Does Cord-Cutting Really Cut Costs?

Category: Television

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.

Cord cutter cost savings

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...

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Most recent comments on "Does Cord-Cutting Really Cut Costs?"

(See all 36 comments for this article.)

Posted by:

15 May 2018

I never had cable, so no cord to cut. My neighbor has Comcast and pays over $200/month.

I pay $45/month for wifi (which I would have anyway). I pay $11.81/month for Netflix, $5/month for Acorn and $120/year for Amazon Prime ($10/month).

My streaming charges total $26.81/month. Add my wi-fi and it's $71.81. That's a far cry from my neighbor's $200+ monthly cable bill.

I probably save a lot of money by not being much of a sports fan. The sports I enjoy are not the usual (mostly rugby and track).

Posted by:

15 May 2018

We are the perfect candidates for cutting the cord for several reasons.

1. We have been DirecTV subscribers since 2002, long before AT&T took them over. Our subscription is still a DirecTV one, not U-Verse. We do NOT have any bundled services. We have no "home" phone and our Internet service is stand-alone. So, there's no price increase involved in dropping DirecTV, as it will not impact the cost of my Internet service.

2. As for streaming capabilities, we have four smart TVs plus an AppleTV, which I really like. We also have Amazon Prime.

3. DirecTV costs us $84/month. That $84 is actually the "I called retention and got a $55/month reduction" price! We do NOT have any premium channels. The service is expensive, and we've noticed the quality of the signal has really declined. We have much better quality when we stream.

My goal is absolutely to cut that $84 cord. My husband worries about things like "live TV", being able to record, and having the exact "channels" available. But, I don't see these as big issues when streaming services now offer so much content. I can easily imagine that if a few shows were not available, they'd soon be forgotten in the adjustment. However, to make things a little more seamless for him, I would be willing to try DirecTV's NOW streaming service. It is much cheaper than the satellite service. If the picture quality is good, I would be okay with adding that to the mix.

The only reason I cannot do it right now is that a little over a year ago, I was incredibly short-sighted and took advantage of DirecTV's equipment upgrade, which required a 2 year commitment. I hadn't had a commitment to ANY service in ages. But, I went against my typical "I don't do commitments" thinking and agreed to it. So, now I have a little over a year before I can dump satellite. My own fault.

Posted by:

15 May 2018

I thought about only having internet but Comcast
raises the price of internet only so it is the same price as basic cable TV + internet , so basically forced to have at least basic cable TV + internet
the problem is since cable is a monopoly this needs to be regulated by gov't to let people save money by buying what channels and internet they need instead of forced into packages that double in price after the first year

Posted by:

15 May 2018

What I would like to see is deregulation of the cable lines like was done with land lines (and electricity), so there could be multiple providers in the same geographic area. It worked with Ma Bell and should work with the CATV industry. Incumbent company owns cables and rents bandwidth to competitors who sell services (TV Phone and Internet). What is holding it back, political issues. Something like this needs to hear from the public to their legislators. Monopolies are a thing of the past and our state political bodies need to change the climate. Or, as an alternative, towns could allow a company to install fiber (FTTH) and rent bandwidth... competition is the lifeblood of our economy.

Posted by:

15 May 2018

Don't forget to check your local library. Many offer streaming movies and tv shows through apps like Hoopla, all for free.

Posted by:

15 May 2018

We cut the cord a couple of years ago, and we seem to switch back and forth between Comcast and AT&T, whichever has the better deal for 12 months. The problem, though, is that sometimes to get the best deal, you have to take the TV package, whether you want it or not. For example, our 50 mps internet for $40/month from At&T expires next month. The best deal we can get from either Comcast or AT&T is abougt $60 for 60 (or 100 from Comcast) mps along with some TV channels. Oh, well. We don't have to watch them!

Posted by:

15 May 2018

About a month ago I painfully signed another 2 year contract with Comcast (after having said the the past 2 years I would never sign another 2 year contract. The early cancellation fee is now $60/month not used. The only reason I stayed with cable is because is record Jeopardy and Wheel of Fortune every day. Also, when I want to watch a show I only watch after recording it so I can fast forward thru commercials. I never could find anyone who could tell me how I could record from Hulu or the other options.

