Everybody knows that Netflix is cheaper than cable: at just $10.99 per month, Netflix’s most popular streaming plan is barely more than one-tenth of the staggering $100.98 per month paid by the average cable consumer. But, to be fair, there’s a lot of content in your typical bloated cable bundle, and statistics show that Americans still watch an awful lot of live and time-shifted pay TV. So we decided to crunch the numbers and see just how affordable cable and Netflix are per hour of entertainment. Spoiler alert: Netflix still dominates.
How Much Are You Paying per Minute for Cable?
Let’s break it down. First up: cable. A few groups track cable’s ever-growing cost, and one typical analysis pegged the average cable price in 2017 at the $100.98 figure that I cited in the introduction. From Nielsen, we know that the average American adult watches four hours and 23 minutes of live TV a day, plus 33 minutes of DVR content. That’s four hours and 56 minutes of pay TV a day.
Over the course of a year, then, we can expect a typical cable customer to watch 1,800.67 hours of live and time-shifted TV — and to pay a total of $1,210.80 for the privilege!
That comes out to 67.2 cents per hour, or 1.1 cents per minute. Not too bad, but it sure adds up — especially relative to Netflix, which ends up with similar figures for viewing hours and very different ones for prices paid.
What Does Netflix Cost per Minute of Content?
What about Netflix? Well, that’s tricky to figure out. The last time we broke down these numbers, we divided Netflix’s streaming hours totals by its user base and most popular price point ($10.99 per month) to get a rough figure. That’s not a bad back-of-the-envelope calculation, but let’s get a little more precise this time.
Netflix’s streaming hours totals come from its user base both inside and outside the United States, and not everybody pays $10.99 per month for Netflix — here in the U.S. or anywhere else! So, this time around, let’s look at Netflix’s total streaming hours, total user base, and total income from subscription fees.
Netflix users can stream up to 350 million hours of content in a single day. There are 109 million total Netflix subscribers. So on a day like that, an average Netflix user is streaming 3.21 hours of content. If they were to keep that pace up for a year, they’d end up watching 1,171.65 hours of Netflix over the course of a year. That’s less than the TV viewers watch, but still quite a figure.
Netflix made a total of $3,814,000,000 in subscription revenue in Q2 of 2018. That’s one financial quarter of the year, of course, so we can multiply that by four and divide by 109 million subscribers to find that the average Netflix user pays $139.96 per year for Netflix (that’s $11.66 per month, which passes the common-sense test).
Put it all together and you get a figure of 11.95 cents per hour of Netflix watched.
The Verdict: Netflix Is Cheaper Than Cable
We already knew that Netflix was cheaper than cable on a per-month basis. On a per-hour-watched basis, the gap narrows only barely. At 11.95 cents per hour of Netflix and 67.2 cents per hour of cable, this isn’t close. Cable isn’t quite ten times more expensive than Netflix per hour watched (as it is per month subscribed), but it’s still more than five times pricier!
We got more precise with our calculations relative to our 2016 analysis, but there is, of course, still some margin for error. When Netflix released the figures on that 350-million-hour day, they were bragging — that was an impressive total at the time, not a typical one. On the other hand, however, we know that Netflix’s user base and streaming totals are growing. And our analysis here included foreign Netflix viewers, which presumably did not help Netflix: Americans watch more TV than people in other countries do, and many of the countries where Netflix is most popular pay more per subscriber than the U.S. does.
So we’re in the ballpark here, and the numbers are not at all close. It’s safe to say that Netflix is strikingly more affordable on a per-minute basis than cable it.
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