Commentary

The Path To Cutting The Cord

What’s the right way to cut the cord?

The issue is not whether you can easily cut the cord or not.  The challenge lies in what you’re replacing your cords with.

According to Nielsen, there are 16 million+ homes that have already cut the cord.  That’s an increase of 48% over the last eight years.  

The average cost of cable TV is over $100 per month — so cutting it seems on the surface like an immediate savings, but you then have to look at replacement value.  

In sports like baseball, they look at WAR, or “wins above replacement,” which defines the value of a specific player over his replacement in the lineup.  

In cord-cutting, think through the cost and time allocation required for managing the replacement services you put in place to watch TV.  A good sampling would revolve around either YouTube TV or Hulu Plus, with additional services like HBO, Netflix, Amazon Prime, DC Universe (for the nerds) and the impending Disney subscription service.  To access all of these, you also need to buy a device like Apple TV.  Amortized monthly for the device, plus the monthly charges for these premium services, your monthly total would be about $128 per month.  

advertisement

advertisement

Cutting the cord is a great idea, but it doesn’t necessarily total a cost savings.  It’s a lifestyle decision.  Rather than paying a single company for access to these services, you are willing to take on the burden of managing all of these subscriptions on your own.  

You may save money if you are flighting these services only to when you want to watch them.  You certainly don’t need them all each month, but most consumers will agree that once they sign up for a subscription, they rarely cancel for lack of use.  Subscription companies count on this.  

I am not trying to convince you to pay for cable TV.  I myself am considering cutting the cord, especially since I rarely get the chance to sit down and watch much TV.  I just think it’s good to go into these things with an open mind.  

If you only want one or two of these services, the decision makes financial sense.  I can see having Hulu Plus (for live sports) plus Amazon Prime and Netflix as the core of my entertainment experience.  I can see layering on HBO from time to time.  The impending Disney subscription service is likely a must since they have all the franchises I like the most and all of these are likely to disappear from the other services when they go live. With this package, my monthly cost could total closer to $85-90.  

I think the final decision comes down to looking at what you pay for when you pay for cable TV.   

I did a little channel surfing over the weekend and realized that cable TV is filled with junk.  At any given time, you can find only 10-12 stations of content worth watching, and each of these stations are filled with commercials that constantly interrupt the experience.  So is the convenience really worth it?

The on-demand nature of streaming is probably what puts it over the edge.  Cable has these options as well, but far too much of its on-demand content requires additional fees, where you have to pay extra for some episodes of shows you can already access on a different platform.  Even the TV manufacturers know this is an issue because they are now baking the apps for these streaming services directly into the TV.  If ever there was a sign of the end, this would be it.

I can pretty much guarantee we will be cutting the cord after this exercise.  It simply doesn’t feel necessary anymore.  What about you?

3 comments about "The Path To Cutting The Cord".
Check to receive email when comments are posted.
  1. Eric Fischer from HJA Strategic Consulting, July 10, 2019 at 1:10 p.m.

    You're forgetting that when you cancel your cable, most people also receive their internet through that same service, and will have to pay more for that without the bundling of the cable service, so add another $20-$30 per month.

  2. Maarten Albarda from Flock Associates (USA), July 13, 2019 at 1:11 p.m.

    Precisely because the "Bundle" offered attractive extra's like free calls to Europe and super-fast internet, we did not go cordless but went "skinny cord". On the cord we only buy the basic channel package, coupled with one DVR, and Spectrum offered an option whereby you can add 10 premium channels of choice included in the skinny bundle. My wife and I each selected 5 to avoid a divorce.

    On top of that we have Chromecast, Fire TV and Roku, who all offer a lot of free stuff. And our Prime membership offers... well, prime. I feel we have more TV today than we had before, and across all the recording devices we have a whole bunch of unwatched viewing set to go. It feels a bit like my bedside table... there sit all the books I am going to read, but haven't yet. One day!

  3. Robert Minton from Disturbance Marketing Inc., July 16, 2019 at 1:53 p.m.

    Thanks for the article. 
     
    One flaw with your analysis is that you did not account for total cost of service.  For instance, for use of DVR and a cable box (DVR is included in some streaming services, and my DVR is limited) I pay $23.99 a month. Then $4.68 video franchise fee, $3.49 TV rebroadcast fee, regional sports network fee of $6.39 a month, etc.  Even know my bundle cost is $104.99 a month, after all taxes and fees it ends up being $155.62.
     
    $24 a month for a DVR and box I have to have to watch cable?  I save $288 a year by cutting the cord and using my TV apps and the apps DVR offering, part of the flat fee for their service. 
     
    There is a total of $50.63 of fees a month beyond the bundle price ($607.56 a year).  Cutting the cord is 100% the money saving option!  Streaming services, for now, are cheaper when total cost is factored in! 

Next story loading loading..