Cut The Cord?

Disruption of the traditional cable TV market has been inevitable for a long time. People are always complaining about how high their cable bill is and the commercial advertising for cable companies almost always focuses on undercutting the prices of their competitors’ bills because of just how high the average cable bill is. 2017 could be the year that we see a massive switch from traditional cable to internet streaming TV. The options are there but are the prices aggressive enough? The answer? Yes. Should you think about cutting the cord? Check out the options below.

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In recent years, there have been valid arguments against cord cutting as viable options didn’t seem to be abundant. A common misconception that people have about cord cutting is that it’s just as expensive as traditional cable. This false belief may stem from cable companies advertising prices as low as something like $49/per month despite that definitely not being the price you actually pay. In 2016, the average total cable bill was $103.10 per month. The average bill has been increasing every year since 2010 and it was actually reported by Leichtman Research Group that from 2011 to 2015, bills rose by 39% which was eight times the rate of inflation in the United States.

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In the second quarter of 2016, more than 800,000 cable TV subscribers canceled their subscriptions. At that point, it was the largest exodus seen in the industry and that was when people’s options were just things like Netflix, Amazon Prime, Hulu, and Sling TV. While the first three of those options create their own content, they aren’t necessarily a perfect substitute to cable TV. I’m sure most of the class, or their families, use at least one of those streaming services, but as a compliment to actual cable TV. Sling TV on the other hand offers the streaming of live TV which would serve as a good substitute to cable. Other streaming applications, like HBO Go (or HBO Now) or Showtime Anytime require subscriptions to the companies themselves but allow for watching shows live or on demand. So, in 2016 the options were fair from perfect or ideal but still – a record of numbers switch.

Enter 2017. Enter YouTube TV. Enter Directv Now. Enter Playstation Vue. Stay Sling TV. Enter Soon Hulu.

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If there was ever a time for more people to start cutting the cord, it’s 2017. The above listed cable replacement options are all viable solutions for those who are sick of spending over $100 a month on cable. Those four subscription options each have their own price options based on the number of channels that a customer would want and even the premium priced options don’t exceed the $100 average that cable bills bring. The price ranges of these options are from $30 and can reach up to $70 depending on the desired package. For those wanting to save more money, it’s really worth looking at what channels are necessary before making the decision on what monthly subscription to order.

YouTube TV

YouTube TV has yet to officially roll out but it’s arrival into the market is highly anticipated. As seen above, the subscription is for $35 and offers an assortment of major television channels to be watched from an YouTube capable device. While this subscription service is clearly a competitor to traditional cable TV services, that isn’t the main market that Google is trying to hit. One of the main aims for Google’s service is to reach out to the YouTube generation and get them to pay for TV channels on YouTube alongside the usual video content that they consume on a regular basis.

DirectTV Now

As of right now, the traditional TV company seems to gain the most out of appealing to cord cutters. Unlike other traditional cable companies who are seemingly losing customers to internet TV options, DirectTV’s creation of it’s own option could be appealing. While it could become one of the more expensive options, it’s worth it. By offering add-ons such as HBO and Showtime for only $5 (well below the standalone price), they have the ability to lure customer’s away from their own traditional service and from competitors as well. Those that are predicting the internet TV market have predicted that DirectTV currently offers the best options for all the different types of customers. If none of the above was enough to convince customers, DirectTV’s always been great at offering promotions to customers and their streaming subscription service is no different. For those who sign up, DirectTV is offering the HBO add-on for free for a full year. As someone who has watched his father renegotiate his DirectTV cable bill multiple times, a lot of times you can get their promotions to continue past what they tell you.

Playstation Hue, Sling TV, and the unnamed Hulu Service

Playstation Hue and Sling TV are both options for cord cutters but both have been around for a long time and have been unable to amass a significant market share before the big time players decided to throw their hats in the ring. Playstation’s service becomes complicated because of the different contracts with different broadcast companies in different locations but they have a variety of options for customers. Dish Network’s Sling TV has been around for a while and one of the biggest upsides is the ability to include regional sports channels that often wouldn’t be included in the other big name services because they’re not nationally broadcasted. Hulu hasn’t released much information regarding its live streaming service but they have doubled their customer service representatives as they prepare for the launch and continue to test the service as they search for glitches.
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For some people, cutting the cord isn’t an option they want to consider at all and it makes sense. I know that there’s some buzz out there saying that companies wont actually allow customers to get WiFi without also having cable TV. I tried to do more research about this but based on asking my older siblings who refuse to order cable (in favor of mooching off of my dad’s Netflix/HBO accounts), they get WiFi for a cheap price without needing the TV subscription. If anyone knows more about this, or if they think it’s location based, please leave a comment below. Or if anyone has actually cut the cord and used on these internet TV services, I’d love to hear about your experience thus far!
The days of Internet TV services are almost here and you may save a lot of money by joining early.
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6 comments

  1. laurencondon23 · ·

    Really enjoyed how relevant this post is to the current cable trends going on today! I recently read about cable companies responding to the disruption of cord cutting by offering cheaper plans with a smaller amount of channels to retain their customer base. While this practice of “cord shaving” has aided them in doing so, I can’t help but wonder if this will be enough to save them. In my opinion, the disruption this trend has caused in the industry requires a bigger response similar in nature to the actions DirectTV is taking.

  2. Great post! I’ve been back and forth on the cord cutting issue for some time now. While it seems like it may be a misconception on my part, my only concern with cord cutting is losing access to certain sporting events. Live streaming events through an online source is always an option, but I don’t want to have to worry about quality and security issues. Like you mentioned, cable companies have a good amount of power because of their internet packages. However, I’ve heard rumors about Google actively seeking to enter the internet provider market, which would completely change the game,

  3. The problem with “cord cutting” is that the providers usually still control the last mile. It actually costs me less money to have internet + cable than it does to just have the internet alone. It just changes what they’re charging you for.

  4. I think one potential technology that could disrupt the entire is 5G technology. When consumers are able to even disconnect from cable providers entirely and use their high speed wireless connection as their sole Internet provider, I think traditional cable companies will effectively be put out of business. 5G addresses the “last mile” issue that Professor Kane mentions above, and also frees up money spent on home internet providers for additional subscriber services.

    I cut the cord awhile ago and am able to get by for the most part. Live sports streaming can be a challenge, but it’s something that isn’t too difficult to find if you look for it. I think the biggest relief is not being bogged down spending $100+ per month on television.

  5. cjprall · ·

    Great post! My older sister texted me the other day saying she and her husband really want to finally cut the cord since their bill was going up something like $20 a month with DirecTV. I’ve tried DirecTV Now and Sling TV so far and liked them both, although their Fire TV Stick apps aren’t fantastic. As long as consumers can get local channels over the air for free in HD and still pay to live stream sports, I don’t see how cable lasts in its current form for too many more years.

  6. talkingtroy · ·

    The problem with hoping for wireless providers to be able to match internet speeds is that will likely not be available for people in rural areas. Most of my life my parents have only had one cable option because of where we live and I think most of the country is in the same boat. I also am concerned about net neutrality being at risk in the coming years which could allow companies to provide different levels of speed/data at different prices. Cable as we know it may be changed forever but I think costs will just shift to make internet more expensive. Perhaps all TV will be delivered via internet and we’ll see a pay per view model. Good post.

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