Americans spend lots on communications annually

Americans spend lots on communications annually

John Anderson and Sharon Rapoport estimate they spend $400 a month, or close to $5,000 a year, keeping their family of four entertained at home. There are the $30-a-month data plans on their BlackBerry Tour cell phones. The Roanoke, Va., couple’s two teenage sons each have $50 subscriptions for Xbox Live and send thousands of texts each month on their cell phones. DirecTV satellite service, high-speed Internet access and Netflix for movie nights add more.

“We try to be aware of it so it doesn’t get out of control,” said Anderson, who with his wife founded an advertising agency.

By 2004, the average American spent $770.95 annually on services like cable television, Internet connectivity and video games, according to data from the Census Bureau. By 2008, that number ballooned more than 17 percent, to $903. By the end of this year, it is expected to have grown another 10 percent, to $997.07. Add another $1,000 or more for cell phone service and the average family is spending as much on entertainment over devices as they are on dining out or buying gasoline.

And those government figures do not take into account entertainment bought through iTunes, or the data plans that are increasingly mandatory for sophisticated smartphones.

For many people, the subscriptions and services for entertainment and communications, which are more often now one and the same, have become necessities of life, on par with electricity and groceries. And for every new device, there seems to be yet another fee.

“A subscription model is the perfect drug,” said James McQuivey, an analyst with Forrester Research. “People see $15 per month as a very low amount of money but it quickly adds up.”