If you have just finished writing your monthly involuntary “tithe” to your Cable TV company, don’t feel that you are alone in your frustration. The FCC recently acknowledged that cable service costs are continuing to rise — basic cable went up 6.5% in 2012 alone. The average household is paying nearly three times what it paid for cable service in 1995. The International Business Times calculated that the cost of cable has outpaced the inflation rate by 47%. Business Week estimates that the average monthly cable bill is about $80 per month, although other estimates bring the cost closer to $100 monthly. Are consumers really getting what they are paying for? The short answer: Hell no. But there are a number of options to the cable companies that only now are emerging, thanks to new streaming technologies.
The cable TV industry has used its near-monopoly market power to get exclusive access to some content that is not made available to online competitors. Their control over broadband pipes allows them to all-but-control online video. While they face some competition (from satellite, and to a lesser extent from online video and over-the-air broadcast), neither have yet to make a dent in their power (or profits). But the key to cable’s dominance is probably sports. If you follow the money, you’ll find that baseball, football and basketball are extracting hugely profitable contracts from the cable companies because that’s a large part of where cable companies control consumer choice. America’s addiction to televised sports programming drives its consumers to pay the ridiculously increasing monthly cable bills. There are very few viable ways to watch sports without paying the cable monoliths, although new options are beginning to emerge.
Previously, the only meaningful option for consumers who wanted access to news and sport was free over-the-air TV broadcasters (NBC, Fox, CBS). However, the dirty little secret that the cable companies sought to keep under wraps is coming out: there are a number of ways to watch sports without cable. Consumers are beginning to get savvy about these alternatives. Once you take that plunge, then you can reduce your monthly TV costs to closer to $10 per month. How? Try this recipe: Netflix streaming ($8 per month), Amazon Prime (free with a Prime membership), an occasional RedBox rental ($1.20 per movie), YouTube (lots of great TED and music videos) and free over-the-air television. Total cost per month: approximately $10.
If you are looking to find a more cost-effective alternative to Cable TV, check out Slate’s Cable Calculator. Their innovative app app shows the total annual costs of wired and streaming options, and the annual difference between them. It is a very useful tool. And it drives home the point that you can save $500 or more each year by choosing alternatives to Cable TV programming.
More and more consumers are jumping onto the cable-free option. The Associated Press reports that lately, an increasing number of shoppers have been choosing Internet streaming of TV shows and movies, either on their computers or through mobile devices such as cell phones or tablets. Subscriptions to online sites like Hulu, Netflix and Amazon are climbing, eliminating the need for traditional viewing habits that require the viewer to follow network schedules and sit through commercials. Last month, the Nielsen Co. started labeling people in this group “Zero TV” households, because they fall outside the traditional definition of a TV home. There are 5 million of these residences in the U.S., up from 2 million in 2007. Nielsen’s study suggests that members of this new movement may have left traditional TV for good. While three-quarters actually have a physical TV set, only 18 percent are interested in hooking it up through a traditional pay TV subscription.
Perhaps the shining light in TV alternatives is Chromecast. At $35, it is a very alluring proposition although currently the programming options are limited. Another intriguing option that warrants your attention is Roku. The Roku box doesn’t require any monthly fees, but some channels do require a subscription. It offers free movies and TV from Crackle, CNBC, CNET video, Disney, Fox News, Pandora and a few dozen other niche channels. Add Netflix and/or Hulu Plus and sweeten it with an occasional movie from Amazon Instant Video and you’ve got a very nice alternative to cable for far less money. The only gap in your entertainment options will be sports programming. Amazon has come out with its Fire TV which is priced in the same range as the Apple TV but offers a much faster processor (Quad-core), gaming capabilities and four times more memory. Fire TV also offers voice search and Dolby surround sound. A good comparison of the four major streaming boxes can be found here.
