Cutting the Cord

Would you like to cut a $1,000+ a year from your cable TV bill?

Cutting the cord -- cancelling cable TV -- is a big thing today. Many people are discovering they can watch the programs they want from other sources, easily saving over a thousand bucks a year.

Unless you're an avowed couch potato, the chances are good you can watch most or all of your favorite programs without paying an outrageous cable TV bill.

Why is Cable TV so Expensive?

The two main reasons cable TV costs so much is 1) Lack of competition and 2) Lack of consumer control over content. Here's what I mean by that.

Lack of Competition: That's an easy one. When there's only one gas station in town, the owner can charge pretty much whatever he wants, yes? It costs huge amounts of money to lay cable to homes and businesses so the barrier to entry for a newcomer in the cable TV business is high. Making things worse, the existing cable cos have managed to buy off our legislators making it difficult or flat-out illegal in many areas for new companies to come in, thereby protecting their precious monopolies.

The only thing keeping cable prices in any kind of check was satellite offerings such as Dish and DirecTV. But due to the way the cable cos package internet and TV service, even that check is minimal.

Lack of Consumer Control over Content: This factor is rarely discussed but it makes a bigger difference than you'd think. With traditional cable TV, you watch what is provided and when. Your only control is choosing which channel to watch from those available in the package you subscribe to. That's it. You have no control over what is transmitted or when. Except for some minor time-shifting using a DVR, you are hostage to the cable cos schedule. And even with a DVR, the program still has to "air" before you can record it.

The internet turns this entire model on its head. With streaming on the internet, the consumer chooses what to watch, from whom, and when. Internet service is what we call a "dumb" or "empty" pipe. You aren't paying them (Comcast, AT&T, etc.) to fill the pipe (with TV shows). You, the subscriber, have complete total control over what goes through that pipe. And that, dear reader, changes the economic ecosystem of paid television in a huge way.

That freedom to choose unshackles you from the cable cos content provider agreements (their contracts with the various media companies that provide all the channels) letting you choose any content provider you want, including those with no agreement with your cable co. You might call that "content competition" -- and that is what's missing from traditional cable TV.

An Industry Quaking in their Ferragamos

This very idea of content competition that cord-cutting affords consumers has the entire television industry unable to sleep at night. There are countless billions of dollars flying around annually in all different directions between numerous interests in this industry: Between cable providers, content providers, networks, advertisers, etc.

No one knows how the cord-cutting endgame will work out as all the players are frantically trying to secure their respective futures in this seismically shifting paid television landscape.

This is all good news to consumers!

À la Carte Finally Arrives (sort of)

Cable TV subscribers have been clamoring for years for à la carte (picking only the channels you want) pricing yet it's nowhere to be found. Even today, the cable cos love to tout the huge number of channels they offer. But who cares? According to Nielsen Ratings, the average US home receives 189 channels but those subscribers only watch about 17 channels! Less than 10 percent of channels have regular viewers.

So why do the cable cos lard their lineup with all that crap, over 90% of which goes pretty much unwatched? To be fair, the fault doesn't lie entirely (or even mostly in some cases) with your cable co. Most of the popular channels are owned by media companies like ABC, CBS, NBC, Fox, HBO, Time Warner, Disney, and others. If your cable co wants to carry a popular channel they are usually obliged to carry some or all the crap channels offered by that media company as well. It's a huge money grab and the american TV consumers are the ones being robbed. This makes à la carte pricing pretty difficult.

But not with streaming where the focus is on programs, not on channels. No longer are you forced to pay for content that doesn't interest you. Streaming is the way to get the à la carte pricing model that's been teased for so long but never came about.

Lots of people today especially younger folks (20s and 30s) don't subscribe to cable TV at all. They get their internet access from Comcast or whoever, but that's all they get. This particular demographic streams everything. And as that trend continues and accelerates, content providers are getting on board with their streaming offerings so they can reach these new generation cord-cutters.
 

Nov 2017 update:

The streaming universe is starting to see a balkanization of streaming providers. As streaming catches on and more people are demanding their favorite programs be made available via streaming, we are are seeing more content producers setting up their own streaming services and pulling their content from the existing established providers. Of course, they're doing this to make more money.

 

Previously, a small combined handful of streaming services, such as Netflix, Amazon, and Hulu might have had most or all of your favorite programs but that is changing now. e.g. CBS programs aren't available except on CBS All Access. Disney will start their own streaming service in 2019 which means all Disney owned or produced content including the Star Wars franchise will likely not be available anywhere else. And some traditional provider-only companies like Netflix and Amazon are now producing content as well -- some of it pretty good -- and it's unlikely they'll license that to competitors.

This isn't good news. But at least viewers still have the choice if they want to subscribe to any particular streaming provider or not. If the landscape becomes too balkanized then some producers may find they're losing more money than if they simply licensed their content to larger providers, such as Netflix. As you'll see below, there's a bunch of streaming providers and more are on the way. You'll likely have to choose several to get all your favorites shows.

