Increasingly, the cost of staying wired is eating up a huge part of people’s budgets accordinging to The Times:
It used to be that a basic $25-a-month phone bill was your main telecommunications expense. But by 2004, the average American spent $770.95 annually on services like cable television, Internet connectivity and video games, according to data from the Census Bureau. By 2008, that number rose to $903, outstripping inflation. By the end of this year, it is expected to have grown to $997.07. Add another $1,000 or more for cellphone service and the average family is spending as much on entertainment over devices as they are on dining out or buying gasoline.
And those government figures do not take into account movies, music and television shows bought through iTunes, or the data plans that are increasingly mandatory for more sophisticated smartphones.
For many people, the subscriptions and services for entertainment and communications, which are more often now one and the same, have become indispensable necessities of life, on par with electricity, water and groceries. And for every new device, there seems to be yet another fee. Buyers of the more advanced Apple iPad, to cite the latest example, can buy unlimited data access for $30 a month from AT&T even if they already have a data plan from the carrier.
“You don’t really lump these expenses into a discretionary category,” said Robert H. Frank, an economics professor at the Johnson Graduate School of Management at Cornell University. “As the expectation of connectedness increases, it’s what is expected for people to be functional in society.”
Americans are transforming their homes into entertainment hubs, which is driving up the amount of money they spend, said Lee Rainie, director of the Pew Internet and American Life Project.
“More people are creating experiences in their homes that are very similar to the kinds of public experiences they enjoy in movie theaters and concert halls,” he said. “Our homes are bristling with technology.”
Most people think home entertainment is cheaper. “Every time I want to go to Fenway Park or see the Killers in concert, I’m paying $50 to $100 each time. But once you build and install that home system, its basically pennies per minute of enjoyment,” said James McQuivey, an analyst with Forrester Research.
But they do not take into consideration the long-term economic effect — both in the maintenance and operational costs — of the devices they purchase. “A subscription model is the perfect drug,” Mr. McQuivey said. “People see $15 per month as a very low amount of money but it quickly adds up.”
I notice the sense that these costs don’t really count or add up as well, both in an ecological and economic sense. The perception that it is a good deal to spend money on things that allow you to stay at home has some truth in it, of course, but if the cost of staying home rises up to look like a night out, that’s a problem. I see this with food also – people with bags full of pre-prepared, high cost food saying they are cooking more, but not seeing their food bills go down.
Our own investments in technology have gone up too. We now have a second tracphone, bought when I was going to GA and Eric to NY. We don’t use the second one, but we own it, and paid for it. The big shift has been wireless – at $60 month for rural high speed (which doesn’t really operate at a speed called high, but is way better than the dial-up I worked with for the first four years of my blog) it is a hefty budget line item. But it also isn’t optional – with both Eric and I doing a substantial amount of our jobs online, it just isn’t a choice. The rest we avoid – no cable (no tv reception), no gaming, no subscriptions, no texting. But I understand that in many cases these things feel as necessary to some people. Some of them are materially necessary – that cell for work, or your blackberry. Others are socially necessary – kids may struggle with not participating in social activities taking place on media they can’t participate in or your spouse may flat out refuse to give up the cable.
Do you see the “my home is my castle” theory having more limitations? Where do you draw the line on technology investments and costs? How discretionary are these things for you?
Obviously, I’m a “less is more” gal when it comes to personal electronics and wiring, but I also don’t see it all magically disappearing anytime soon. What worries me is that people become increasingly dependent, and struggle to hold on to things that are viewed as necessities – indeed, sometimes function as them – and the costs thereof.