But there are even more options. Sling TV has just been announced. For $20 per month, you can buy the basic Sling TV package which has 12 channels, including Cartoon Network, CNN, Disney Channel, ESPN and ESPN2, Food Network, TBS, and TNT—a cleverly designed list of some of the most popular basic-cable channels. If you own a streaming device, such as Roku, Fire TV, Apple TV or Chromecast, you can also get access to a large number of low-cost or free streaming channels. For example, America Online now offers about 20 free movies from Miramax at any given time. Web based channels such as Crackle, ESPN3, Popcorn Flix and YouTube Public Domain Movies offer fairly high quality content, including sports, films and documentaries. Snag Films streams some excellent art-house films and documentaries, all for free.
Another option available is “Free to air” (FTA) satellite TV which are unencrypted TV signals sent by hundreds of different stations around the world. You won’t get the subscription based sports, music or movie channels because they are encrypted. But you’ll find no shortage of programming — especially from other countries. The cost is in buying the equipment: a satellite dish, an FTA receiver box, and some coaxial cable running between dish, box, and your TV set. The dish needs to be compatible with the satellite at which you’re going to point it; however, most satellites transmitting FTA signals are compatible with the basic DTV dish available online, or at many electronics stores. Check out FTA satellite TV gear sellers like Pansat, Coolsat, and Conaxsat. The receiver box will cost a couple of hundred dollars and up. Prices vary depending on the signal formats supported and various bells and whistles (Ethernet jack, wireless in-home signal transmission, etc.) You can also buy FTA satellite TV kits which include dish, mounting hardware, coaxial cable or wireless transceivers – everything you need to get hooked up. For more helpful information, check out the FTA links and forums at the Satellite Guys website as well as the information at MyFreeFTA. The general estimate for cost of deploying a satellite system is about $200-300, (Amazon sells a system for about $250) but this upfront cost will pay for itself in less than a year compared to the monthly fee you’d pay to Dish or Direct TV.
Inventory. Make a list of the shows that you watch regularly. Do this for each family member, so that you can predict what you will put on T.V. They recommend you use findinternettv.com or gowatchit.com to find what shows are streamed online. At the same time, buy an antenna and see how well you can access free over-the-air broadcast TV. (Good antennae are available for $50 or thereabouts — see discussion above)
Downsize. Investigate some of the lower-end cable service selections that offer about 20 channels — they generally cost about $30 per month. Evaluate how many channels you actually watch because you may find that a lower, cheaper tier of service would satisfy you.
Negotiate. Call your cable provider and ask for the disconnect or cancellation department. Tell them that you are considering cancelling and inquire as to whether a promotion will save you money. They’ll give you a customer-retention specialist whose job is to keep you as a subscriber. If you go this route, you may want to explore deals from other providers, as it will help you negotiate.
Switch. There isn’t much cable competition, however, satellite TV an option to explore if you like a large selection of channels. Also, check to see if Verizon FiOS and AT&T U-verse are serving your locale. Explore Internet TV, also known as “streaming media”. Chromecast, Roku and Apple TV are among just a few of the numerous streaming devices available on the market for as low as $30. Amazon recently entered this market with the Fire TV Stick, rumored to sell for $39. However, Amazon’s early pre-sale price of $19 suggests that the company will be heavily discounting this steaming dongle. Its Broadcom Capri 28155 dual-core processor, significant storage space, physical remote and voice search capability adds up to a very strong value proposition. Reportedly, Amazon’s Fire TV remote app also will allow users to perform a voice search using an Android handset. It’s a good bet that Roku and Google will be reducing their prices and beefing up their streaming stick capabilities.
Streamline Hardware. Think about cutting equipment. For example, you can save $6 to $10 per month on box rental. And you may only want a set-top box on one of your TVs rather than all of them.
Ultimately, you do have a choice. If you can control your insatiable urge to have unlimited, unending sports programming, you can save yourself $70-90 per month (that’s close to $1000 per year). That leaves a fair amount of disposal income to buy some tickets to local live sports events with a lot left over to use on yourself and your loved ones.