Less Money Than a Cup of Coffee

If there is one phrase that I would like to not ever hear again is "all for less money than you spend on a cup of coffee".  I don't know who came up with this phrase but frankly I think it's way over used. I know that the people that say this believe the phrase and most of the time are not trying to be sinister, sneaky or anything like that.  In most cases the value that their services or products offer are well worth their value, if they are fully used.

When you consider the amount of consumer investment that it takes for any type of mass produced/sold item such as music, movies, educational videos, tutorial websites, gym memberships, etc, the investment is well worth it.  The producer carries all the risk but if they are successful, they have the potential to reap huge profits.

There's two points of view on this.  On one hand the the provider is betting that his profit will come from mass number of sales/subscriptions.  The consumer is betting that his expense is worth it because the return will be worth it many times over.  In the case of a movie DVD, let's say that you buy the DVD for $20.00 and you and your family watches that movie. Let's say that there is four members in your family.  The cost of the movie is about $5.00 per person. Then you watch it multiple times so the price per view goes down from there since the movie is available for repeat views. Possibly later you even get to sell the disc back to someone else for $5.00, your cost is further reduced to a few dollars per view.  When you compare that to the cost of movie tickets, you have saved a lot of money. When you consider the costs for a movie production you are getting to enjoy the fruit from something that cost, possibly, millions of dollars to produce.  On the other hand let's say that you subscribe to a movie streaming service your family gets to watch hundreds of movies a month for a few dollars.  How then does that one cost of one movie compare to a small price for hundreds of movies for only a few dollars.  

As another example, let's say that you purchased a subscription to a tech learning website.  You get to purchase professional tutoring for pennies.   You get access to vasts amounts of information from experienced teachers.  This knowledge helps you in your career and you indirectly reap the benefits in terms of pay raises and a good salary.  But what if you're really busy and don't get to view but only a couple of hours a month.  In the latter case you're not getting the full benefit.

In any of these cases the consumer carries very little risk, a few dollars a month, which is much less than a cup of coffee.  So the phrase is, in fact, true; you get all that for less what you would spend for a cup of coffee.

The problem, from a consumer standpoint, is that there are many other providers competing for your pennies for many different purposes.  For example,entertainment services such as streaming music services, streaming movie services, satellite radio services, streaming tutorials, gym memberships, book services, magazine subscriptions, developer subscriptions, gaming services, etc, are all pitching the "pennies a day" phrase.  When you add all of these up, collectively it's no longer a few pennies a day but rather a few dollars a day or possibly tens of dollars a day.  When you add these up that could mean hundreds of dollars a month and thousands of dollars a year.  If you bought into every sales pitch with the idea that it only costs less than a cup of coffee would really drink twenty or thirty cups of coffee a day?

Just recently I read some numbers and I'm not certain if my math is correct, but it seems that Apple, for instance, makes more money from developer subscriptions than they actually collect from app sales.  How can this be?  This means that the profits come from selling a dream but the dreamer never really makes a profit. In fact, when you consider how much of an investment a developer makes by trying to create an iOS app they rarely come out of the red.  If you take into consideration that they must pay their $99 annual fee plus the investment in an expensive Mac, not to mention the amount of time in developing said app.  That could mean thousands of dollars spent on something that is nothing more than a hobby.

I'm in no way knocking the providers of these services.  Their services/products are worth it if and only if the benefits come to fruition directly or indirectly. What I am saying is that these providers must take into account all of the other services/products competing for my monthly dollars. Also I would like them to examine the value they provide compared to the vast sea of services in existence.  How does the value they provide compare to the other services competing for my dollars.

I'm thankful that we get so much for so little these days. On the other hand this may also be our curse as I look back to the monthly expenses that my parents had when I was growing up, compared to those our current generation has.  In the past two decades we've acquired many additional expenses that are necessities of life such as cellphones, internet service, software licenses, website subscriptions, etc.  These are all individually less than what I'd spend on a cup of coffee, collectively they are nickel and diming me out of my hard earned dollars.

So to the provider using the phrase "for less money than you spend for a cup of coffee", I say consider using a different pitch as your selling point.  Not because it's not true but because in today's society the consumer is having his pockets emptied one service at a time and hearing that sounds a little pushy.  And perhaps your sales pitch should revolved around the idea why your services are more valuable than the an alternative expenditure because lets face it just about everything out there these days costs less than a cup of coffee.



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