Cord-cutting :(verb) The process of cutting cable connections in exchange for low-cost TV channel subscription(s) through over-the-air (OT) free broadcast through an antenna, or an over-the-top (OTT) broadcast over the Internet. Cord-cutting is a growing trend that is adversely affecting the cable industry.
Millions of Americans are skipping cable for streaming services every year. These platforms include Disney Plus, Hulu, Starz, NFL Network, Showtime, HBO, Apple TV, Netflix, Prime Video, YouTube and PlayStation Vue. There are more than 200 streaming services and growing!
Netflix pricing power
I found a great article on The Streamable that compares different cord-cutting options for 2020. It will be interesting to see how this list evolves as prices and choices will inevitably continue to increase in the future. In 2013, a premium Netflix subscription was $7.99, last month I gave Netflix $15.99! This increase is 4x the national historical inflation rate
Hopefully with juggernauts (noun: a huge, powerful, and overwhelming force or institution) like Disney Plus entering the streaming wars at a paltry $6.99 or Apple’s attempt to woo its customers with AppleTV+ for free and $5 per month thereafter will slow Netflix’ pricing control. I think it is more likely for Apple & Disney to raise prices before Netflix is forced to surrender its pricing power.
Cutting my cord
We decided to sever ties with DirectTV nearly seven years ago. I admit it did not last long. Less than two years later, I (yes, it was me) was sucked into a “package deal” that included cable from Frontier FIOS. Unfortunately, the internet service in my neighborhood was horrible and I was able to weasel out of the contract. Since the second disconnection in 2016, our family has survived solely on streaming services.
When we had DirectTV, we paid $250 per month. This included the occasional Pay-Per-View and NFL/NCAA viewing packages. We also paid for a Netflix subscription and high-speed internet. In total, we spent approximately $340 per month. This didn’t include the occasional Red-Box or PayPerView. When we switched to Frontier the total cost for services including the internet was reduced to $200 per month. However, our amount of RedBox and Apple movie purchases did increase.
First, we had to recognize we had a problem. Think about it: if we were spending on average $250/month, that is $30,000 we have spent over the last decade! By the way, our son’s first year of college tuition was $34,000.
Something had to change.
Access to local stations
One of the immediate “pains” of cord-cutting is the lack of access to local stations. Maybe you are not an avid NFL fan, and you are contempt with catching your home team on the local access channel each week. Good luck without cable or a decent antenna. Depending on where your team is playing, the game may be broadcast on Fox or CBS. If your team plays on Monday night you will need access to ESPN, however Twitter and Prime Video were nice enough to offer Thursday’s games free of charge.
There are a few services that offer access to live television. You may have heard of Sling TV, Hulu + Live TV, SpectrumTV or YouTubeTV. For regional sports, there’s the up-and-coming fuboTV.
Our 2020 entertainment budget
Netflix - $15.99/month Hulu - $0.00/month Spectrum TV - $21.99/month Disney Plus - $6.99/month Apple TV + - $0.00/month CBS Live - $5.99/month Starz - $0.00/month HBO - $0.00/month Amazon Prime - $119/year Spectrum Internet - $109/month
Fortunately, we are paying less monthly ($170) including our internet costs than when we had for cable services. I’ll be cutting CBS after the Super Bowl and potentially let SpectrumTV go too (if my wife Alicia is willing, she is more attached to this service than me).
You may wonder, how are we getting Hulu for free? Our savings have a lot to do with my sister graciously logging into Hulu, HBO and Starz when she visited last summer. Of course, I conveniently did the same for her with Netflix, Disney, and Amazon. Until providers crack down on sharing, we will share as much as we can!
How to cut your cord
According to some studies, the average American watches about 4.5 hours of TV a day. A simple way to reduce your viewing cost is to stop watching so much TV! Maybe this will help you to prioritize your TV time. I’ve “invested” more than $30,000 in the last decade in sitting in front of a TV. If I had cut the cord earlier maybe we could have invested more money into our son’s college fund? As I mentioned earlier, until the providers’ crackdown on sharing logins, invite your sibling or friend over and ask them to log-in. Maybe you can reciprocate with a service you have that they do not!
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