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.