CORD CUTTING - Not A Big Savings

Value in the Bundle 

You hear a lot about people 'cutting-the-cord' or getting off of cable TV and going with internet or 'over-the-top' (OTT) content viewing. The biggest reason for 'cord-cutting' is cost. Many people believe that cable has gotten too expensive and many of the channels they are paying for they never watch.  But is this true?  If you look at the numbers you get a different picture.

what is referred to as

Despite the hype, OTT packages offer a very limited number of channels, and most don't have all of the sports - that many people young and old crave.  Even non-sports fans get short-changed as they have to subscribe to several OTT packages or services to satisfy their entertainment needs. Factor in the cost of basic broadband and the total cost of OTT  approaches a 'double' or 'triple' play from a cable provider. 'Double' play means having cable TV and internet connection. 'Triple' play means having cable TV, internet connection, and phone connection.

To me 'cord-cutting' sounds great in conversation but crumbles when faced with reality.  When taken individually, none of the OTT offerings provide everything viewers want, and cable providers will move toward a menu driven programming whereby subscribers can pick-and-choose the channels they want to see and only be charged for these.

What Are The Costs

A cable TV provider 'bundle' (TV, internet (broadband) service, and phone service) runs about $100 per month - give or take.  The cost of  OTT services varies greatly, but here is a current rundown:

- Amazon Prime - $99/year and free Amazon shipping. Offer some original series and library of old movies, music, etc.
- Apple TV- $30-40/month.  25 live channels including ABC, CBS, and Fox.
- Sling - $20/month. Live streaming channels, including ESPN, TNT, TBS. Other content and extra $5/month.
- HBO Now - $14.99/month. Movies and original series
- Hulu Plus- $7.99/month. Current and past TV shows from major broadcasters and cable networks.
- CBS All Access - $5.99/month. Live and on-demand programming from CBS network.
- Noggin- $5.99/month. Ad-free programming for kids.
- PlayStation Vue - $49.99/month. 50 networks including CBS, NBC, Fox, TNT, TBS, etc.
- Netflix - $7.99/month. Original programming plus library of movies, TV shows, etc.
- Xfinity - $49.99/month. Offers 140 channels including major networks, plus ESPN and others.

So, you still need an internet (broadband) connection to access any of the above. Average cost of broadband $50-60 per month. On all of the above a lot of the newer content, especially movies, are on a pay-per-view basis and most don't offer 'everything' that you want. The result is that most 'cord-cutters' wind-up subscribing to two OTT services and sometimes more!  So the 'bundle' being offered by the cable TV provider gets to look better and better in terms of value, accessibility, and content variety.

What is happening is that the folks are, by-and-large, sticking with their cable provider (which also provides broadband service) and subscribing to one or two of the OTT services - like Amazon or Netflix.

Best
Jim