Are You Selling Your Leisure Time Too Cheap?

The last time I watched TV ads was in my dentist’s office. 

I was having my teeth cleaned. I watched a Home and Garden channel show purporting to do a complete kitchen remodel and an abundance of other work. All in a magical three weeks. 

Progress on the remodel was interrupted regularly by advertisements for pills that would remedy various maladies, if you were willing to risk the occasional side effect of sudden death.

Twice a year, I can live with that.

But TV advertising is coming back big time.

With streaming, I thought it was going away.

I was wrong. 

Only a few years ago we could “cut the cord,” abandon network TV, and sign up for streaming services like Netflix or Amazon Prime. Both offered thousands of movies and television series without a second of advertising.

Today, essentially all of the streaming services offer a choice. You can watch ad-free streaming at one monthly fee.  Or you can have lower cost streaming with advertising.

I thought I understood network TV.

It was “free” because it was entirely advertising supported. We could watch 40 to 45 minutes of a TV show if we subjected ourselves to 15 to 20 minutes of advertising. 

That was the deal.

 If you put no value on your time, it was “free” entertainment. Indeed, TV was routinely considered the lowest cost form of entertainment. Anyone with a TV set and a paid-up electric bill could spend hours watching.

Try, for instance, imagining yourself as a normal human being making this choice:

1. You can fly to Aspen, Vail or some other ski spot, stay in a hotel, bring thousands of dollars of special equipment and clothing, pay for a lift ticket, etc., and ski for, well, not that many hours.
2. You can buy a ticket on Ticketmaster to the performance of your choice for a small multiple of your weekly paycheck. Or…
3. You can stay home and watch TV.

Small wonder that watching TV is the primary form of entertainment for the vast majority of human beings.

Today, the introduction of two-tier pricing for streaming services has highlighted the value of our time. Except for Amazon Prime, the major streaming services now offer a lower monthly cost for customers willing to watch ads. (*With Amazon there is one cost, but you have the option of watching additional content with ads.)

That means we can calculate how much we are selling our time for as advertising viewers. How much it costs depends on the size of your household, the number of hours watching TV per day, and the number of minutes of ads you see in those hours.

Surveys have shown that Americans now watch about four hours of TV a day. The streaming services, unlike network TV, have fewer minutes of ads per hour. A typical figure is about six minutes per hour of viewing (but you can count on that to increase!). So, my back-of-the-envelope calculation says that this 120 hour per month viewing habit sacrifices 12 hours to watching advertising for the monthly fee saving of $3 to $8.50.

Divide the monthly savings by the monthly hours lost to watching advertising and you get your “compensation” for watching ads. The best rate you can get is on Netflix. It’s a magnificent 71 cents an hour if you watch alone. Watch with your significant other or a roommate and you cut the compensation in half. (See table below.)

The final irony is that the only way to increase your compensation per hour for watching advertisements is to watch less TV. Watch just one hour a month and you’ll be compensated just $8.50 to $3 for that hour.

The injustice of it all makes me think that I should start a new career. With unions coming back, maybe we need a new union. Let’s call it the Television Ad Viewers of America, or TVAVA for short. I’ll be the visionary president, of course. 

 I’ll get to work on this as soon as you all contribute enough for the private jet that will take me to jawbone the Big Guns of Streaming into a higher wage for ad viewers. With a monthly membership cost of just one dollar we’ll get there in no time.

Related columns:

Scott Burns, “A TV Epiphany,” 09/23/2018: https://scottburns.com/a-tv-epiphany/

References & Sources: Kayla Wassell, “Who Has The Shortest Ad Breaks? Disney+, Paramount+, HBO Max, Freevee, Amazon Prime, Hulu, or Netflix?,” 04/28/2023: https://cordcuttersnews.com/ad-supported-streaming-service-lengths/

This information is distributed for education purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product, or service.

Photo: by JESHOOTS.com

(c) Scott Burns, 2023