Cutting the Cord Doesn’t Necessarily Mean Cutting Your Bill
Thousands of cable subscribers are cutting the cord in favor of cheaper online streaming services, like Netflix and Hulu, arguing that they shouldn’t have to pay for television they don’t watch. In fact, the 13 largest pay-TV providers—including companies like Time Warner, Comcast and DirecTV—lost about 150,000 video subscribers during the second quarter of the 2015 fiscal year, all thanks to cord cutting.
But are these cord cutters really saving money? Well, maybe not.
To get access to all their favorite shows, the typical cord cutter subscribes to several alternative services. They might, for example, subscribe to Sling ($20) to gain access to ESPN, TNT and CNN; Netflix ($9) to watch “House of Cards” and “Orange is The New Black”; Hulu Plus ($8) to tune into ABC, FOX and NBC; and, finally, HBO’s ($15) new standalone streaming service.
When you add up these costs and the cost of your home broadband access—which averages around $80—cord cutters are actually spending more than the typical American household which pays around $90 a month for cable television service.
“All these things are so much more expensive when you separate them out,” said David Bank, an analyst at RBC Capital Markets, told the Wall Street Journal in October. “You are going to have to pay more for less choice.”
For individuals who only want to watch a specific set of shows, opting for standalone streaming services is ideal. The majority of people, however, want a variety of on-demand and live programming which only cable companies can provide. So before you cut the cord, think twice as it might be costing you more than you think.