Why pay for a bunch of cable channels that you don’t want or need? That – and the high prices of cable television packages – are the key motivating factor behind the rise in “cutting the cord.” That is, an increasing number of consumers are kicking cable to the curb, substituting traditional cables packages with the likes of Netflix, Hulu, Amazon Video and other app-based streaming services (Playstation Vue, YouTube TV, Hulu with Live TV, etc.) for their entertainment.
Depending on their wants and needs, consumers are able to save significantly by keeping internet and subscribing to one or more of the aforementioned services. But is cutting the cable cord really worth it? It depends. Let’s examine:
Do You Have the Hardware?
Unless you’re content on not watching any television at all, there are certain upfront expenses that you’re going to need to make when you cut the cable cord.
For instance, if you want to watch your local channels, you’ll need an antenna. On the low end, these cost about $30. Then, if you plan to stream content to your television, you’ll either need a smart TV or a streaming device. If you don’t already have a smart TV, some of the popular standalone streaming devices include the Amazon Firestick, Roku, Apple TV or the Google Chromecast. Depending on the type of device you select, these streaming products can range anywhere from $40 to about $100.
Finally, your streaming is only going to be as good as your internet service, which is why you may have to consider upgrading your subscription after you cut the cord. You may even have to invest in a Wi-Fi mesh system if the aforementioned streaming devices are struggling to hold a consistent signal at various places in your home. When you add up all of these other expenses, it could wind up being months – or even a year – before you’re actually recouping your investment.
Streaming Services are Getting More Expensive
Ask anyone the main reason for why they cut the cable cord, and the likely answer is “cost.” That’s right, cable packages aren’t cheap – even when they’re bundled with internet. But here’s the thing: streaming services aren’t cheap either, and the prices keep on going up.
Netflix has recently raised its pricing on its plans, and other streaming TV services like PlayStation Vue, DirecTV Now and YouTube TV have all increased their prices by $5 a month as of this year. Now, the streaming services permit consumers the luxury of being able to cancel anytime they choose and not get locked into a multi-year agreement like the cable companies, yet the price hikes across the board are all a bit alarming for cord cutters.
What’s more is that you can expect to pay more from the cable company you get your internet from if you’re just receiving internet service than you would if you were getting a bundled package.
Convenience
Finally, there’s one big intangible that many people don’t consider when it comes to cutting the cord – convenience.
Cable TV’s On Demand programming allows consumers to easily find any program they’re looking for. When you cut the cord, you’re forced to juggle between various apps to find the programming you want to view, which can become cumbersome. Additionally, if your Internet is out or your Wi-Fi network doesn’t extend adequately throughout your entire home, then dropped signals and buffering can also amount to frustration. For many, it’s easier to just have a cable package that’s easy to maneuver than to have to worry about flipping between different video inputs, apps and streaming services to get content.
We’re not saying that cord cutting doesn’t have its benefits – it’s just that the savings margins are seemingly shrinking as streaming services become more costly. When you factor in these shrinking savings with the upfront costs of acquiring antennas, streaming devices and better, more reliable internet, you may not be saving all that much in the long run.
Cord cutting can be a great thing for the right consumer, but it behooves you to consider everything when you’re weighing the choice of whether or not to cut cable completely.
Regards,
Ethan Warrick
Editor
Wealth Authority
