The other day, I was sitting on my couch watching TV.  I grew tired of the constant coverage of the election primaries, so I reached over for the remote control to change the channel.  When I did, I saw a Blockbuster Total Access envelope sitting in a bowl on our coffee table.  I picked it up and realized that my wife and I still had not finished watching Talladega Nights - The Ballad of Ricky Bobby (Unrated Widescreen Edition). 

We started watching the movie about two weeks ago.  Because we have an 8-month old daughter, however, it is very difficult to watch a movie in one sitting.  In fact, our movie viewing becomes a three-part experience.  We can only get through about a third of the movie before something interrupts us or we grow too tired to continue.  

We happened to be two-thirds of the way through this movie when I found it in the bowl that day.  We made it a point to finish watching it that night and mail it back to Blockbuster the next morning.

Then I started thinking….How much do we pay per month for Blockbuster Access?  The answer was $9.99.  That price enabled us to rent 1 DVD at a time (unlimited) through the mail.  We had a 2-DVD limit per month, but we had 2 free in-store exchanges.  Thus, we could potentially watch 4 DVDs per month.  At the $9.99 monthly price, that calculated out to approximately $2.50 per DVD.  That’s a pretty good value.

The only problem was that we’d get through about one movie per month.  Thus, each DVD was actually costing us $9.99.  Not exactly the bargain I envisioned when we signed up for Blockbuster Total Access. 

We had two options: (1) speed up our movie watching, or (2) downgrade to a cheaper plan.  Option #1 was practically impossible.  That left option #2, but I didn’t jump at it. 

Instead, I hesitated and did some math.  I calculated the annual cost of Blockbuster Total Access.  The $9.99-per-month plan cost $119.88 annually.  The two cheaper plans available ($8.99-per-month and $3.99-per-month) cost $107.88 annually and $47.88 annually, respectively.

Spending $100-plus every year to struggle through one DVD per month just doesn’t cut it financially.  I thought about the $3.99-per-month plan, which was reasonable at just under $50 per year.  Many people would jump at that. 

I did not.  I cancelled our account completely.  Because we usually got through only 1 DVD per month, the $3.99-per-month plan meant that we were spending about $4 per DVD.  I didn’t think that was a good value.  Before you think I’m cheap, let me explain.

The real value with these mail-rental DVD plans lies in watching a significant number of DVDs per month and lowering the per-DVD-cost closer to $1.  For example, Blockbuster Total Access has a $19.99-per-month plan that gives you 3 DVDs at a time unlimited through the mail and 5 free in-store exchanges per month.  Let’s assume that a big family of 5 maximizes this plan and, in one month, rents 9 DVDs through the mail and uses all 5 free in-store exchanges.  That amounts to 14 DVDs watched in one month.  At $19.99, that works out to approximately $1.43 per DVD.  That is a much better value than my $3.99-per-DVD value.  And big families can, indeed, watch 14 DVDs per month.  If you have a family of 5, the children can probably make it through two DVD’s per weekend, and the parents (assuming they don’t have an infant child) might make it through 1 or 2 DVD’s per week.

My wife and I could not possibly achieve anything near a $1-per-DVD value, so we decided Blockbuster Total Access was not a good investment.  By opting out of the plan, we can now save about $50 to $100 in the next 12 months.  That’s a small amount, no doubt.  But it’s $50 to $100 extra we can apply towards a business opportunity or an investment.  For exampl, it represents 3 to 6 ounces of silver we can buy.  It’s an extra sum of money we can save for a down payment on a rental property.  It’s a significant chunk of the price of web design software.  It’s about one-quarter of what it would cost to hire someone to build a website for a business.  It’s……well, you get the picture. 

If you don’t maximize these monthly-charge plans, they usually are not good investments.  However, since these plans automatically charge your credit card every month, it’s hard to pay attention and evaluate whether they’re worth the money.  Thus, before they keep draining money from your pocket, you should sit down, do the math, and see if you’re getting any value out of them.  If you’re not, get rid of them.  You’ll feel better about the money you saved. 

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