fredag 31 januari 2014

On the monetary intensity of media consumption

I know, the title of this blog post sounds really boring - but you are obviously smart enough to understand that it's really interesting to think some about the costs that media consumption incur in terms of money per hour (of media consumption). I will aggressively round off the numbers below and I will use Swedish prices and Swedish crowns since that's what I'm most familiar with. The exchange rate at the moment is 1 USD = 7 SEK and 1 Euro = 9.50 SEK

Let's say I want to watch a movie at a cinema. It's two hours long and it costs 100 SEK. The cost of watching movies at a cinema is thus 50 SEK/hour. Watching a theatre play costs more or less the double, and I personally think that's a bargain taking into account the uniqueness of the experience and the fact that you have actual people performing a service (performing the theatre play) for you.

Let's compare these figures with the cost per hour of reading fiction. The pocket books I read usually cost 100 SEK (or less) and I estimate that it takes around a dozen hours for me to read the average book, i.e. the price/hour of the activity "reading fiction" is around 7.50 SEK/hour. I can perhaps push the price down to 5 SEK/hour if I read less expensive pocket books. The costs of reading academic literature is higher though. Many books costs more than twice as much (>200 SEK), but they usually take less than 25 hours to read. I estimate that the price is between 10-15 SEK/hour for reading academic books

At, there are around 19.000 "movies" (including boxed TV series) for sale and a third of them are in the 50-100 SEK price bracket. If I buy a movie and watch it alone, the price might be the same as for watching it on the big screen (at a cinema), but if I watch that same movie more than once, or if I watch it together with someone else, I push the price down to half of that (25 SEK/hour) or less.

It is obviously hard to estimate the cost per hour of watching a movie you buy as it depends on how many persons and how many times you watch it (children's movies obviously delivers value for your money as they can sometimes be watched dozens of times). It's even worse to try to estimate the costs of streaming video services. Subscribing to either Netflix and HBO costs 80 SEK/month in Sweden. That's less than the price of going to the movies once per month and the price for having one of those services for a full year is about the same as two or three visits to a theatre together with my wife. Streaming video is obviously good value for your money, but the cost per hour will ultimately depend on how many hours per day, week or month you watch stuff. There ought to be some cut-off level, i.e. if you watch less than one hour per week, you might ask yourself why you subscribe to the service in question, but it might be enough to watch one movie per week or a couple of episodes of a TV series for you to "endure" the modest costs for that service. Do also note that several members of the family can use the same service (which pushes down the costs per hour). How much can you watch per week at the most? I think 20 hours per week would constitute a heavy user whose main interest is watching movies and TV series (for an average of 3 hours per day - a substantial part of your leisure time). As a family, you can probably squeeze out 40-80 hours per week from such a service. Netflix or HBO will thus land your costs at somewhere between 1-20 SEK/hour - which seems to be very reasonable costs.

The reason I started to think about these issues though is because of a game that one of my sons downloaded for the Ipad a month ago, "Kingdom Rush: Frontiers". It cost 3 USD (22 SEK) and it's a hit with the whole family. Since we were on month-long vacation over Christmas, no less than three persons were playing that particular game for something like 4-6 hours/day for several weeks. Let's very conservatively say we have played that game for 100 hours. That results in a cost of just 0.2 SEK/hour. And, we are not finished with the game yet, so the cost per hour will decrease further - although who cares if it's 0.2,  0.1 SEK/hour or less - it must still be one of the most inexpensive examples of media consumption around. Since we have played it so much, we have however incurred some extra costs in the form of in-game content. We have bough three extra characters and they cost 1 USD, 1 USD and 3 USD respectively for a total (additional) sum of 5 USD (38 SEK). That drives up the costs per hour (this far) to 0.5 SEK/hour. It's still really really inexpensive also in comparison to "traditional" computer games (Grand Theft Auto, Mario Cart, Call of Duty etc) where new games cost upwards to 500 SEK (!). You need to play such a game for 500 hours to push the costs down to 1 SEK/hour.

Do note that I only analyse media consumption in this text. It is of course also possible to spend your time on activities that don't cost anything at all (take a walk, talk to a friend, help your kids do their homework, listen to a podcast) or activities that might in fact save or earn you money (mending clothes and handcrafts of various kinds). Such calculations would become a lot more complicated so I'll stay away from that particular can of worms here.

My ramblings above were initially inspired by this picture of the energy intensity of different activities:

Picture: Steeper angle = higher energy intensity per hour. Longer line = more hours spent per day doing the activity in question. The activities from most to least energy intensive are: vacation trips, meals, shopping, household work, hobbies, reading, watching TV and doing sports.

Here's a summary of the costs calculated above (from high to low)

- Watching a theatre play: 100 SEK/hour (14 $/h)
- Watching a movie on cinema: 50 SEK/hour (7 $/h)
- Watching a movie on DVD: 12.5 - 50 SEK/hour (2 - 7 $/h)
- Watching Netflix or HBO Nordic: 1 - 20 SEK/hour (0.15 - 3 $/h)
- Reading academic books: 10 - 15 SEK/hour (1.5 - 3 $/h)
- Reading fiction: 5 - 7.5 SEK/hour (0.7 - 1 $/h)
- Playing a popular game on iPad: 0.5 SEK/hour (or less!) (< 0.1 $/h))

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