The television industry is growing increasingly worried that budget-conscious viewers may shift from expensive cable subscriptions to the web, The New York Times reported today. Thanks to the growth of free video websites such as Hulu and downloadable shows on iTunes, fans of "Lost" and "The Office" no longer need to subscribe to traditional cable and satellite services. In response, companies such as AT&T, Comcast, DirecTV, Time Warner Cable and Verizon have approached cable networks like Viacom (MTV, VH1 and Comedy Central) and Scripps (HGTV and the Food Network) to explore new business models which would allow viewers to watch shows online but only through a paid log-in.
Although my Time Warner bill is relatively high (around $150.00/month for cable, high speed Internet, DVR and HBO), the thought of unplugging my cable and being forced to watch "Gossip Girl" on my tiny VAIO just doesn't cut it. Other consumers feel the same way--earlier this month, CNET posted a useful list of inexpensive ways to stream online video and TV content from the Internet onto your flat screen. But while viewers can save mucho dinero in the long-run by ditching cable for Roku or AppleTV they must be prepared for a tradeoff--limited content, poor video quality and sketchy sound. According to CNET, Roku, which gives users access to Netflix's on-demand video service, lacks popular releases and video for non-HD titles is not DVD quality. Other options, including AppleTV, Vudu and 2Wire MediaPoint media player, also have a limited selection of videos and TV titles.
While some believe that cable operators face a similar dilemma to that of the newspaper industry--creating a workable Internet business model in an environment where advertisers are wary over paying top dollar for online content--I am skeptical that the fate of Time Warner and other companies (despite the recent bankruptcy of Charter Communications) is as dire. It will likely take a year at least for digital video players to improve so substantially that consumers dump traditional cable services, buying cable operators time to adjust their business model to better compete.
My advice? Unless you're eating Ramen to compensate for your soaring cable bill, hold off a little on purchasing a web TV box until content expands and quality improves.
Monday, March 30, 2009
Sunday, March 29, 2009
Take NYC Transit, Get Back $
Yesterday morning I took the 1 train all the way up to 218th Street to watch the Cornell men's tennis team play Columbia in the Ivy League opener. While I usually don't notice the subway advertisements (with the exception of those featuring Dr. Zizmor's dermatological services, because they're impossible to ignore in an amazing kind of way), one ad in particular caught my attention. As my family and friends know, I'll do just about anything to save money so I don't know how I missed this, but from January 1 until March 31, Chase is offering a Commuter Cash rewards program. If you enroll your Chase or WaMu Debit/Credit card here, you are eligible to receive $10 cash back for every $150 (for a total of $50) you spend on MetroCard vending machine purchases, Long Island/Metro-North Railroad/PATH train tickets, and New York City yellow cab fares.
I remember a similar program offered by Bank of America back in November, in which consumers who enrolled their BoA Visa debit or credit cards would get $10 back for every $100 they spent on public transit--including bridges and tolls--for a total of $100 cash back per card.
While the Chase rewards program is not as generous as Bank of America's plan, I am encouraged that both banks are reaching out to Manhattanites during this difficult economic time.
Friday, March 27, 2009
AmEx Flexible Payment Option: Worth Signing up For?
Several months ago, I received a call from an American Express representative offering me the Flexible Payments Option. The option sounded like a great idea at the time: a complimentary service that lets you defer payment for purchases over $200 on your charge card. According to the AmEx website, here's how it works. Your payments are divided into two categories: for small payments, your card acts as a charge card and items must be repaid in full. For larger purchases (over $200), your charge card can act as a credit card by allowing you to spread payments over time, instead of having to pay them off in full each month. Because enrollment is free, I signed up for the service and didn't think too much about it.
Last weekend, I left my AmEx at the Terminal 5 bar during a Cut Copy concert, and had to call customer service to order a new card. The customer service rep asked me if I wanted to keep my flexible payment options in tact. I said yes, but decided to do a little digging to discover if this plan seemed to to good to be true, and how American Express stood to benefit. Here's what I found out:
While American Express lets you temporarily suspend payment of purchases over $200, it wants you to pay off these items sooner rather than later. Because charge cards are supposed to be paid in full, AmEx charges a relatively high credit card interest rate (or APR) if you choose to utilize the flexible plan option. According to SmartMoney:
Each month, you must then pay your regular charges in full, plus the minimum payment (the greater of $20 or 1/50th of the balance) for the revolving charges. The remaining flexible balance accrues interest charges at a variable rate, typically the prime interest rate plus 9.9%, or 15.4% based on today's current prime rate of 5.5%. That's more than the average for variable-rate credit cards, which these days carry an average APR of 13.5%, according to Bankrate.com.
The verdict? Consumers who select charge cards do so because they want more control over their expenses. Those who want to spread out their payments over time would do better ditching their charge cards/flexible plan option and signing up for a standard credit card.