This isn't surprising. The entertainment industry isn't going to sit idly by while ten of millions of viewers switch to streaming and cutting a thousand-plus dollars a year from their cable bills. I mean, all that money previously had to go somewhere, right? A lot of went to the entertainment industrial complex and they aren't too happy to lose it. Balkanizing streaming offerings is one way they are clawing back some of that savings.

This is just the next act in the epic play of "How Streaming is Changing TV". Stay tuned.


A Buffet of Choices

Today's streaming landscape is better than ever before. We are on the cusp of a massive change in how people watch TV. A world where people can subscribe only to what interests them and leaving all the other cable company mandated crap behind.

So how do you get access to this buffet?

You need a small media streaming device such as a Roku or Apple TV device. Some newer TV sets have media players built-in, but those players are often sluggish, have crappy interfaces, and are generally inferior to Roku and Apple TV. A TV with Roku built-in is fine, however. So which one to choose? If you have an iPhone or iPad, then Apple TV offers a cool screen-casting feature. But otherwise the two devices are largely similar.

Next you need to determine where to get your content. The services you subscribe to depend on what type of programming is important to you. Are you a sports fan? Movie buff? Enjoy the latest sitcoms? Listed below are several content providers and what they're good at (as of this writing) so you can tailor your own suite of providers focused on your interests.

 

In general, most non-sports programming is easy to get via streaming. Cord-cutting sports fans will have a harder time seeing their favorite teams and certain games because of transmission rights and the obscenely huge amounts of money involved in collegiate and professional sports broadcasting. No one single streaming provider will have everything a serious sports fan wants. It may take several and they tend to be expensive.

Most subscription services are by the month and have no contract. Cancel anytime.

I. Subscription Services

The following was accurate as of mid to late 2016. Things change rapidly with streaming offerings, so if a service looks interesting, you should research it further.
 

  • Acorn TV
    Costs: $5/month or $50/year
    Best for: People who like British TV shows, old and new
    Has lots of classic and current british TV shows. Also carries programming from Ireland, Canada, Australia, and New Zealand.

  • Amazon Prime Video
    Costs: $99/year ($8.25/month) for Amazon Prime 2-day delivery. Prime Video is a free add-on to Prime membership.
    Best for: People who already subscribe to Amazon Prime 2-day delivery membership.
    Includes movies, TV shows, and original programming. Does not include the latest movies or TV shows. Prime video lacks many (most?) movies and shows that people want to watch and would probably not be worth it were it not free with Amazon's Prime Delivery service.

  • BritBox
    Costs: $6.99/month
    Best for: People who like BBC and ITV programming.
    More narrowly focused than Acorn, carrying only programming from the BBC and ITV. These two providers produce most of the best content in the UK. So if you particularly like British TV, then you'll want BritBox.

  • CBS All Access
    Costs: $5.99/month or $9.99/month no commercials
    Best for: People who like CBS programming
    Access current and older CBS programming with no post broadcast delays.

  • HBO Now
    Costs: $15/month
    Best for: People who like HBO shows
    This is HBO but without a costly cable TV subscription. You can watch all HBO movies, specials, documentaries, and original series like Game of Thrones. This is what many people have been waiting for -- HBO without needing a cable TV subscription.

  • Hulu
    Costs: $8/month with ads, $12/month without ads
    Best for: People who like traditional network TV shows.
    Hulu carries new shows from ABC, Fox, and NBC. Hulu is also producing some original shows.

  • Netflix (Streaming)
    Costs: $8/month for standard def on one device, $10/month for high def on two devices, $12/month for 4K UHD on four devices.
    Best for: Pretty much everyone. Netflix streaming is the most popular provider, by far.
    NetFlix has a good sized library of past movies and TV shows including a lot of pretty good original content like House of Cards, Orange is the New Black, 3%, etc. Whatever else you subscribe to, you should also subscribe to Netflix streaming. The best option is the $10/month high def on two screens.

  • Showtime Streaming
    Costs: $11/month, $9/month when purchased through Amazon Prime or Hulu
    Best for: People who like Showtime shows
    Like HBO Now, this is Showtime but without a costly cable TV subscription. You can watch all Showtime movies, specials, documentaries, and original series.

  • Sling TV
    Costs: Starts at $20/month
    Best for: People who want some traditional popular cable channels.
    With Sling TV, you get about 20 basic channels similar to cable TV, but without a cable TV subscription. Channels include, in part, A&E, AMC, Cartoon Network, Disney Channel, Food Network, HGTV, and various ESPN channels. Does not include broadcast network TV. You need Hulu and/or CBS All Access for that.

  • Netflix (DVD-by-Mail)
    Costs: Starts at $8/month
    Best for: Movie buffs and folks who like older TV shows.
    This is the original Netflix (before streaming came along) and in some ways still the best. Although not a streaming service, Netflix's DVD-by-mail offers a larger selection of movies including some current movies and TV shows than does their streaming service*. Netflix has distribution centers all over the country so you'll likely wait only one day for your DVD. Keep it as long as you want as there are no late fees. When you send it back, you'll get the next one in your queue. Excellent for movie buffs and non-impulsive types that can plan ahead at least a day.

    * Why does Netflix DVD-by-mail service offer more or different options than their streaming service? It all has to do with licensing. Just because Netflix can send you a disk in the mail doesn't mean they're permitted to stream that very same movie or TV show. That's a separate license agreement that would undoubtedly cost them more money.


