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If you ordered a meal in a restaurant and the waiter said, “I’m sorry but you have to order three salads with your meal so we can afford to pay our produce provider”, you’d probably walk out and go somewhere else. If you still subscribe to cable TV, that’s exactly how you’re being charged. Most people watch less than 10% of the content that they pay for.
That works great for the cable company to spread their costs across their entire customer base, but why should you pay for over 100 channels that you never watch? For a long time, there weren’t any alternatives. But now there are.
If you’re paying over $1000 or even $2000 per year for cable TV and internet, there’s a way to drastically reduce that cost. In this post, I’ll show how to eliminate cable TV, save thousands of dollars and still have plenty of content to watch.
Why Is Cable So Expensive?
Have you ever gone to the mall looking for a shirt or a dress for a certain occasion, looking to spend as little as possible? And the minute you walk in, sales people approach you offering their 2 shirts for $99 deal or their 2 dresses for $125?
But you only needed one. And you didn’t want to spend an arm and a leg.
Or that car you’re shopping for has a certain type of wheels you like. But they’re only available as part of the “sports package ” for an extra $2200.
Bundling Services Costs You
The reason you’re over-paying is because of “bundling services”. This makes sense for the cable company because they can package some of the less profitable channels with other more popular items.
So if I wanted just the Soccer Channel, for instance, I may be forced to by the “Sports Package” for a higher cost.
As a cable subscriber, you probably watch about 10% of the channels available to you. But you pay for all of them. And it’s impossible to see exactly how much you’re paying for each channel.
You can call the cable company and diplomatically ask for a price reduction. If you’ve been a subscriber for several years and hint that you’re considering other options you might just receive a reduction.
The problem is that they’ll reduce it just enough to retain you, and next year you’ll be back up to the same amount. And they count on the fact that you won’t get around to calling again.
That business model doesn’t make a lot of sense for us consumers.
What Else Drives Up the Cost?
Cable companies also count on a steady revenue from hardware rental fees. Everything from cable modems to DVR receivers represents a never-ending income stream for them. And those charges will increase each year. Where does it all end?
Well if you live in a town like me, where FIOS has never been installed, the price increases for cable never will end. I had a Comcast rep tell me once that I live in a “non-competitive area”.
So in other words, I can expect their prices to rise every year. According to NPD, a firm that provides business analytics, the prices for pay TV are expected to rise by 6% every year. Don’t you wish your salary rose by 6% each year?
For example, Comcast used to require a cable box on only the TV where you wanted to receive premium channels. Any other TV’s in your home could receive a signal for basic channels by installing a splitter on your cable wire. So in addition to your monthly cable charge, you might spend a total of around $9.99 per month to rent that one cable box.
Several years ago, they started issuing small boxes for every TV in your home – and began charging you to rent them. Around $1.25 didn’t seem bad at first. Fast forward about 3 years, and now they’re $5.99 per month – each!
An average family may have about four TV’s in the house. Our house happens to have five TV’s. So let’s add that up.
Main cable box with DVR capability……………………………………… $19.99 (surprise, it’s gone up).
Four additional boxes @ $5.99 each for non-premium TV’s………….. $23.96
$43.95 just to rent their equipment every month. And that’s before we even buy any cable TV!
To see if you’d benefit by cutting out cable, think about what you actually watch. Chances are, it’s only a handful of channels. In my case, I watch a few of the cable news channels, sports on the local affiliates and an occasional movie.
But I pay for Telemundo, BET, TBS, QVC, The Cooking Channel, and about 2000 “free on-demand movies”. And none of these movies seems to have been made after 1983.
If the thought of ditching cable – and the several-thousand-dollar annual cost has ever crossed your mind, there is a way to do it without suffering too much.
So How Can You Cut the Cord?
The two most popular ways to cut the cord and save thousands of dollars are:
- Plug in a streaming box at each TV.
- Use a digital antenna.
What’s a Streaming Box
A streaming box is like the cable box, but smaller. It connects to your TV in place of the cable box and enables the TV to receive digital content from the internet. So you’ll still need an internet connection, but the streaming player will then send content to your TV.
Some of the popular streaming players are:
Amazon Fire TV Stick…………………….$39
Roku (several models)…………..……….$49-$129
What Can You Watch Through a Streaming Player?
For starters, anything you’d watch on your internet connected laptop could be streamed to your TV. If you subscribe to Netflix ($7.99/month) any of that content is viewable, or if you’re an Amazon Prime member, any of the thousands of movies on Amazon Video can be streamed.
You can also subscribe to providers like HULU, where you can pay as little as $7.99/month for their content or $11.99 for commercial-free content. HULU offers some of the same channels as cable and they offer a one-week free trial.
Is Everything Free Through a Streaming Player?
No. Some of the streaming players, like Roku, do offer free content along with your ability to watch subscription service you already have, like Netflix, Amazon video, HULU or anything on the web.
But one distinct difference from cable subscriptions is that you’d purchase things ala carte. You wouldn’t need to pay each month for a “Sports Package” or buy 9 channels of HBO every month if you only watch a few movies here and there.
What Makes it Cheaper?
I have the Roku 3 so I’ll compare that to Comcast for example:
Comcast offers a bundled deal for their “triple play” option – telephone, TV and internet service for around $169.00/month. What’s not mentioned though is that you’re renting their equipment and paying for it month after month, year after year.
For example, a typical home may have a Hi-Def cable box with DVR capability in the living room that rents for about 19.99/month.
