Calculating the cost of viewing TV commercials: Is it really worth the time it takes for you to watch them?

If you "do the numbers" the answer is obvious!

Today Hulu announced that it was pilot-testing a new paid subscription service to watching television programming on on-line-connected TVs, mobile devices [like phones and iPads] and computers.  Hulu is testing the service on an invitation basis right now, but it's pretty safe to bet that it's doing this to test services and their pricing strategy on what they think is a scalable plan.  

If you haven't heard of Hulu.com, it is an online content provider associated with providing television programming; it's current services are cost-free, but limited to previously-run programming.  The paid service will cost $9.99 a month and offers--in addition to what's presently available as free viewing--current programming from the three media sources that own it, specifically, NBC, News Corp., and Disney.  What's on trial with this move is the concept of paid subscription to current material, ahead of other online content providers like Netflix, cable services, and others.  

Is paying for content really make sense?

A central question in all of this is:  Will the public be comfortable to now actually pay for content...when it's been so used to free?  No matter who the content provider is in the future--and there will be others coming along to do the same thing that Hulu is pioneering--it's an open question as to how fast consumers will adopt the pay-for-content concept.  

Consider the people you know...how many individuals out of ten you are familiar with would think this is a good deal?  I bet that many of those I know would say that this is a lot of money to spend to watch what's otherwise free from other, conventional courses, that it's not worth price, thanks-but-no-thanks.  Would you be among those acquaintances of mine who'll drag their feet?  

How do you know if it's the right amount to pay--if pay we must?

And I'd think that those kind of people would being extremely short-sighted to think it's a bad deal.  The matter you need to consider--the question you ought to ask yourself--is whether paying money for such content makes sense.  And exactly how should one figure out if this is a good deal?  I explain to you how I'd approach the question...

First, you'll need to pay attention to how much you are paid to do your normal-everyday-job, say on a per hour basis.  this means that if you make $25,000 a year, you have an hourly wage of about $12; if you make $50,000, it's $24 an hour; and if you make at least $100,000, your wage is at least $48 an hour.  

Ever figured out how much of your life is spent watching commercials?

Next you have to determine how much time you spend viewing commercials [overlooking for the moment the inconveniences you have to endure to schedule your viewing when providers expect you to view them] with conventional sources.  Let's say for sake of argument that you watch, on average, one hour of television a day [which by most people's practice is on the skimpy side, but work with me on this], that translates into 30 hours a month, or--and pay attention here, this is the important part--roughly ten hours of commercials!  

If you valued your time--and you could avoid viewing ten hours of commercials--what would you be willing to pay?  In other words, what would you be willing to pay somebody to give you, in effect, ten hours of your life back that you'd otherwise have to give up if you had the commercials to take in?  Given the value of ten hours of your time--and let's say you make $50,000, or $24 an hour--that would add up to be $240 in your viewing time just to view a source with commercials; the trade-off you have to make a decision about is this:  it is worth $10, the monthly cost of Hulu, to get the time value of your life back, which arguably could be estimated to be as much as $240?    

Is really an obvious, easy decision to make.  

Think about it this way and the answer is simple.  In fact, if a person with $50,000 of income watched more than three hours a month--it'd still be a good deal!  If that person watched appreciably more than that, it'd be a terrific bargain.  

But you can be sure that a lot of people will draw back for a fee that's as "high" [that is, compared to "free"] as Hulu's--but you can be sure that either they won't be thinking about it straight, or they don't value their time.  Rush Limbaugh muses on the irony that a lot of people get very annoyed when ATM charges are increased by a dollar, but are tranquil when their taxes are raised by thousands.  If an individual balks at spending $10 a month for current, commercial-free programming--it's the same kind of quirky oddity!  

The average consumer--make that TV viewer--forgets that mass media advertising costs advertisers money and you time--all so that the content provider can made a profit.  Now, with services like Hulu, advertisers don't have to pay [because there aren't any advertisers in this model] and the content provider gets money from you instead.  But the rate you have to pay is very attractive one because it gives you back the time it would otherwise cost you--but a very favorable price!  How does it get better than that?  _______________________________________________________________

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