day, they're only receiving about 3.766 hours of actual content each day, or 112.98 hours per 30-day month. When the average cable cost of $99.10/mo. is taken into account, that yields about $0.88/hr for cable content.

Math for Netflix's cost per hour of content with Internet connection included:
The most recent numbers I could find for the average price of Internet connectivity in America are from 2014, and that survey pegged the number at $51/mo. (which, I'll point out, would provide far more bandwidth than would be strictly necessary to get Netflix, but it's the average price, so I'm going with it). With the $9.99/mo. cost of Netflix factored in, that comes out to a total of $60.99/mo.. Factoring in the 100 min/day of viewing that the summary mentions (i.e. 50 hr/mo.), Netflix ends up costing $1.22/hr of content.

5.38 hours per day

[mwvdlee]

5.38 hours per day

I doubt this figure; this is an absurd amount of TV to watch on a daily basis on average.
If you have a job, this figure pretty much means you spend all your free time on TV.
Is this just number the cumulative amount of hours of all TV's in an average family household turned on, or is this actually time spent watching TV by an average individual?