One of my favorite things to do is relax while watching a good movie. If you like movies, you know exactly what I mean. Unfortunately, a movie addiction can get expensive. You can go broke going to the theater, and short of begging and borrowing from friends, the most cost effective way to support a movie habit is through rentals.

Before 2005, I would drive to the local Blockbuster or Hollywood Video and wander the isles looking for something to rent. I’d then pay the clerk the $5 a pop for something I was only partially interested in, only to end up running back to the video store at some odd hour because my five day rental turned out to be only a two day rental. All told, I spent more time getting the movies than watching them, and sometimes I’d pay more money than if I actually bought them outright.

Making Life Easier

In 2005, I signed up for Netflix’s $17.99 plan (In July of 2007, this price was reduced to the current price of $16.99), which allowed me to have three movies at home at a time . When I was done with each movie, I would pop them into a postage paid envelope, drop them in the mailbox, and another movie would be mailed out to me. In a short time, Netflix changed the way I watched movies the same way that the digital video recorder changed the way I watched TV.

I no longer had to wander around the store looking for something I hadn’t seen, and #1GF! no longer had to waste her time waiting around for me to pick something. Because I was making my choices from my PC, I had access to reviews and movie information to help me make better and faster choices than I ever could standing in front of a wire rack full of obscure “staff recommendations” (#1GF! might argue whether or not I actually made better choices, but we both know that potential is important.).

It was all so easy, that I have remained a Netflix customer for over three years. In that time, I’ve rented 415 movies from them and watched around 30 more through their on-demand service. While I have probably been guilty of visiting a Blockbuster store a couple of times, I can’t say that the experience gave me any incentive to give up my Netflix account.

Has Netflix Been Cheaper Than The Video Store?

There’s no question that Netflix has made renting easier, but while going through my bills this week, I wondered if it had been any cheaper. I went through my rental and payment histories and discovered that over the last three years (from 1/3/05 to 1/3/08 to be exact), I paid Netflix a whopping $673.74 to rent 415 DVDs. That seemed like a lot of money until I broke it down into the cost per movie.

To be fair, I decided not to include the 30 free on-demand offerings in the calculation to offset the possibility that I might’ve gotten free Blockbuster rental coupons in the mail during the past three years. Because an in-store rental at Blockbuster costs a hefty $4.82 per movie, eliminating those 30 movies didn’t help to tip the scales in Blockbuster’s favor. Those 415 movies cost me $1,326.56 less by renting them through Netflix! Yes, you’re reading that right. That’s over thirteen hundred bucks over three years, which means

Is this typical, though? Would I have rented two to three movies per week over the last three years if I had to go to the store, or does the constant flow of movies from Netflix knock down the cost per unit by increasing the number of movies I watch? While I think that Netflix does provide me with more movies to watch, it’s not just the cost per movie that makes Netflix cheaper. The overall cost is cheaper, too.

Let’s say that I never signed up for Netflix, and the aggravation of the stores caused me to cut my rental habit down to only two movies every other week. I think that’s a pretty large exaggeration, but let’s go with it anyway. Those 156 movies would’ve cost me $751.92 from a Blockbuster store over the last three years. Even at a rental rate of one movie per week, the Netflix 3 movies out at a time plan still would’ve been cheaper by $78.18 ($26.06 per year), and would’ve provided me with two to three times as many movies. If I dropped to the 1 movie out at a time plan (which would make sense if I was only renting 1 movie a week) the savings jump back up to $412.10 ($136.70 per year)

Verdict: Netflix Saves Money

Cost Per Movie:
Blockbuster (in store): $4.82
Netflix: $1.62
Difference: Netflix costs $3.20 less.

Total Cost For 415 Movies:
Blockbuster (in store): $2,000.30
Netflix (3 out plan): $673.74
Difference: Netflix costs $1,326.56 less.

Total Cost For 1 Movie Per Week for 3 Years:
Blockbuster (in store): $751.92
Netflix (1 out plan): $339.82
Difference: Netflix costs $412.10 less.

See what I’m getting at? Whether you like to watch a movie every now and then, or you’re a real movie buff, you’re not saving money by going to the video store. Whether you sign up using the link below or sign up on your own, I’m telling you that Netflix will not only change the way you rent movies, but it will save you money.

Are you still renting from the video stores or did you make the switch to Netflix? Do you prefer one way or the other?

Posted in Money