Then add on $5.99/month for the smaller boxes needed on every other TV in the house. In this example, I’ll assume there are three other TV’s in the house.
So you’re paying $37.96/month or $455.52/year to rent their equipment. That means your $169/month is now about $209.96/month, and once you figure in taxes other charges, you’re probably around $225/month.
Comcast Annual Cost – about $2700.
Roku 3 – the initial purchase for this model is about $89.99. One downside is that you’d need one for each TV in order for family members to watch separate channels simultaneously in their own rooms. So for the same four TV’s, we’re at just under $360 – but it’s a one-time charge.
And you’ll still need a broadband internet connection, so let’s say I stayed with Comcast and paid $45/month for just internet service.
Roku 3 Annual Cost:
First Year – $900 ($540 for internet service + $360 for your initial purchase of equipment for 4 TV’s.)
In subsequent years you’d just pay for your internet service – in this case, $540, and any content you choose to purchase.
Your yearly savings – $2160.00
Think of what you could do with an extra $2160 every year! Groceries all year, a family vacation maybe?
The big difference when you cut out cable and go with a streaming player is that you’re no longer paying for bundled services that you either don’t use or use sparingly.
You’d have the freedom to select just how much content you need – and what you want to pay for.
There are variations between streaming players also, so depending on your price range there’s one to meet your needs.
You can go inexpensive and buy just a Google Chromecast for $35. It’s a small device about the size of a pack of gum that plugs into the HDMI port on your TV. Then you’d install the Chromecast app on your laptop or even your phone.
Now you can direct, or “cast” content from your laptop, tablet or phone to your TV. My daughter has a Chromecast and logs into Netflix from her iPhone and casts shows (hundreds of them!) to her TV.
You can purchase 4 different Roku models, 4 different Amazon Fire Models, or Apple TV.
So the decision to cut the cord with cable TV is all about what fits for your family.
What Can’t You Get Through a Streaming Box?
Okay, here’s the downside. But if you’re determined to save thousands of dollars over the next few years, there is way around it.
A streaming box won’t give you the exact content that you see on your local affiliates of the major TV Channels. Roku does have ABC, NBC, and CBS but there’s no guarantee that you’ll be able to watch the exact local news and weather team you watch on cable. To me, that’s a small price to pay to save over $2000 a year. You can get news and weather anywhere.
Roku does have the free channel NewsOn which is local news from over 130 local news stations.
If you’re a sports fan, NFL football was always an issue when you decided to cut your cable, but now Roku features their CBS All-Access subscription which allows you to stream any NFL game broadcast on CBS in your local market.
There’s also a free internet channel called USA TVNow that streams NFL football among other channels. This channel was once used only by armed services personnel overseas so they could watch American TV, but it’s available free for anyone who signs up for it.
Eliminate ALL Subscription Costs – With a Digital Antenna
If you’re really determined to cut your monthly costs to absolutely zero, there’s a way you can do that and still watch your local TV stations. You won’t see any cable channels, but if you’re ok with local channels, and renting videos or borrowing them from the library, there’s a way to do that too.
You can buy a digital antenna. These aren’t the old, ugly things that used to be on everyone’s roof 30 years ago. You can get a digital antenna that’s only about a foot wide for around $50.
It’s a one-time cost, which will allow you to watch your regular local channels for free. And the picture you receive through a digital antenna isn’t the grainy one like old antennas prior to cable. In many cases, the picture is better than cable.
I purchased a digital antenna from Mohu which is probably the most popular seller. It came in a box a little smaller than a pizza box and I had it setup in about twenty minutes. If you’re not sure what type of antenna to get, Mohu a nice feature on their homepage where you can enter your zip code and it’ll determine the correct model for you depending on what transmitters are near your home.
If you get a digital antenna, that would also enable you to watch sports, news or anything else broadcast on CBS, NBC, ABC, or FOX without paying for cable. Now that’s a way to cut costs!
Try it First
So the choice is all about what’s right for your family. But if you’re serious about cutting out unnecessary expenses, this is one area where you can save literally thousands of dollars.
One way you can dip your toes into this and try it first is to buy one streaming box and just connect it to one TV in place of your cable box. See for yourself what content is available and evaluate what you might be buying ala carte.
See if it meets your needs and compare the price to what you’re paying now. If it does, then convert the other TV’s in your house. And start hanging on to thousands of more dollars over the next few years.
To make it easy to evaluate different options, I’ll list some of the more popular streaming players here. To reiterate, each one of these streaming players would enable you to cancel your cable subscription AND the rental of your cable box. You’d be able to view numerous channels through your home wifi connection
Here are some of the Roku models.
The Roku Express is the most inexpensive option and would be a huge cost saving over cable. For $29 you could say goodbye to monthly cable bills. The Roku Express can connect to your TV’s HDMI port or with the supplied AV cable for older TV’s.
A step up from the Roku Express is the Roku Streaming Stick. It’s twenty dollars more at $49 because it’s has a more powerful processor and a more full-featured remote. If you have multiple TV’s in your house, either one of these is inexpensive enough to buy for one TV, try it and decide if you’d like to go ahead and ditch your entire cable bill.
The Roku Ultra is still another step up at $129 but has a lot more cool features built in, like voice search, a quad-core processor, gaming controls built into the remote, and a host of other options.
There are other Roku models available but these are three of the more popular models. The thing to keep in mind is that the cash you spend on a streaming box is a one-time cost. It would pay for itself within a couple months and from then on, save you thousands of dollars in cable bills.
What would you do with an extra $2000 a year?