Though cable subscribers now have access to more channels than ever before, all of those viewing options come at a hefty price. Today, the average cable bill checks in at $99.10, representing a 39% increase from the average cable bill back in 2010.
Remember that old Onion headline,”Nation’s Cable Companies Announce They’re Just Going To Take $100 From Everyone”? Well, that’s the world we’re basically living in today.
Thankfully, though, we’re not as beholden to cable companies as we once were. These days, there are many different avenues for consumers to satiate their entertainment needs without having to break the bank in the process. Thanks to services like Netflix and Hulu, consumers are cutting the cord in increasing numbers, prompting some content owners to re-evaluate their business relationships with various streaming sites altogether.
Recently, Bloomberg took a look at the economics of cutting the cord and found that doing so may not actually save consumers all that much money. The methodology they used to reach that conclusion, however, was completely bizarre. Bloomberg took the point of view that consumers typically choose between having either cable TV or high-speed Internet access. As a result, Bloomberg compared the cost of streaming services to the cost of cable less the cost of Internet. This is more than a little bit misleading given that Internet access for most TV viewers is all but a given these days, regardless of whether or not they have cable. Without question, it’s far more instructive to compare the cost of streaming services to the actual cost of cable.
Another problem with Bloomberg’s approach is that they assume the average cord cutter is likely to sign up for every single streaming service available, including YouTube Red. Fact of the matter is, the impetus to cut the cord is to save money, not sign up for every overlapping service imaginable.
So to begin, let’s start by looking at how much each streaming service costs per month.
Netflix, $9.99– Movies, last season’s TV shows, 30-odd original shows (House of Cards, Narcos, Orange Is the New Black)
Hulu, $7.99 – Current-season TV shows, movies, a handful of original shows (The Mindy Project, Difficult People, Casual) You can add Showtime programming (Homeland, Masters of Sex, Ray Donovan) to Hulu for $8.99 per month.
Sling TV, $20 – The following channels, plus add-ons ranging from $5 to $15: ESPN, ESPN2, AMC, Food Network, A&E, History, TNT, El Rey, HGTV, IFC, Disney, Polaris, Maker, TBS, Travel Channel, Cartoon Network/Adult Swim, CNN, H2, ABC Family, Lifetime, Galavision, Bloomberg.
Amazon Prime, $8.25* – Movies, last season’s TV, and Amazon Prime original programming (Transparent, Catastrophe, Alpha House), in addition to free two-day shipping for Amazon purchases.
*$99 annual fee
YouTube Red, $9.99 – Free YouTube plus original programming in the works (Scare PewDiePie, Sing It!, Lazer Team)
HBO Now, $14.99
If you really want access to a large selection of movies, TV shows, and original content, one can easily make do with just a Netflix and Hulu subscription. This comes out to just $18/month. If you happen to be a sports fan and need ESPN, you can sign up for Sling TV for $20/month. If you’re intent on keeping up with HBO shows like Silicon Valley and Game of Thrones, an HBO Now subscription will set you back $15/month.
Practically speaking, if you want a premium cord-cutting experience, with sports and HBO at the ready, you’re looking at $53/month. If you’re looking at a basic cord-cutting setup, you can skate by with a Netflix/Hulu combo for $18.
So how does this pricing compare to cable TV?
Well to get our comparison ready, let’s look at the two of the top cable providers in the country, XFINITY from Comcast and Time Warner Cable.
Comcast’s cheapest plan is their Limited Basic option which costs $29.99 month. While certainly affordable, the list of channels it supports is embarrassingly sparse. Depending on your location, you might get ESPN, Univision, truTV, Fox News, The Weather Channel, HSN, C-SPAN and a selection of ridiculously boring sounding local channels. Suffice it to say, Comcast’s Limited Basic plan at $29.99 is a joke. Without question, one is far better off opting for a SlingTV and Netflix combo instead.
If you really want your cable subscription to more closely match the entertainment options provided by streaming services, you’ll definitely want Comcast’s Digital Economy package. It costs $39.95 a month and includes a wider selection of channels (Disney, E!, A&E, Discovery, CNN, AMC, TV Land, History Channel etc.). Still, you end up missing out on FX, TNT, Bravo, Nickelodeon, CNBC, MSNBC, TLC, VH1, and MTV.
It’s a solid lineup, but it’s arguably not a true cable experience. For that, you really need Comcast’s Digital Starter package which, depending on your location, will run anywhere from $43.45/mo. to $68.95/mo.
On top of that, if you want HBO, that’ll cost you an extra $10 month. Want DVR? That’s at least another $10 more a month.
If we do the math, cutting the cord is much more affordable than any comparable service Comcast has to offer. In some areas, a Netflix/HBO/Hulu/Sling combo will be $25 cheaper than choosing Comcast’s Digital Starter package. And if you’re not ready to spring for HBO and don’t care about sports, the savings are even bigger.
A Netflix and Hulu combo ($18) is not only more affordable than anything Comcast has to offer, it also provides users which a much greater selection of interesting content.
Turning our attention to Time Warner, the situation isn’t all that different. The cheapest Time Warner plan costs $19.99 for 12 months, after which the price shoots up. But more than that, the cable channels you get with Time Warner’s basic cable package are laughable: all of the C-SPAN channels, TBS, Univision, QVC, and that’s about it. Much like Comcast’s base level plan, Time Warner’s cheapest cable plan is a joke and an absolute waste of money for $20.
Time Warner’s standard cable package has 70+ channels and includes all of the big-time channels you can think of. Price wise, it’s $39/month for 12 months, a figure which jumps up to $65-$70/month after 24 months. And to top it all off, that doesn’t even include having to lease a set top box. And if you want an HD box, you’re looking at an extra $10-$15 every month. So you’re basically looking at anywhere from $80-$85 a month for a respectable Time Warner cable package.
And that’s not even factoring in HBO.
So is cord cutting saving consumers a lot of money? Yes. A lot of it.
Cable companies like to lure you in with attractive monthly pricing, but remember that your monthly bill will skyrocket once your promotional period expires.
Another benefit to cutting the cord is that you can sign up for streaming services on a month to month basis. Good luck trying to do that with cable where you have to deal with nonsense like installation fees and a whole host of other hidden costs.
By and large, consumers aren’t idiots. They know a good value when they see one and they’re collectively saving boatloads of cash by cutting the cord and opting for more user-friendly streaming services from the likes of Netflix, Hulu, HBO, and Amazon.
At the end of the day, signing up for most any streaming service seemingly provides more bang for the buck than any starter cable package you’re likely to find out on the open market.