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Subscription Optimization and Per Use Cost

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We have a lot of subscriptions in our household. We pay to subscribe to several magazines (Real Simple, Wired, Portfolio). We are members of our local gym and we have Netflix. We both have cell phones (hers is through her company) and we both have E-ZPasses in our cars. All together we probably have at least a dozen “monthly” services that we pay money for, all of which made sense at the time we subscribed. As our needs and our routines change, some of those services may not longer make much sense.

The idea of subscription optimization and per use cost is very simple. For a month, track how often you use a subscription and calculate the per use cost. If you pay $60 a month for a gym membership and go thirty times a month, that’s a per use cost of $2. Then compare it with the a la carte cost, or how much it would cost if you weren’t a member but still used the service. If it’s cheaper to go a la carte, cancel the subscription.

Example: E-ZPass Commuter Plan

We used to have my wife’s E-ZPass (it’s a device you use to quickly pay tolls) on the Maryland Baltimore Region E-ZPass commuter plan. You pay $20 for fifty trips every sixty days, which amounts to a “per use cost” of forty cents. My wife’s work commute took her through the Fort McHenry Tunnel (or the Baltimore Harbor Tunnel, based on how she opted to drive to work) which was $2 each way; it was a no-brainer. When her office moved, she no longer needed the plan because she wouldn’t go through the tunnels. That was an obvious decision, so we canceled the commuter plan.

Example: Netflix

The easiest way to find your “per use cost” in Netflix, short of tracking it yourself with pen and paper, is to use Feedflix. They can seamlessly integrate with Netflix (this gives them access to your Netflix account, which is a security risk) but it will give you a tremendous amoutn of information, as I mentioned in my post about maximizing Netflix. They appear to be getting more accurate, compared to the last time I looked at them, and they revealed that my cost per DVD rental was $1.25, which is more than what I would pay at a Red Box ($1.06). Netflix is a more interesting case because you can’t go “a la carte” with Netflix, your single serving alternatives are other businesses like Red Box or your local video store.

Quality of Service

Sometimes alternatives don’t offer the same quality of service as the main option. In the case of Netflix, the alternatives do; in the case of cable television, they may not. If you watch a lot of your shows off the DVR, you might consider canceling your cable television service and watching shows directly from the broadcaster’s website or off Hulu.com. Watching the shows off the web is an alternative but it doesn’t offer the same quality of service (which may not bother you one bit!).

Remember Fringe Benefits

Remember to compare apples to apples. I took a look at my cell phone bill to see if it might be cheaper to use a prepaid cell phone. You can get a lot of savings here and you don’t even have to track anything, just open up your bill and calculate how much you’re paying per minute. I used 265 day-time minutes and paid $33.95 for a per minute price of 12.8 cents. There are prepaid cell phone plans that are cheaper than 12.8 cents a minute, so I might want to switch.

But wait, I only calculated day-time minutes because my plan only charges me for day-time minutes. A prepaid cell phone would charge you for all minutes, which for me would total 500 minutes, or 6.79 cents a minute. Prepaid cell phones also don’t have data plans (I use a lot of this) or text messages, so I would have to take those into account too. Remember to compare the whole package, not just selective parts.

Have you taken such a close look at your subscriptions before? Find any that you could trim or replace very easily with alternatives? I’d love to hear success stories about this.

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8 Responses to “Subscription Optimization and Per Use Cost”

  1. Claire says:

    You’re wrong about prepaid cell phones. There is one in particular that offers a data plan (I think it’s through AT&T) and they all do text-messaging, as long as your phone has that feature.

  2. JC says:

    One thing you might consider as an alternative to a Netflix subscriptions especially if you’ve already used redbox. Every Monday and Wednesday you can find a promo code for free rentals for redbox at slickdeals.net (among other great deals people post). Simply do a search for redbox.

  3. MissMartha says:

    When I was living alone in NJ (before my roommate moved in) I looked at differences in cost between getting a cable/internet/phone package and getting a replacement service of sorts. I couldn’t afford to get the $100 bundled package for cable/internet and phone however I could afford the Netflix subscription at $20/month! It turned out that using my cell phone and just watching old Sopranos episodes was a much better deal than paying $100/month for the internet. I used the work internet when I needed to pay bills or get an airline ticket and everything else was taken care of.

    It was a much better deal, espeically since Netflix allowed me a two month free trial. (I think you only normally get a two week trial but when the trial period would lapse I would call to cancel and they would extend my free trial).

  4. Yana says:

    I can’t imagine paying for magazine subscriptions. We get several through Rewards Gold for free. They constantly send (e-mail) us offers, and we pass most of the links on to others. I don’t even read all the ones I’ve signed up for. The only magazine I like that wasn’t offered for free is Consumer Reports. I get Forbes, Business Week, Prevention, and my husband gets Car & Driver, Road & Track, Motor Trend, etc. When you join the place by accepting a particular magazine, you fill out a form about your interests. Then you get offers based on them.

  5. Anthony says:

    Here’s a scenario that is purely a waste of money:

    My fiance signed up for 2-year membership at Bally Total Fitness about 4 or 5 months ago. Since then, we moved, and it is (extremely) inconvenient for her to drive to workout. She is essentially going 0 days a month.

    Let’s do the math: $40 / 0 = infinity? Ooops!!!

    Unfortunately, she signed a contract: She’s locked in for the next year and a half, without any way to cancel her membership.

    • T. says:

      You may be able to sell or transfer the membership to someone who wants it. That’s how I got my membership a couple of years ago. They don’t lose a customer and the new member gets to take advantage of older (and cheaper) prices. Have the buyer pay the transfer fee – I think mine was $20, and I ended up paying $20/mth less than the current rate. Just a thought.

  6. T. says:

    Also look at whether or not you’re actually reading all those dead-tree editions that come into your house. If you find you like a publication, but just aren’t reading it, cancel the subscription and read it online. Most articles will be available online within a few weeks of publication for free.


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