II. Pay-Per-View Services

There's also a number of pay-per-view services that require no monthly subscription. Maybe you want to watch a recent movie that's not yet available on your favorite subscription streaming service. The beauty of PPV providers is they cost nothing to have around. You only pay when you use it. e.g. to watch a recent movie.
 

  • Amazon Video: $3 to $7 for movie rentals, $2 or so for rental of TV episodes

  • Apple iTunes: $4 to $6 for movie rentals, $3 for purchase of TV episodes

  • Cinemanow: $4 to $8 for movie rentals, $3 and up for TV episode rentals

  • Fandangonow: $4 to $7 for movie rentals

  • Vudu: $4 to $6 for movie rentals

Movie rentals generally have a time window in which you must watch after you rent.

e.g. Here's how it works on Amazon Video: Amazon generally gives you 30 days to begin watching then 48 hours to finish watching (or watch again, if you want) after you first begin playing the movie.

Renting the HD version of a movie usually costs a buck or so more than the SD version. For watching newer movies on a fairly large flat screen (50 inch or larger), that makes sense. But for anything older than late 1990s or on a smaller TV, paying for the HD version gets you nothing more. Older movies, especially those on film, weren't shot in high def anyway so you're wasting money renting the HD version.

Your tastes may vary, but I generally don't rent individual TV episodes as that can get expensive. For a 26 week season at $2 a pop, that's $52 for a single season of most TV shows which is quite a lot of money. If you want to watch old TV shows and it's not available as a stream except on PPV, then I'd recommending buying the DVDs used from Amazon or eBay. They often cost less than half the rental price and then you'll actually own it and can watch any time. Or resell them and recoup most or all your money.

With movies, I may pay $3 to rent a movie on PPV, but at $15 or $20 I would never buy unlimited viewing. If I want to own a movie that I can watch any time, then I'll buy the actual DVD -- again, used from Amazon or eBay. Never new unless it's a special sale.

III. Over the Air

Rabbit ear antennas may be a thing of the past, but receiving OTA (Other The Air) TV is definitely not dead! You can watch local channels (network affiliates and the independents) by setting up a digital TV antenna. The antenna costs less than $50 and installation isn't difficult. No monthly fees! Just like the old days -- commercials and all.

Monthly Data Caps

On an internet connection, everything you do results in data being transferred -- mostly downloaded to you. Streaming a movie or TV show is no different - it's just another way that data is downloaded. It all counts against your monthly data caps (if you have caps). Very few customers actually hit those data caps, however. You'd had to be watching many hours of streaming TV per day. Comcast on June 1, 2016 increased the data cap to 1 TB which is pretty high, even for HD programming. Netflix estimates that SD (standard definition) programming consumes 0.7 GB per hour of viewing and HD consumes about 3.0 GB per hour. You could watch about 333 hours of HD streaming before you hit Comcast's 1 TB monthly data cap. That's about 11 hours per day of non-stop viewing on a single TV. Or about 5 1/2 hours per day non-stop on two TVs. Unless your family are all couch potatoes, you are unlikely to hit these caps.

Here Today and Gone Tomorrow

Streaming providers are constantly changing their offerings. e.g. If you find a good but older show on Netflix with many past seasons (lots of episodes) to watch, like How I Met Your Mother or Friends (both excellent shows with lots of episodes), you may find that Netflix drops the show before you've finished watching the entire series. Man, does that suck!

 

Why does that happen? Because Netflix and the various content producers sign a contract specifying, among other things, how long Netflix will carry a particular show. The show is dropped when the contract expires. Maybe it'll come back later, but most likely not.

What can you do? There are ways to permanently copy shows from Netflix, and other streaming providers, to your computer ahead of time so that even if they drop a show before you are finished watching all the episodes, you won't be left out in the cold wondering, say, if Rachel and Ross from Friends ever got back together.

There's software that enables you to record shows on your computer as they stream and to cast the shows to your TV set. Netflix and other providers don't approve of this of course but there's practically speaking little they can do about it. This requires some amount of technical savvy or knowing a computer geek that can do it for you.


Closing Commentary

It's true that cutting the cord does require some changes in how you enjoy TV, but the "old way" of watching cable TV is simply a learned habit and is no more the "right way" than a streaming-only option. You can unlearn the old way and enjoy the new way just fine.

Need more convincing? The $1,000+ a year savings mentioned at the top of this article is no tease. I've converted several clients away from their cable company's expensive triple-play package, reconfigured their various telecom services, and they all are saving at least a $1,000 a year and $1,500 isn't all that rare.

One of those clients is saving $1,800 a year! She was paying $240 a month for her triple-play with all the trimmings. After discussing her TV watching habits, I was able to eliminate her expensive triple-play and reconfigure her telecom (phone and internet). She now pays about $90 a month and is satisfied. Imagine what you could do with an extra $1,000+ a year by not giving it to the cable company bandits.

You just gotta unlearn the bad habits formed by years of watching expensive cable TV. Do that and you can save a ton of money and have cool new viewing options, to boot.