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Is it Time to Get Rid of Cable Yet? Print E-mail
(8 votes, average 4.75 out of 5)
House - Maintenance
Written by Omie Ismail   
Friday, 16 October 2009 12:56
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Is it Time to Get Rid of Cable Yet?
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During the 1980s and 1990s, cable enjoyed explosive growth in the United States. Typically created as a local monopoly, entrepreneurs were able to invest in the required infrastructure and recoup their investment by charging monthly fees for access. Consumers ate it up as the selection of cable channels grew and the relative picture quality was excellent. When the Internet came along in the 90s, cable companies were well positioned to offer access to the web and further leverage their infrastructure. Threats from satellite developed, but cable companies still maintained their dominance...until now.

The very service that they offer, high speed Internet, threatens to undermine their content offerings. Most consumers that have cable watch very few channels. They might have 60 to 150 channels available, but the reality is that many consumers will watch very few of them. As more and more of these programs move online, some consumers will decide that its far cheaper to eliminate their cable and go with an Internet-only plan plus a streaming content service like Netflix or iTunes. Given the huge audiences of both of these services and there increasing libraries of content, its only a matter of time before this shift happens. The economics for the casual TV watcher wanting to cut his or her costs are significant. With Netflix, the marginal cost for streaming an unlimited number of movies or TV shows is nothing. With iTunes, shows and movies cost anywhere from $1.99 to $3.99 each.

Neither of these is a perfect substitute for cable, but they are getting better at what must be an alarming rate for the cable operators. The Internet holds the promise of letting you watch what you want, when you want it; a sort of "a la carte" approach vs. cable's 5 course pre-fixe meal. For content creators like HBO or even individual producers, the Internet may allow them to bypass the cable monopolies and monetize a greater amount of their content directly with the consumer. And as new HDTVs have direct Internet connections, the trend will only accelerate. But the cable operators have a ton of clout right now and HBO derives virtually all of their revenue from them, so cutting the cable operators out will be nearly impossible for HBO and other networks.



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lindaspreeman  - Linda Spreeman Comment |2011-03-17 14:21:05
I thought - yippee - when Comcast in our area finally had competition (Verizon) only to discover Verizon is no bargain either. It's basically six of one, half dozen of another. The Comcast bill keeps going up -- in this economy -- what's up with that? Furthermore, to remove an item from the "bundle" doesn't save anything - maybe $5-10. What a racket! When will some REAL competition enter the market??? ~Linda Spreeman~
excal  - It's sports that keep me from dropping my satellit |2010-11-29 23:09:36
I'm the sports fanatic in my particular household. There are very few shows I watch that I can't find elsewhere, but for sports, streams are unreliable. They're frequently interrupted due to bandwidth issues or copyright enforcement, they're often of poor quality, and when the event in question takes place during working hours, I'm often prevented from even trying to find them out of a desire not to get fired. It's just not feasible. So, I pay (too much) for satellite. For most of the year, I pay a bit less than $80/month to get everything. (From mid-May through mid-August, that drops by $25/month, as I don't have to pay for the most expensive of my sports-watching habits, the English Premier League)

Is it cheap? No, but I can justify it (read: rationalize it) by this: I used to attend a lot of sporting events live. I'd imagine I don't need to tell anyone how not-cheap that is. By a rough guess, in 2010 I will have watched approximately 50-60 MLB games, 25-30 NFL games, 15-20 NBA games, a significant portion of the Blackhawks' NHL playoff run, and over 50 Premier League matches, English domestic cup ties and Champions' League matches. I left out the World Cup because I likely COULD have found streams for those. The cost of attending even a fraction of those sporting events, even if they were all located in close proximity to me (they are not. I live in a small-ish town an hour and a half from the nearest NBA facility, more like three to four hours, depending on traffic, from the nearest MLB, NFL and NHL facility, and I live about 5000 miles away from England,) would far exceed the ~$900 per year I spend on satellite TV, and while I'm not a huge tv-watcher outside of sports, I do watch other programs, many of which aren't available to me any other way, so there's added value there as well.

