The High Price Of A Well-Wired Life

Tech Guru Larry Magid Compares His Gadget Bills To His Parents', Then Wishes He Hadn't

(CBS)  Still recovering from last week's iPhone 3G fever, I've been thinking about the annual cost of using not only that device, but all our other gadgets that require a subscription service.

As you probably have heard, AT&T has raised the price of the data plan for the new iPhone by $10 a month, which more than wipes out the savings you get from the lower initial cost of the hardware.

The $199 iPhone is $200 less than its predecessor but the increased cost of the data plan works out to an extra $240 over the life of the two-year contract. IPhones users will be paying at least $70 a month, which adds up to $840 a year, plus taxes and fees.

But it's not just the iPhone that puts a deep dent in your wallet. Even regular old cell phone service costs about $50 a month per user. When I was growing up, most households had one phone line that cost maybe $8 a month back in 1970.

But the $50 figure is for one cell phone. My family has four of them, with a combined monthly bill of about $250. We still have our old-fashioned landline ($42 a month) and our Internet phone ($29 a month). That jacks up our monthly phone costs to about $320 - more than $3,800 a year - and doesn't even count extras like international calls or when we go over our allotted cell phone minutes.

Admittedly, my parents paid a lot more for long-distance calls. But their total costs weren't nearly as high. Today's families get plenty of other bills that our parents never dreamed of. Cable or satellite TV service can cost as little as about $15 a month for basic service, but you can easily spend as much as $120 a month for a premium package - and that doesn't count the cost of any pay-per-view movies you might want to order.

Then there's our Internet bill. I love high-speed Internet service, but once the promotion period ends, I’ll be paying $67 a month for my 16-megabit "Blast" service. (To be fair, there are less expensive, slower-speed cable and DSL services.)

There are plenty of other ways we can spend money each month. If you want to add a TiVo digital recorder to your TV set, it will cost you $12.95 a month or $129 a year, plus the cost of the hardware. A typical three-movie Netflix subscription costs $20 a month. Want to play interactive games on your TV? An Xbox Live subscription costs $60 a year.

When I watch a high-definition movie on Apple TV, it sets me back $5. That's at least $1 more than what it costs at the video store, though at least I don't have to burn $4.60-a-gallon gas to fetch the movie.

We are also starting to see software and service fees. Security programs like Norton Internet Security or Trend Micro Internet Security Pro almost always have an annual subscription plan - typically around $69 a year. So far, most people buy their desktop software but there is a trend toward “cloud computing,” in which you access your software online - in some cases for a monthly or annual fee.

Yahoo has a free e-mail service, but if you want to turn on its advanced features and eliminate ads, you need to pay $20 a year.

And then there's the cost of powering up all your equipment. My father's energy bill was a fraction of what I pay. Not only has the cost per kilowatt gone up exponentially but so has the amount of power we use. My mom and dad might have had less efficient appliances and light bulbs but they didn't have to pay for the energy to run a 57-inch LCD TV that uses more than 300 watts when on, or a digital video recorder that uses 47 watts 24 hour a day.

And dear old mom and dad didn't have any devices that used "passive" power when on standby.

By the time you add up the fees for all your digital services and the cost of running them, it could cost a family as much as $6,500 - which (not adjusting for inflation) is more than average families earned in the 1960s.

[blaqc]

@grigjd3: "I don''t know how you take $12.95 a month for TiVo, multiply that by twelve months, and get $129 a year. The correct answer here is $155.40 a year."

Larry is correct: TiVo service costs $129/year (if paid yearly), or $12.95/month (if paid monthly).

[lovesamerica]

I do not have a cell phone,nor do I want or need one. Need is the word there. Every cell phone, computer screen and gadget uses a type of mineral that is only mined in the orangatangs habitats. Every updated cell phone sends them closer to extinction.Try to do with what you have if you need one,save the forests for the gentle creatures that are almost extinct in the wild

[erasmus81]

"Payphones? I thought they went the way of the dinosaur, the crewcut, the carhop and the hippy." Posted by koko98 at 03:16 PM : Jul 16, 2008

haha, I live in Canada. We don''t have as many lunatics here destroying them, like you guys do. I will admit they are hard to find.

[lovesamerica]

Analog cell phones no longer work, even for 911 calls.

[gmond]

People who know what they''re talking about can be both tech-savvy and cost-conscious. Then there are those who get paid to be CBS''s shill for their advertisers and don''t have to know anything.

