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Should you switch to satellite TV?

Dish Network, DirecTV drop prices. What to consider before quitting cable.

By Karen Datko Jun 24, 2010 11:51AM

This Deal of the Day comes from Kelli B. Grant at partner site SmartMoney.

 

Consumers looking to cut cable bills have an added incentive to cut the cable altogether.

 

Earlier this month, satellite providers Dish Network and DirecTV eliminated their fees for HD service, lowering prices by roughly $10. New Dish subscribers, for example, can get service for as little as $25 per month for the first year -- rising to about $40 a month for the second year -- including access to the company's more than 200 HD channels. (To get the deal, they must also agree to automatic bill pay and e-mailed statements.)

 

The aim behind the new promotions is simple: entice more customers away from cable competitors. "Satellite has always had a relatively good price point," says Schwark Satyavolu, co-founder and chief executive of comparison site BillShrink.com. The new price points sweeten the deal for consumers looking for HD content to watch on their screens.

 

While the price change may be enough to lure new subscribers, those debating cable versus satellite should consider five things before making the switch:

 

Channel lineup. Available channels vary among individual cable and satellite providers. Review the full lineup on a provider's site before signing up. Many local stations are cable-owned, which means satellite subscribers may have limited or no access to local news and sports, says Chip Smith, chief marketing officer for WhiteFence.com, an online marketplace that helps consumers comparison-shop providers. International channel access varies, too.

 

Price competition. Consumers considering a provider switch solely to cut their bill might consider other strategies. Bundling TV service with Internet and phone on one provider is often cheaper than paying for services individually or through multiple providers, says John Falcone, a senior editor for electronics site CNET.com. Many providers will also meet or beat a competitor's offer if you simply ask for a better rate.

 

For TV watchers intent on switching, price-compare the offers providers extend to new customers. "Make sure you get in on one of those deals," Smith says.

On-demand options. Every provider offers some form of digital video recorder (DVR) or video-on-demand services. (The former is a subscription service that lets you pick programming to record and watch later; the latter includes a selection of free and pay-per-view programming to watch at your convenience.) Consumers who want that ability need to compare options, Satyavolu says. For example, Dish offers remote access to watch on your iPhone, while Time Warner Cable has 3D on-demand programming. Free on-demand for television shows is primarily a cable offering, too, he says.

Contract terms. Ditching a cable or satellite provider could cost you. Both reserve their best rates for people willing to sign multiyear contracts. "If you bolt early, you have to pay an [early termination fee] -- and it's often significant," Falcone says. Verizon, for example, charges up to $165 if you cancel its $85 bundle of DirecTV, high-speed Internet and home phone service before the one-year contract is up. Ask if there's a cancellation fee before deciding to make a move.

 

Reception. Satellite service still requires good southern exposure to pick up the signal. Without that, it's tough to get good service, Satyavolu says. Weather interference is relatively rare, with service cutting out at the point you'd lose power anyway, he says. Ask for a consultation to check reception before committing to a contract.

 

More from SmartMoney and MSN Money:

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