Posted by:

15 May 2018

We cut the cord several years ago, put up an antenna and subscribed to Netflix. More recently we have installed apps for Kodi, Terrarium, and Mobdro. The problem for the future is the escalating cost of internet only. We have to make a decision in a month or so, as our contract is up. We may be forced to add some kind of TV package to get a reasonable rate. Oh, to be in almost any other country for reasonable internet service.

Posted by:

Bob Rambaldi
15 May 2018

In Tucson, I cut off Comcast, got DSL service with Century Link for $35./Mo., bought my own modem, got Netflix which I share with friend, so basic cost CL DSL $25. plus NFLX $14. total about $40..streaming with DSL was fine an d surprisingly had no buffering delays like I had with cable..I could give a rat's butt for sports or TV with 15 or 20 commercial interruptions per hour..

Posted by:

Jackie K
16 May 2018

Yes. Although my internet went from 44.95 to 64.95, my total costs are 64.95 + 5.99 for CBS All Access + 99 a year (Soon to be 119 a year) for Amazon Prime (more than TV access there, I got it mostly for the family plan's shipping.) My cable bill prior to this move was 159.95 + the 99 a year for Amazon Prime.

Posted by:

16 May 2018

It is all going to change when we lose net neutrality

Posted by:

16 May 2018

When you use Linux all is good.

Posted by:

16 May 2018

We did a partial cord cutting in 2015. Previously we had Dish Network for TV and Verizon FIOS for internet and phone - total cost $225/month.
Now we have a minimum Dish package for for TV5 Monde, Verizon internet only, Callcentric VOIP for phone, TIVO with lifetime subscription, Amazon Prime, and Hulu. Total cost $140/month.

Posted by:

David Hakala
16 May 2018

I sold my last TV set in 2009. I found the painting I hung in its place more interesting.

Anything I want to watch is being torrented right now. The producers don't seem to mind.

HBO has done nothing to oppose pirating of "Game of Thrones" episodes, which have become the most downloaded content in bittorrent history.

Old movies aren't downloaded enough to be worth a lawyer's letter. The studios long ago made all the money they're going to make on such things.

This week's release of a $100 million Avenger's spectacular is another story. I don't want to see that, it spoils my childhood memories of comic books and bed sheets tied around my neck. :-)

I still buy documentaries to support their producers, who are actually doing some good in this world. But the Hollywood "entertainment" industry can bite the Big Enchilada.

Posted by:

16 May 2018

I never had cable since I always was satisfied with the over-the-air broadcasts available to me wherever I lived.I moved to my current location four years ago and give up TV viewing due to no over-the-air broadcasts and the monthly expense of cable.I do have internet service for $29 a month through a wireless ISP with very reliable service.2 mbps is fine with me as it is used for regular web browsing,e-mail and internet radio, fast enough as my needs.As time as gone on,I find most TV to be boring, repetitious,contentious and obscene in some cases.

Posted by:

16 May 2018

We cut the partially cut the Spectrum cable, having kept the Internet cord (was $138/month, now $68/month) and replaced it with ROKU (one time $70), Hulu+, Netflix, and Amazon Prime ($40/month)and a digital antenna for local channels (one time $50). It has been two years, and we don't care to look back!

Posted by:

16 May 2018

am not too sure that I could "cut the cord" from DirecTV. I am watching more and more Netflix and Amazon Video, the truth is. . .I am hooked on Netflix and Amazon Video!!! But my Hubby is "hooked" on several programs not offered by either Netflix or Amazon Video.

So right now, I am in a dilemma. I want to "cut the cord" but I can't. Someone said that DirecTV is not the same as it was before AT&T took over and they are spot on!!! I totally agree. I have had DirecTV since October 1998. But, I have been greatly disappointed with DirecTV since the AT&T merger.

My DirecTV is NOT U-Verse, either. . .It is still simply DirecTV. I am greatly upset over the increase in prices and the extra charges or fees. It is ridiculous and I believe this is AT&T doing all of this.