[grigjd3]

Aren''''t we all just a bit status conscious these days? --Isn''''t that what all these techno-toys are for, ego? Having a cell phone for emergencies (yeah, okay) is one thing, but aren''''t big chrome laden trucks, big houses, fancy clothing labels, and having all the latest gadgets good for much else other than status?

Posted by AaaBee

I have techno-toys because I like them. I like that I can listen to music on my cell phone. I like that both my wife and I have cell phones so we can make a phone call in an emergency. I like watching football in high definition. I like being able to order pizza online. I like playing video games. I don''t care one bit about what others think of my techno-toys. I didn''t buy them for others.

[ozarkbard]

Wait a minute,

Larry Magid''s family each has a cellphone, AND you have a traditional landline phone AND you have an internet phone...

Must be nice to afford such wastefulness.

This all coming from the same guy that told everyone to go out and buy large screen TVs a few months ago... about a month before their prices dropped dramatically.

I just don''t get it. CBS can I have a job?

[grigjd3]

Um, for a tech guru, this guy''s math is kind of iffy. I don''t know how you take $12.95 a month for TiVo, multiply that by twelve months, and get $129 a year. The correct answer here is $155.40 a year.

[erasmus81]

"FYI: Even if you have a cell phone you can dial 911 on it and it will work even one that is disconnected. The 911 call will link into the network and go thru." Posted by XmanBorg at 01:24 PM : Jul 16, 2008

Thanks for that information. I didn''t know that. I will pass that on to my kids. Of course, they probably already know.:) I know that you can do that with a pay phone, even if you don''t put any money in it.

[xmanborg]

rational_1 and erasmus81

I so agree with what you say. Its fantastic to be unreachable. FYI: Even if you have a cell phone you can dial 911 on it and it will work even one that is disconnected. The 911 call will link into the network and go thru.

[xmanborg]

The question you need to ask your self is:

Do I really need all that stuff and features. I walked OUT of an AT&T store and told the sales people to frack off because they kept trying to add features and things I did not want. They kept pushing unlimited TEXT and Video and Web Service and I dont need or want ring tones.

I only want a phone that has VOICE MAIL and to Make Phone Calls on. I dont need all the other bells and whistles. I dont even want TEXTing

Learn to say NO to Your Self and Its amazing how much money you can save.

[erasmus81]

rational_1

"I''''ve refused to get a cell phone."

Me too.

"It''''s nice being unreachable for at least a while. Yes, I know I may one day find I urgently need a cell phone, but I''''m willing to pay that eventual price just to have my peace now."

I agree.

People keep telling me I should have one, but I refuse. One day my car was acting up and I had to pull over. I had to walk quite aways to find a phone booth, but it was still worth it.

Everytime I am in a restaurant, and I hear someone talking on their cell phone, I feel like going over to them, taking it out of their hands, and bashing them over the head with it.:)

[hypnotoad72]

Aren''t we all just a bit status conscious these days? Isn''t that what all these techno-toys are for, ego? Having a cell phone for emergencies (yeah, okay) is one thing, but aren''t big chrome laden trucks, big houses, fancy clothing labels, and having all the latest gadgets good for much else other than status?

Posted by AaaBee
------------------

Probably, but who promotes them?

Granted, I too now own a video game system (a Wii), but I use it for yoga and other things when not programming. Good on the arms. I refuse to go outside because of child molesters, burglars, and other nasties - much less being pre-emptively treated AS one just by talking a walk outside. Or going hiking or a photo shoot somewhere just to get heckled or mugged by some petty jacka**.

Take care of the uncouth animals first, then we''ll talk.

Oh, I have one brand shirt (xmas present), otherwise I wear unbranded clothing. I don''t have a SUV, big house, or much anything else. Everything I have has a practical purpose. Period. But I''m a geek too, as I''ll no doubt be reminded of...

[hypnotoad72]

* Cable - Per month, it''s more expensive than buying two seasons'' of favorite tv shows on DVD.
* Cell phones - a necessity for a mobile job. Since more and more job spans are 5 years or less, with frequent uprooting, these things are now deemed necessities. Never mind 50 cent payphones are harder to find...
* I don''t mind living close to work, though many people do -- maybe they should move closer... until they lose their job and have to uproot again.
* Over the last 40 years, our society lets bullies run loose to pound or kill, and teens getting pregnant. Nothing wrong with video games to keep people from maiming or porking...
* If people don''t buy these or other things, nobody will make them and the people who get paid for them will no longer get money or the means to buy them (or anything else). Basic economics.

