The Economics of Netflix

Tyler Cowen points to a calculator to see if you’re saving money using Netflix.

But as he says, the per-DVD cost isn’t really the issue.

Personally, I’ve canceled my Netflix subscription three times. But never again.

Reason for canceling: the movie I have is never the movie I want to watch. They sometimes end up sitting around for months until I send them back.

It’s *perfect* for watching TV shows on multiple disks. But there aren’t any (left) that I want to watch.

Why I have a ($4.99) subscription now, and won’t cancel:


$100 box plugs into your TV and connects to your wifi. You can watch any of Netflix’s instant movies for free. Limited selection, but lots of good stuff (especially older stuff). Recent upgrade means the quality is usually excellent. (I have a a 720p projector with like an 11′ screen.)

All you need is the cheapest $5/month Netflix plan. You can also view rented (or purchased) movies from Amazon on Demand via the Roku box.

Netflix/Roku plus Amazon on Demand means–despite my unhealthy need to choose my movie at the moment–that I almost never go to the video store any more.

For $100 up front (chalk it up to gas charges, so free) plus $60 a year–the cost of renting 24 DVDs, or two a month–plus miscellaneous Amazon rental charges.

Unfortunately I still have that one netflix DVD lying around preying on my mind. I was in the mood to watch it when I put it in my queue…