Posted by:

16 May 2018

Though a day late, but dollars ahead, I have found my local library absolutely free (save a $3us/year tax on my property bill) and with internet only ($30us/month [we are rural so 'fast' doesn't exist here really] and we exist at ~12 GHz or less)there's YouTube and I do subscribe to Amazon Prime so call that $120us/year. Along with 'BookBub' (free) and streaming NPR and BBC since we are in a radio-shadow that makes phone service exactly the same as 1951 Italy, just like my FM reception in any canyon, my MONTHLY cost for internet, Amazon, and books costs me about $41/month. I have a cheap Trackfone I can use if I want to walk up the driveway about 1/4 mile or so, and doesn't bother me much to miss about 90% of all incoming phone calls. In MOST respects it's FAR better than 1951 Italy - and in an emergency, a real one, I have a CB with a 1K watt 'kicker' on it and find REAC does just fine if there's an emergency - and it actually still works if a tree takes down multiple power-telecommunications lines, unlike my neighbors who pay for VOIP and then find they also need a Cell phone and plan as a back-up.

If I cared I could reactivate my General Radio License (no cw required any more at all)and if I needed,get someone in a near-by city to patch me through to a friend or hardware store.

So, yeah, I think I was paying just over $270 a month for cable and phone when I had a housemate addicted to old TV shows, sports, and had to have a real 'land line' until the power went out and he found out that they just don't build 'land lines' like they used to- or like we do on a ranch in the Great Basins and Ranges of NoCal and NW-central Nevada. 5 ranches get together and spend a couple of hundred split 5 ways to keep a phone line open down our 15 miles or so of driveway.

Adjusted for inflation I think that's about what we paid in the 1950's for a HUGE 'Channel Master' with a rotating motor on top of an ~200 foot Western Red Cedar tree about 15 feet from the house(which really didn't get it completely above the valley crest -- and that hooked to an 'in-attic' power-signal booster home made from the ARRL handbook to receive 1 clear channel and 2 filled with snow, ghosts, shadows and noise. FM was basically not around, but AM proliferated, especially at night with good 'skip'. It's when I fell in love with just how amazing Libraries are.

So I think that accounting for everything in 1950 dollars except the phone, we are paying about the same. But have FAR less convenience. With only 1 TV station there is never a question what to watch. And our phone was a 'ring-down' because my grandfather worked for the City so it was free, albeit 12 party line that the city let us keep into the mid 1960's when we had to switch to dials with numbers and letters.

And I STILL feel a tad too connected.

Posted by:

Linda HD
17 May 2018

An FYI for all Comcast customers.

If you intend to get rid of Comcast as soon as your contract expires be aware that Comcast does not honor their contracts' ending date.

Buried in the fine print of their contract you'll find they require a 60 day written notice of termination of service. (To be on the safe side notify them at least 65 days in advance.) Without that they will terminate your service on the day you request but will continue to bill you for 60 days of service - service you don't have.

Posted by:

Keith F
21 May 2018

I got fed up with the $200+/month Comcast Triple play Jan, 2017. Taxes, fees and equipment alone were $60+/month even with my own router/cable modem and we only had the HD DVR on one 4K TV. We made due with limited SD content on the other two HD TVs. We already had Amazon Prime and Netflix.

I kept the 150 mbps Comcast internet ($80/month), replaced Comcast Cable TV with Sony PlayStation Vue ($40/month) and home phone with Google Voice (free) and Caller ID Name and Number (CNAM) with E911 services from Callcentric ($1.50/month). I figure I'm paying about the same monthly for content/services as I was for Comcast Cable TV and Phone.

The big savings for me comes from eliminating the taxes, fees and equipment charges. I had bought 3 Amazon Fire TVs (two sticks and one box at black Friday prices for about $140) and an Obi200 box (about $40 on Amazon) for the VoIP phone. These are one-time purchases with breakeven at about 3 months.

Finally we could watch the same content on all 3 TVs, 4K from Amazon Prime and Netflix on the 4K TV and HD on the two HD TVs plus we have better quality phone service!

If you're streaming most of you content, you have to consider monthly data caps. To combat this, I bought later an HDTV antenna (about $20 on Amazon), a 4-tuner Quatro from SiliconDust (about $100 black Friday price at Best Buy), a 4TB MyCloud from Western Digital ($120 refurbished from WD Store) and DVR/Guide subscription from SiliconDust ($35/year). The breakeven on this was about 4 months but most of the content we watch we can watch live or DVR from Over-The-Air (OTA) with this setup. Content is broadcast over our local network and played back by the HDHomeRun app on any of our devices, Fire TVs, Fire Tablets, Windows computers, Android phones...

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