Tuesday, September 23, 2014

Students rack up media bills of $177 a month

"I never thought about how much I was spending on media. I just took it for granted, and now I realize that it is more than I would have imagined." -- student at Instituto Tecnologico de Monterrey, Mexico

Versión en español

I recently surveyed 22 students in a seminar on how much they spend on media every month. Bottom line, these students at an expensive private university in Mexico are spending the equivalent of about $177 a month on various types of media.

I asked them to include all kinds of media expenses, including those paid for at home by their parents. Many of these expenses were not part of anyone's budget 15 years ago:
  • Internet at home and on mobile devices, mobile apps
  • Telephone at home, mobile
  • Movies at cinemas, on physical media, online, streaming, apps
  • Television, on cable, on physical media, streaming, apps
  • Music and podcasts on physical media, online, streaming, apps
  • Books, ebooks, apps
  • Newspapers and magazines, home delivery, digital subscriptions, apps
  • Videogames on physical media, online subscriptions, apps
  • Digital media subscriptions, apps
One student's monthy total of 3,906 pesos = $294 USD
Nearly all of the students said they had a Netflix account, for which they are paying about $8 USD a month. This is their preferred way to watch movies and television programs.

Many mobile apps are free, of course. And some students admitted that they buy pirated versions of  products because they are cheap and widely available, especially in street markets.

That $177 a month in media spending works out to about $2,129 a year in a country where the median disposable household income, after taxes, is barely twice as high at $4,493, according to the Organization of Economic Cooperation and Development. (The median means half of households have higher income, and half less. It is more meaningful, I believe, than the average, in a country with significant income inequality.)

The students at this university, el Instituto Tecnologico de Monterrey, are not a representative sample of Mexican society. The school is academically selective, and students generally come from the higher income levels. The cost of tuition alone at Tec is about $13,000 USD per year.

Student comments

Nearly all of those surveyed wrote something equivalent to this comment, by the student who had the largest monthly expenditure:
"I never thought about how much I was spending on media. I just took it for granted, and now I realize that it is more than I would have imagined. After seeing commentaries by my classmates, I realize I can save a lot by buying a monthly plan for movie content [she was one of the few who did not have Netflix]...I don't buy print media except for SKY magazine [which comes with the satellite TV subscription]."
Bad news for print media
Said another student, "I spend most of my time consuming media on the Internet. And a large part of that time is spent on the digital versions of newspapers and magazines, and that does not represent an expense for me as a consumer."
Bad news for musicians
One student was surprised to read in The Guardian that musicians receive only 0.4 cents for each stream of their music from Spotify. One million streams earns a musician $4,000 USD. "I had never thought about the viewpoint of the artists...They are also affected. What they get is a pittance..."
Bad news for movie theaters
Said another, "There are more and more alternatives to enjoy media at a lower cost. For example, I pay $8 USD a month for movies and music online [Netflix] and the savings is really high if we compare it to going to a movie theater that on average costs $16-18 USD just to see one movie [that would be for two tickets]. The same with music if we compare the cost of a CD to the monthly subscription to a streaming service."
Nurturing local industry

Students in this seminar have been doing presentations on the major creative industries operating in Mexico. They noted that the four biggest players in the music industry in Mexico -- Warner, Sony, EMI, and Universal -- are all multinationals.

The story is similar in the film industry, in which the top five distributors are Disney, Fox, Sony-Columbia, Warner, and Universal. Mexican movies captured only 12 percent of the 248 million in total attendance in 2013, according to the Instituto Mexicano de Cinematografia.

As part of our course students are proposing new digital-based media enterprises that could develop the creative industries in Mexico. The early iterations of their proposals are very promising.


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