The High Price Of A Well-Wired Life
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.
By Larry Magid