Should you cut the cable cord?
More people are severing their relationship with cable and satellite TV. If you're thinking of cutting the cord, consider these questions first.
This post comes from Kelli B. Grant at partner site SmartMoney.
Cable, satellite and telecom TV service operators lost an estimated 400,000 customers during the second quarter, according to a report in The Wall Street Journal. Some analysts told the paper that although the second quarter is typically weak, since college students temporarily disconnect dorm service at the end of the school year, the overall decline points to more consumers moving away from paid TV services, a practice known as "cutting the cord."
Some doubt the trend will really catch on, pointing out that cord-cutting isn't all that appealing for most TV junkies. "The average consumer, it's not easy, affordable or reasonable to think that they can cut their cable," says Dan Rayburn, an industry analyst with Frost & Sullivan.
On top of that, some analysts question how much cord cutters really save. After all, service providers often charge higher rates for Internet service when cable isn't part of the package. And securing alternatives like over-the-air antennas and video-on-demand subscriptions adds to the cost. (Post continues below video.)
Deciding whether it makes sense to cut the cord depends a lot on where you live, the shows you watch and other viewing habits. This reporter, who lives in an area where there's a single cable provider, saved $60 a month by eliminating a cable-phone-Internet package in favor of a phone-Internet bundle with another provider. Free broadcast channels supply my news fix, and a monthly Hulu subscription covers most of the others shows I watch.
Here are some things to consider before making the switch.
Cutting the cord may work if you:
- Don't mind spoilers. Cord cutters tend to be those who don't feel they must be in front of the set on Sundays at 10 p.m. sharp for the latest episode of "Breaking Bad," Rayburn says. Often, new episodes aren't available to buy, rent or stream until the day after they're broadcast.
- Can handle a piecemeal solution. Replacing paid TV "requires a number of additional steps and efforts," says technology consultant Alex Goldfayn. That includes a willingness to watch on a laptop computer instead of a TV screen, and the ability to juggle different services and devices depending on the content you want to watch. "It's not as simple as picking up the remote," he says. But it can still be simple: Devices like the $50-and-up Roku connect to your TV set and offer access to Hulu, Netflix, MLB.TV, Amazon on Demand and other services. (Most require separate, paid subscriptions.)
- Live in New York City. Startup Aereo offers residents an hour of free live TV each day and bigger packages for as little as $8 per month. Users who subscribe can also record shows to watch later. The service currently works only on Apple devices.
Sticking with cable is preferable if you:
- Are a serious sports fan. Live sports games are the one thing holding many viewers from cutting the cord. Some leagues offer streaming, others don't or for a limited number of games only. The NBA, for example, offers league pass subscriptions for up to 40 live games, but only those that are out of the subscriber's local market.
- Love your premium channels. HBO offers a free streaming service, but it's limited to people who are already paying for TV access on certain providers, Goldfayn says. Amazon and iTunes have some premium channel shows' seasons and episodes for purchase, but others, like HBO's "Game of Thrones," aren't available (legally, anyway).
It'll be a tough call if you:
- Watch a wide variety of TV. Cutting TV out of your phone-Internet-TV bundle often means paying a slightly higher rate for Internet, narrowing the savings in some cases to as little as $30 per month, Rayburn says. Consumers who need a number of new subscriptions to replace their must-see content may find the savings are negligible. Crunch the numbers before making the switch. Netflix streaming and Hulu Plus each costs $8 a month, for example, and new TV show episodes can cost as much as $3 apiece ($50 per season) on iTunes. Sports subscriptions like MLB.TV can add $20 a month, or $40 for an annual package.
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