Are Bundled Packages Really a Money Saver?

Photo: ShanMac / Flickr

Conventional wisdom suggests that buying things together in a prearranged package is better than buying items separately.  For example, if I’m hosting a super bowl party at my house, I could buy individual slices of meat, cheese, and vegetables, or I could just pick up a party tray.

If I’m tuning up my car I could buy the spark plugs, air filter, motor oil and everything else, or simply look for a tune-up kit.  The upside to the prearranged package is you generally get everything you need in a cost-effective way. On the downside, we sometimes end up with things we don’t need (like a plateful of uneaten raw broccoli).  There is at least one industry that has managed to turn this conventional wisdom upside down: home media services.

I recently noticed my internet speed had been dropping.  First, my computer didn’t respond as quickly.  Next, as my family and I watched streaming video we began to get interruptions.  So I’m ready to reevaluate my internet service provider, who also happens to be my phone provider and satellite tv provider (at least that’s what it says on the bill each month).  Have you seen the market place for these services lately?  It’s crazy.  Everyone is selling “bundled” packages.  The phone company has great deals on high-speed internet.  The cable company can hook you up with fantastic digital phone service.  They all tout incredible savings “for the next 6 months.”  Honestly, how do I know what is really the best deal?

Well, the first thing I have to do is figure out what I really want, and what I really need.  I WANT a phone service that has unlimited local and long distance calls, call waiting and 3-way calling, voicemail and caller ID, but I can get all of that from a cell phone provider.  That’s why so many have already dropped the traditional phone line.  I do NEED a landline for my security system and work related calls, but I don’t need any of that other stuff.  I guess we’ll just have to pick up the phone if we want to know whose calling.

Now for the TV, I WANT HD programming, 250 of America’s favorite channels, on-demand movies, DVR – the works.  I could argue that I really don’t NEED any of that, but for the sake of retaining some semblance of sanity in my home, let’s just say dad likes watching the sports in HD, the kids like pausing the cartoon channel, and mom enjoys the food network, so 50 of America’s favorite channels in HD will suffice.  As far as on-demand movies, we can stream from Netflix for a lot less, which brings up the last issue: internet service.

With more and more services going digital, most traditional methods of delivering service are becoming more and more obsolete.  We can stream TV shows and movies, use VoIP for phone service, and do just about anything else on the computer.  However, the more you do on the computer, the more bandwidth you’ll need.  This is where there may be differences between the providers in your area.  As I’m looking at my options, the provider I use now offers high-speed internet up to 10.0 Mbps, but a competitor is offering up to 25 Mbps.  Now I don’t know much about internet speed, but something tells me I WANT the 25 Mbps, but how much I NEED truly depends on my usage.  If I’m just checking email, viewing an occasional YouTube video, or doing online shopping, 5 Mbps may be more than enough, but as my online usage increase (more computers in the house, more streaming services) I’ll probably need more to maintain the same level of quality.

So even though I may save $40 a month “for the next 6 months,” the reality is I could save a whole lot more simply by unbundling my services and choosing only the services I really need.

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