Or, in short, society comes up with new "conveniences" that increase "efficiency". The state of our society, rabid enough as it is, almost makes many electronic peripherals necessities. Some of these are more entertainment-based than necessities, but it is a case-by-case basis once it''s all said and done.

Also, why would anyone want to watch video on an ipod or iphone? Especially high def when those screens don''t support that res in the first place... :-S

[bobnjersey]

[Still recovering from last week''s iPhone 3G fever, I''ve been thinking about the annual cost of using not only that device, but all our other gadgets that require a subscription service. ]

the subsciption model is the new windfall for all these telcom/media companies. the margins are huge and the profits provide a pile of cash. if you see an onslaught of ads for their service ... they''re either on the verge of bankrupcy ... or they''re awash in money.

people willing to pay $100/month for tv, hundred(s) a month for the wireless phone, and then additionally for internet, et al ... are telling these companies what the market will bear.

pretty soon free music on the radio will be a thing of the past ... couched as some big advantage for you.

[nlm2383]

And people complain about the price of gas at least that is something you have to have the iphone isn''''t.
Doesn''''t seem to me that the economy is hurting when people are still spending money on stupid things!


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Posted by american30 at 10:09 AM : Jul 16, 2008

I completely agree. When I heard the price of an iPhone, I started thinking of all the things I could spend that money on...a couple car payments, 4 months of cellphone bills, 6 months worth of groceries, 3 months worth of rent. The ridiculous prices people will pay for phones and other electronics that will be outdated in a few months is just plain stupid. I''ll stick with my cheap cellphone and service and be happy knowing I wont be evicted or have my car repoed because I just HAD to have the newest...

[nlm2383]

Right on! I''''ve refused to get a cell phone. My wife has one so she can call AAA if the car breaks down or if the school phones her about one of our kids. Not me - I drive home in peace, listening to Bach instead of insipid phone rings, and watching morons weaving all over the road while they yak on about God knows what. It''''s nice being unreachable for at least a while. Yes, I know I may one day find I urgently need a cell phone, but I''''m willing to pay that eventual price just to have my peace now.


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Posted by rational_1 at 11:38 AM : Jul 16, 2008

There are also those of of who DO own cellphones that DON''T use them while driving to prevent weaving all over the road. For some people it just makes sense... There are 4 of us living in our apartment. We do not have a house phone because it''s a waste of money, we all have cellphones. The only people calling us were telemarketers and wrong numbers, why pay for that? I would rather pay my cellphone bill every month and know I''m paying a little more to not be solicited to than I would for a house phone that will never be used.

[rational_1]

Being unreachable is a GOOD thing, disconnecting from availability is HEALTHY. Having four cell phones in the family means that the kids have them and there''''s nothing that says that is necessary. I know where all of my kids are at any given moment. Stop throwing your money away to these people who have brainwashed you into believing you need them. You don''''t.
Posted by YBotherAtAll at 08:08 AM : Jul 16, 2008

Right on! I''ve refused to get a cell phone. My wife has one so she can call AAA if the car breaks down or if the school phones her about one of our kids. Not me - I drive home in peace, listening to Bach instead of insipid phone rings, and watching morons weaving all over the road while they yak on about God knows what. It''s nice being unreachable for at least a while. Yes, I know I may one day find I urgently need a cell phone, but I''m willing to pay that eventual price just to have my peace now.

[aaabee-2009]

I don''t have any of those things listed above, perhaps this is because I don''t have children, or I am older and knew that life was just as good before all these things existed.

But these younger kids have not known life without most of these items. NOT having them while others do have them is increasing the surly gap between the Haves and the Have Nots, the cost of being a Have apparently is now around $6500.

Aren''t we all just a bit status conscious these days? Isn''t that what all these techno-toys are for, ego? Having a cell phone for emergencies (yeah, okay) is one thing, but aren''t big chrome laden trucks, big houses, fancy clothing labels, and having all the latest gadgets good for much else other than status?

[missingamerica]

And those costs - in combination with the escalating costs of food, energy, and housing - will soon enough fragment the United States into information "haves" and "have nots" - and the latter are the preferred game of the neocon hunters.