Really, for sports nuts like myself, I don't think dropping cable/satellite will be an option until it is legal to stream (and record!) live sports, because until it is, such streaming, while it does exist today, will of necessity be extra-legal, and simply not able to do what we want it to do.
ron  - dropped satellite |2010-09-06 13:10:51
i was paying close to $900yr.i bought a small indoor antenna($50)and hooked it up to a dvr($250)and now get 11 digital tv stations(free).luckily my library is only 2 miles away and has thousands of dvds that can be checked out for a whole week,5 at a time(free).i dont miss that $900yr bill at all!
Pam  - Cut the satellite |2010-05-25 03:04:54
My husband and I started looking for ways to cut back expenses when his company began sending people home without pay for 1 week every month. We realized exactly what this article is saying. We had all these channels, paid this bill that was always rising, and we only watched a few channels. Our solution was to cut the TV back to only local channels and buy a Roku, to stream video from our existing Netflix account. It was great! We love it. We made the switch over a month ago and are enjoying the on-demand content. I highly recommend this. The roku cost 69.95, one time and you own it. The total savings for us is over $50/month. We cut some other expenses as well. But, this seemed to be the most difficult decision for the family. We were definitely emotionally attached to having that service available, even if we weren't using it very much.
Ed  - I dumped cable 2 months ago |2010-05-18 18:38:05
I noticed that I was watching TV infrequently and using the internet more and more. I canceled my cable altogether and now watch the network and PBS channels. To be honest, I don't really miss cable. I can watch hulu if I want to, but rarely do. TV is passive entertainment and I seem to prefer the internet. Sorry cable company.
Barry McGee  - Mr |2010-05-17 08:49:59
Tonberry, you are exactly right. Comcast structures the so called bundle's so you do not save by getting rid of something. I called them last week. Hey, how much will I save if I get rid of my home phone $4.00, but u charge $29.99.deregulation, if thats what it's called has screwed cunsumers and made comp. like comcast billions.I live in Chesterfield County, Va. and comcast is the only cable co allowed in this county thanks to the board of supp. Whats up with that. My hard phone line I can get any comp I choose. Getting pissed so thats enough for now.I just wished i new how we could fight back. Barry
tonberry |2010-04-07 08:17:43
i only have internet through my provider and that is $65 per month, they charge you more when you do not have cable too, so with cable the internet would be 45 but then the cable part makes it even more expensive
Omiewon  - $45 a month, ouch |2010-04-07 09:37:59
With cable that is ridiculous especially if it is the cheapest option. Cable Internet shouldn't be more than $25 a month. In other countries, Internet access is so much cheaper than the U.S. In France they have speeds that are likely 10 times faster than our cable for about the same price. They are also deploying 100MBit/sec connections!
chitown  - save the tivo! |2010-01-05 17:07:18
we're also ditching my new wife's old $100/month cable plan. we mostly watched network tv shows but thru comcast on-demand, and we watched a lot of the on-demand movies and the free movie channels (movieplex and a few others). we recently started a mix of netflix (they have tons of on-demand programming included for free with the dvd rentals), tivo (to record and watch on-demand network tv from a digital antenna), and hulu.com (for non-network tv shows like the daily show). we're getting the exact same programming as before but we'll be saving $88/month. we actually tried bargaining with comcast (we would have kept it for the sports), but they didn't want to budge so we got the enjoyment of telling them to bug off. we have cable internet access paid for by our employers for working from home, so our total tv bill will be just the $12/month tivo fee. plus tivo acts as an interface to the netflix on-demand. i haven't used itunes or amazon's video "rental" service, it seems like those would add up pretty fast, but might be nice every now and then. we'll test it as soon as we find something we can't watch with this setup.
chitown  - oops |2010-01-05 17:11:25
math error, we'll be paying $12/month for tivo + $13/month for netflix = $25/month. so that'll save us $75/month.

btw, we just grabbed an old pc to hookup to the tv, so my combined investment was the $20 for a dvi to hdmi cable.
Omiewon |2010-01-05 18:37:28
Chitown, love this kind of stuff. The cable companies have a real problem when the revenue is dropping from $100 to $25. And the Netflix is really like getting more since the newer movies that you get via DVD are really more like a replacement for Pay On-Demand which would cost you $4 a pop.

I think Amazon's service is looking like it will go down the tubes. They are starting to give lots of freebies when you buy their stuff. I recently got two free $5 downloads and didn't even bother to use them. One was restricted only to certain content, none of which I was interested, but the other was unlimited selection. I suppose I could mess around with it, but paying $4 a pop just isn't in the cards.
lakeview  - Cable and High speed are a waste |2009-10-19 19:37:59
Great idea. Agree completely about the useless channels. I have been wondering why we need both from the same provider. Seems like with high speed internet is way to go. Looking forward to using your advice. Great posting!
Omiewon  - Unbundling of Internet |2009-10-19 20:24:34
The thing that bothered me for years is that if you wanted Internet only the phone providers wouldn't let you have that. You had to pick up a phone line that you probably didn't need. The problem with the phone line is all the federal and state taxes that boost up the cost, not to mention the high long distance rates.
I did hear AT&T advertising $19 Internet only but the speed is pretty low 768/384. But the unbundling is a start that will make it easier to dump the cable operators. I also noticed that Directv is pushing $29 but again that's for 150 channels, 90% of which you will never watch.
kellyb  - read a book! |2009-11-12 20:11:45
My husband and I live quite cheaply although are always looking for ways to live even cheaper...thank you for the site! We spend $15.04 on cable/month...we are the only ones we know that don't have a more substantial package:( Nothing on our 24 year old tv? (Which is often) We play board games and read as a family. We couldn't be having more fun doing so!
Omiewon |2010-01-05 18:39:09
Not sure why cable should cost more than $15 a month. When I lived in Florida it was that much (guess they target the seniors with cheap cable). When I came to California basic cable was $35 for next to nothing. Just wish I could get HBO without the rest of it. A few more years.
sexygurlforeva |2010-11-14 13:41:54
it is no d*** reason that any of us should pay...what $45 a month.that is bulls***.i can give them $5 every 2 months.but $45.are you serious?f*** them.
 

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