Last weekend, I left my AmEx at the Terminal 5 bar during a Cut Copy concert, and had to call customer service to order a new card. The customer service rep asked me if I wanted to keep my flexible payment options in tact. I said yes, but decided to do a little digging to discover if this plan seemed to to good to be true, and how American Express stood to benefit. Here's what I found out:
While American Express lets you temporarily suspend payment of purchases over $200, it wants you to pay off these items sooner rather than later. Because charge cards are supposed to be paid in full, AmEx charges a relatively high credit card interest rate (or APR) if you choose to utilize the flexible plan option. According to SmartMoney:
Each month, you must then pay your regular charges in full, plus the minimum payment (the greater of $20 or 1/50th of the balance) for the revolving charges. The remaining flexible balance accrues interest charges at a variable rate, typically the prime interest rate plus 9.9%, or 15.4% based on today's current prime rate of 5.5%. That's more than the average for variable-rate credit cards, which these days carry an average APR of 13.5%, according to Bankrate.com.
The verdict? Consumers who select charge cards do so because they want more control over their expenses. Those who want to spread out their payments over time would do better ditching their charge cards/flexible plan option and signing up for a standard credit card.
Will Recession Help Rich Kids Get Into Dalton?
Think the economic downturn will make the admissions process easier for wealthy parents hoping to send their children to elite New York City private schools? Not so, argues an article in today's Crain's New York Business. The reporter, Miriam Kreinin Souccar, cites "administrators" who suggest that kindergarten admissions has never been more competitive--with applications up at least 10%. The article suggests that despite the Wall Street meltdown and credit crunch, the growing size of Manhattan families, as well as the overall recession-proof nature of education, have not made getting into Horace Mann or Spence any less difficult. As the article points out, even parents who ponied up thousands at expensive preschools are still finding themselves disappointed:
A doctor whose son attends a prestigious preschool downtown applied to seven institutions, including Dalton, Dwight and Abraham Joshua Heschel. Her son was rejected at three and wait-listed at the rest. The doctor, who refused to give her name for fear of hurting the boy's chances on the lists, is confused about why her son—who scored an impressive 99 on the Educational Records Bureau entry test—wasn't accepted.
But despite the claims of Souccar's sources, I'm not persuaded that Manhattan private school education is truly recession-proof.
According to a conflicting Crain's piece that ran just last month (title: "Recession hits private schools"), many Manhattan parents are reporting higher acceptance rates than in the past, as schools want to ensure that they have full classes in the fall. Administrators are concerned that families may decide to pull their children out of private school if the recession worsens. As Emily Glickman, president of Abacus Guide Educational Consulting, put it:
"Private schools may be experiencing economic uncertainty. Some families will be leaving schools and the less competitive schools are looking to keep their classes filled.”
Reflecting on this trend, my brother, a senior at a prestigious Manhattan private K-12, has said that several of his classmates have been pulled out of his school because their parents can no longer afford to pay tuition. Last month, The New York Times described the troubles of families who must decide whether or not to keep their kids in private school for financial reasons. And back in November, a New York Magazine piece on the same topic quoted Victoria Goldman, author of "The Manhattan Family Guide to Private Schools," as saying:
"The hardest thing will be for admissions directors to figure out which new applicants will be able to stay the course."
Who can afford to stay the course? Those who can guarantee that they are able to pay $40K in tuition a year. But seeing as the net worth of most Americans has declined almost 20% since 2008 (and perhaps even more for New Yorkers due to the collapse of the financial services industry), fewer Manhattan families will be able to make that commitment this year. The result? Less competition for those coveted private school slots.
A doctor whose son attends a prestigious preschool downtown applied to seven institutions, including Dalton, Dwight and Abraham Joshua Heschel. Her son was rejected at three and wait-listed at the rest. The doctor, who refused to give her name for fear of hurting the boy's chances on the lists, is confused about why her son—who scored an impressive 99 on the Educational Records Bureau entry test—wasn't accepted.
But despite the claims of Souccar's sources, I'm not persuaded that Manhattan private school education is truly recession-proof.
According to a conflicting Crain's piece that ran just last month (title: "Recession hits private schools"), many Manhattan parents are reporting higher acceptance rates than in the past, as schools want to ensure that they have full classes in the fall. Administrators are concerned that families may decide to pull their children out of private school if the recession worsens. As Emily Glickman, president of Abacus Guide Educational Consulting, put it:
"Private schools may be experiencing economic uncertainty. Some families will be leaving schools and the less competitive schools are looking to keep their classes filled.”
Reflecting on this trend, my brother, a senior at a prestigious Manhattan private K-12, has said that several of his classmates have been pulled out of his school because their parents can no longer afford to pay tuition. Last month, The New York Times described the troubles of families who must decide whether or not to keep their kids in private school for financial reasons. And back in November, a New York Magazine piece on the same topic quoted Victoria Goldman, author of "The Manhattan Family Guide to Private Schools," as saying:
"The hardest thing will be for admissions directors to figure out which new applicants will be able to stay the course."
Who can afford to stay the course? Those who can guarantee that they are able to pay $40K in tuition a year. But seeing as the net worth of most Americans has declined almost 20% since 2008 (and perhaps even more for New Yorkers due to the collapse of the financial services industry), fewer Manhattan families will be able to make that commitment this year. The result? Less competition for those coveted private school slots.
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