Does Cord-Cutting Really Cut Costs?
It’s been more than a decade since “cord-cutting” entered our lexicon. The term refers to consumers who have canceled their cable TV services and rely on Internet video services such as Netflix, YouTube, Amazon Video, and Hulu, over-the-air broadcast TV, or some combination of the above. The promise of cord-cutting was “big savings.” But have those savings materialized? Let's do the math -- read on...
Will You Save Money With Cord Cutting?
The answer is yes, perhaps, or maybe not. It all depends on your list of "must haves" when it comes to channels and content. If you go with an "internet-only" plan, and add Netflix, then you'll have lots of movies to watch, but you might be missing your favorite shows on ABC, CBS, NBC, FOX, ESPN, CNN, Comedy Central and other channels in your cable provider's lineup.
At $20 a month, SlingTV's "Orange" package is cheaper than cable, and includes 30+ popular channels. In 2016, a consumer who switched from Comcast’s average cable TV bill to a service like SlingTV saved a nifty $20 per month. But in 2017, despite new competition from providers like DirecTV Now, Hulu and YouTube TV, the average consumer was saving only $16 per month. Those numbers come from M Science, a research firm that tracks consumer transaction data.
When the cost of Internet access, extra pay-TV packages to get all the channels the family wanted, and home telephone service was added to the average consumer’s monthly bill it actually became $15/month more than the equivalent services delivered via a cable subscription. How did the promise of lower costs become a cost increase? The answer lies with the incumbent players.
The price of “raw” Internet access from a cable company keeps going up, even faster than overall cable package prices. Comcast, Cox, et. al., want to sell you a bundle of services -- the classic “triple-play” of Internet, TV, and phone service. They offer lower prices for the bundles they want to sell, and raise the price of Internet service alone.
If you insist on cutting all but Internet from your bill, you may find its price soars until it’s barely ten bucks less than the price of the triple-play. Add Netflix, Hulu, and other must-have streaming services, and you’re soon paying slightly less to your ISP but significantly more overall.
The cost of programming is the lion’s share of all viewing options’ prices. Sports, America’s most expensive addiction, is often what keeps families tied to cable TV, or pushes the cost of cord-cutting above the cost of staying tied to cable. ESPN is the biggest culprit; its top 4 channels - ESPN, ESPN2, ESPNU, SEC Network - account for more than $9.00 of the average monthly cable bill. The Fox Sports family - FS1, FS2, Big Ten Network- costs a combined $1.86. The standalone NFL Network is the only other sports channel that costs more than a dollar per month. These stats are courtesy of SNL Kagan, a media and communications market research firm.
Going A la Carte
But again, you have to shop around to find a provider that offers the content you want. In contrast to Sling TV, both YouTubeTV and DirecTV Now include ESPN, ESPN2, Fox Sports, and various regional sports channels in their $35/month packages.
If you use a Roku box to stream to your television, there are quite a few free channels that may satisfy your content craving. The Roku Channel offers hundreds of popular movies, as do Crackle and TubiTV. If you subscribe to Amazon Prime, there are lots of movies you can watch for free on Amazon Video. Amazon also produces quite a few original and highly-rated TV series.
Saving money is not the only reason people cut the cord. The ability to buy a smaller bundle of channels and customize it with a la carte channels to suit one’s viewing tastes is very appealing to some. So is being able to watch one’s favorite shows on a variety of screens, not just the big one in the living room.
Still others are attracted to the deep libraries of old movies offered by the likes of Hulu. Finally, there are new generations of viewers who are “cord-nevers,” people who grew up with mobile entertainment and can’t imagine life any other way.
Are you a cord-cutter? Tell me which combination of streaming services satisfies your family's viewing needs, and how it compares to the cost of cable. Post your comment or question below...
This article was posted by Bob Rankin on 15 May 2018
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Article information: AskBobRankin -- Does Cord-Cutting Really Cut Costs? (Posted: 15 May 2018)
Copyright © 2005 - Bob Rankin - All Rights Reserved