Editor's Note: This classic Video Insider originally ran on March 5, 2014.
Today I am channeling my “inner Milennial” by doing an exercise to determine what would be a more financially responsible choice for my personal T/V viewing:
Step 1: Acknowledge the fixed cost that will remain whether I choose OTT or cable:
Step 2: Identify programming elements I most want:
Step 3: Identify programming elements I don’t need through my television:
Step 4:Understand the cost of buying 350 channels, some of the 4,000 on-demand shows and TV Everywhere from my current cable provider: $146.28 per month.-- DVR Service: $12.95
TOTAL MONTHLY CABLE SUBSCRIPTON FEES & TAXES: $146.28
Step 5:Identify OTT substitute cost of only programming I most want. Total monthly average: $111.78.-- Google Chromecast incl. tax (to link programming from my laptop and smartphone to my Smart TV): $35
Annual fees pro-rated per month: $79.76
Monthly fees: $22.99
Monthly estimated sales tax: $9.03
TOTAL MONTHLY A LA CARTE FEES & TAXES: $111.78
Conclusion: I could save at least 23.6% of the cost of my cable bill without losing much in terms of the programming I enjoy -- or $34.50 a month, for a total of $414 a year.
To be honest, I thought the savings would be much greater.
Now would be the time to pile on arguments for going one way or the other, depending on your gut feeling about the value of the bundled approach vs. the unbundled OTT approach. I’ll list a few of the more subjective pros and cons as thoughtstarters:
Pro-Cable (bundled): more predictable pricing; much more choice; less work hunting down programs from various sources; more unified delivery and servicing; TV Everywhere solves multiplatform challenges.
Pro-OTT (unbundled, a la carte): I pay only for what I watch, not for what I don’t watch; the oligopolies of cable and satellite keep pricing unnecessarily high; single companies can no longer dominate T/V production and distribution, and competition among companies is good for consumers; I am helping smaller businesses and technological innovation grow.
In the end, though, the difference is not as large as I had thought before this exercise. So where we will best get our T/V programming needs met is a very personal decision for each of us. I’d love to hear your thoughts in the comments section.