Saving with customized video streaming
tl;dr • Video streaming subscriptions may be boosting an opportunity cost for some • Hand-pick your content for a cheaper and more personalized selection • Keep an eye on credit card deals
One of the most common questions I would get during the 6+ years I worked for Amazon as a software engineer was "Why don't you have Amazon Prime?"
Well, first of all, no, Amazon would not give employees free Prime memberships.
Second, is it really worth paying for it? It actually depends on the benefits one may value. Amazon currently charges $139/yr for Prime, not bad considering all the things it includes, the most relevant to me being fast shipping and the video streaming service.
Although fast shipping feels great, it’s hardly ever a necessity to me. Amazon already ships the same selection for free on purchases of $25+, it just takes a few more days for packages to arrive. In fact, such restrictions can be a benefit on their own, as they force me to plan purchases ahead, thus reducing impulsive buying.
As for Prime’s video selection, well, it is nice but inevitably lacks a lot of the content I desire, meaning that I'd have to pay extra elsewhere to watch what I want. Unfortunately, this is currently the case with all video streaming services: because each has exclusive content of their own, none can be comprehensive enough.
Therefore, for fast shipping I hardly ever need, and a movie selection that is far from being sufficient, $139/yr doesn’t seem to be a great deal in my particular case.
Hand-picking my content
Should one subscribe to multiple streaming services for a broader selection? This is actually what is done in many households I know. The problem is that the more subscriptions one has, the less they'll have to put in their savings account at the end of the month. Amazon Prime and Netflix together, a common combination which may be enough for some, currently add to $259/yr.
I opt for a different approach instead. In the past 24 months I spent about $160/yr on video streaming from seven (seven!) different companies: Amazon, Apple, Google, HBO Max, Hulu, Netflix and Peacock TV, so no combination of two services would have worked well for me. With that, not only did I save about $99/yr – when comparing to subscribing to both Amazon Prime and Netflix – but I also enjoyed a tailor-made selection which none of these services alone could have provided me.
In fact, the savings could have been even higher if not for a small mistake I made: When I started watching The Office, I ended up purchasing several seasons on Amazon before I learned I could watch them on Peacock TV. Through roughly four months they amounted to a total of $89, or $49 more than I would have spent on Peacock TV.
So in my case, hand-picking video streaming content would have cost me $136/yr, meaning savings of about $123/yr, or almost half of the cost.
Time value of money
Let's take a look at what the time value of money would mean in this case. We’ll base upon the average return of the S&P 500 (1972–2021): 11.17% (nominal) and 7.00% (adjusted for inflation) – Ref. Investopedia. It’s always important to point out that past performance of the S&P 500 is no guarantee of future performance, but for now this estimate is enough to get the point across.
Investing $123/yr over a period of 40 years would amount to an extra $74,994 (nominal) or $24,555 (adjusted for inflation) in one’s retirement funds, money that could definitely bring retirement a couple of months earlier for many.
Tips
Make sure you do a quick research before deciding where to watch the next movie or TV show, it’s quite possible that there may be a price difference for the same content between multiple streaming services.
It’s also a good idea to make use of the free trials that most of these services offer. Amazon Prime alone has already given me multiple periods to use the benefits for free or for a substantially lower cost.
Another relevant point to make is that many credit cards include benefits or seasonal offers that can help reducing one’s costs. The AmEx Platinum card recently added free Walmart+ subscription (another fast delivery service), as well as a Digital Entertainment Credit which can be used to offset the costs of Hulu, Disney+ and Peacock TV.
As for seasonal offers, I have used offers from some of my AmEx cards to get discounts on both Peacock TV and the Disney Bundle – a video streaming subscription which includes Hulu, Disney+ and more.
Bottom line
Review your actual needs before committing to subscription services such as video streaming or fast delivery. Renting or buying the specific movies you want to watch, plus occasionally paying for single-month subscriptions, can not only reduce costs but also deliver a substantially more meaningful selection, do your research. Last but not least, keep an eye on the deals your credit card has to offer, as they can help you reduce costs even further.
Disclaimer
I may receive compensation when you click on links that I share.
This is not financial advice. I am not a certified financial planner or advisor, just an ordinary guy trying to sort out his own finances, sharing his perspective with no guarantees. Use the information provided at your own discretion. You are highly encouraged to do your own research before making any personal finance decision.