We Pay 19 Cents Per Hour for Netflix; 70 Cents Per Hour for Cable

Netflix doesn’t have to do much to convince someone to pay $8.99 a month for a subscription. For most, it’s an afterthought on monthly budgets, especially when compared to more expensive cable packages. 

When you compare the average cost per hour of Netflix to major cable subscriptions, it becomes far more clear that the value is even better than we could have imagined. Sure, a dwindling library size, rumors of testing preroll advertisements and of course the infamous Qwikster debacle could cause for the occasional pause, but despite all this, it doesn’t seem likely that many of us are lining up to cancel our subscriptions. 

A recent study by Leichtman Research Group, which surveyed 1,222 adults, found that on average we’re paying close to $100 per month for cable television. This is an increase of 39% in total amount paid to cable companies for monthly service since 2010. When using Nielsen survey results, we found that the average adult spends almost 141 hours a month watching traditional television, thus the average cost of a cable subscription is in the ballpark of 70 cents per hour of use.

Compare that to Netflix, which costs $8.99. A TDG survey of 2000 US adults found that on average we spend approximately 46.5 hours a month streaming Netflix, which works out to about 19 cents an hour while using the service. Not to mention those of us who, ahem, perhaps stream a bit more aggressively than others making the per hour cost even lower (seriously, I’m guessing I’m at least in the sub 10 cent range).

Just for fun, comparing the average cost of seeing a movie in the theaters at $10 dollars a ticket, the price of entertainment skyrockets to over $5 an hour. And a sporting event? The average NFL ticket is $84. So over a four hour game, you’re looking at $21 bucks an hour (ok, fine it’s probably not fair to compare going to an NFL game to watching a movie on Netflix, but you get the point).

To keep ourselves honest, it still should be mentioned that of course in order to stream Netflix one needs access to broadband internet, a hefty expense of its own at around $30-50 a month depending on any number of factors. But even then the utility provided by a fast internet connection doesn’t mean that $50 a month should be added directly to the cost of a Netflix subscription and called good. Instead, perhaps maybe a portion of it, could be added to the total, and even then, the overall cost is still far less.

Some other fun facts from the Leichtman Research Group survey below:

• 12% of homeowners have cut the cord, while 23% of renters don’t pay for traditional cable television.
• 63% of people who don’t pay for cable television are subscribed to an SVOD. This number does not include those who used a shared password.
• 62% of people who don’t pay for cable use an over-the-air (OTA) antenna

“Historically, consumers have gone in and out of the pay-TV category, primarily for economic reasons. While the rate of those leaving is actually similar to a decade ago, those who are entering or reentering the market has decreased over time, and the industry is not keeping pace with rental housing growth,” said Bruce Leichtman, principal analyst at LRG.