Sunday, September 15, 2013

Oovie movie/Hoyts Kiosk $3.50 movie rental. Is it cheaper than paying $6 to watch a movie online?

I always find it interesting what leads us to re-evaluate our purchasing decisions. I recently returned a movie 16 minutes late to the Hoyts Kiosk and was subsequently charged another day. Totally my fault and those are the rules. But up until now, even though I'm an IT person and have set up a computer to watch catch-up TV on the larger television screen, except for a trial of Quickflix, I've not taken to watching movies via the internet.

However returning the movie started me to re-evaluate the real cost of hiring a movie from a Oovie/Hoyts Kiosk and the same would apply to renting a movie from a movie rental store. The question the becomes which is cheaper. Is paying $3.50 for a movie from a physical location cheaper than renting the same movie via the internet?

Of course the answers varies depends on your individual situation. If you are within walking distance of a rental store, or there every day for other purposes, then there is no additional cost in picking up and returning the movie. In my case however sometimes renting the movie requires two trips specifically for the movie, and sometimes one trip since the first trip may include shopping. The following are my costs.

Hoyts Kiosk rental fee: $3.50
Petrol: 5.9 km each way. Thus full return trip twice for pick up and return is  23.6 km.

Using the Petrol Cost Calculator the cost for petrol alone is $3.93 assuming petrol is price around $1.50 per litre.

The total directly identifiable cost for renting a movie from the Hoyts Kiosk is thus $7.43.

Whilst a car has fixed costs you can't avoid, there are variable costs such as the replacement cost of the car. There is only so many kilometres a car can drive before it needs to be replaced. Fixed costs such as rego, insurance are payable each year independent of how far the car is driven. Take the cost of the car (including finance), add the cost of items which wear such as tyres, and then divide by the number of kilometres you expect the car to last for and you'll find there is roughly an additional 20-30 cents per kilometre cost. If we include this cost the hidden cost of rental would be at least another $5.

The other cost is of course your time. For me this amounts to around 20 minutes each return trip.

Forgetting about the time aspect and additional car costs, you can see renting a $3.50 movie doesn't just cost $3.50. At a minimum for the cost of the movie and petrol it costs at least $7.43.

I decide to rent a movie via the internet for $6. The movie consumes around 1 GB of data. I have a 50 GB peak allowance (another 50 GB off peak) and I don't use that allowance which means for me the is no additional data costs. Thus the cost is just $6. But if I did apportion the data cost it would add around $1.

It really is hard to accept that a $3.50 movie ends up costing more than watching a $6 movie via the internet. The problem is how we compare immediate payment versus factoring in all the costs. We see the immediate cost of $3.50 is cheaper than $6 but don't generally consider the hidden costs.

Once you can accept the hidden costs and factor in all the costs, it works out that the total cost of hiring a $6 movie online is cheaper than the total cost of $3.50 for renting a movie from a Hoyts Kiosk.

Once you've set up your computer and online account, the time involved in hiring online is a fraction of the time involved in picking up and returning a physical DVD to a Hoyts Kiosk.

Often we don't do things we should until we get a bump. In this case the bump for me was the extra day fee. It was a bump I needed to have.

When you review the total cost of products and services you use also factor into account the hidden costs. Whether it is renting a movie, loaning a book from the public library, buying a printer for your computer, taking into account all the costs can lead to better decisions that can save you money over a period of time.

If you require assistance with your computer to connect to your TV to watch catch-up TV or online movies you're welcome to contact me.

Kelvin Eldridge
Online Connections
Call 0415 910 703 for computer support.
Servicing Templestowe, Doncaster, Eltham and the surrounding area.

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