When considering the high cable TV cost, many people believe they would save money by canceling their cable TV subscription. It seems like you would save a lot of money if you could simply watch TV using an antenna or stream the TV shows from online. Each time we open the cable bill and see the exorbitant rates we pay for television, it's tempting to make the indignant call to cancel. After all, TV was free when we were growing up.
Hang up the phone! Canceling your cable subscription may not be the savings you had expected.
If you are the type of person who rarely turns on your TV and you are the only one in your household, perhaps canceling your cable service will save you a bundle. But if you're the average TV viewer, you may be surprised at how much more it can cost to cut the cord than to keep your subscription.
How to know if you'll save money after canceling cable
Before you pick up the phone to cancel Cable TV, stop for a moment and think about how many TV shows you might watch in a month—a rainy month when the TV season is in full swing, not during the reruns of sunny summer months.
Don't cancel cable if you:
- follow more than 4 shows each week
- have more than 2 people in your household that watch TV
- like to fall asleep to the TV
- like CBS TV shows
- don't want to invest in a DVR, DVD recorder, or pull our an old VCR
- don't want to "shush" your family during shows and make them wait until commercials to talk to you
- want to talk about last night's TV shows around the water cooler—on Facebook, in Twitter feeds
- have an internet provider that limits your internet use (Most do!)
- have a slow (under 2 or 3 Mbps) internet connection
- like to watch live sports events
Internet caps and overages can cost more than cable
Most internet providers place a cap on the amount of information—files, videos, emails, photos, music—that you can download or stream each month. It is shocking how quickly it adds up.
Imagine how much your internet usage could be in a day. You stream a TV show on Hulu each day. While searching for the show you want to watch, you might find another that a friend mentioned and you check it out. In addition, your spouse and children watch their shows every day. At bedtime, you don't feel tired so you check out a Frasier repeat on Netflix.
By the end of the day, it adds up. It is easy to go over your limit when streaming TV shows and movies every night. A two-hour movie can use 2 or 3 GBs of your download allotment. Since I cancelled cable, I've had two months where my overages alone cost more than $200. I've never paid that much for a cable subscription. If I hadn't cancelled cable, I would watch several hours of TV directly from cable. That could eliminate 3 GB of internet usage a day (90 GB per month) and I wouldn't have overage charges.
Comparing the real cost of stream to cable TV cost
Streaming TV is rarely free. Netflix and Hulu Plus charge monthly subscription fees to stream directly to a connected TV, media player, smart phone, or tablet.
To illustrate, here are my real streaming costs per month:
Netflix —7.99 per month
Hulu Plus— 7.99 per month
Spotify (unlimited music streaming)— $10.00 per month
Buying missed episodes of TV shows - 2 per week at $2.99 or $3.99 each = $31.92 for high-definition
Overage limit internet cost - our small local cable company charges an exorbitant $1.50 per GB over our limit. AT&T charges $10 per 50 GBs over, Time Warner Cable charges per GB up to $75.
Typical total cost per month= $57 plus overage fees that can easily cost another $25, $50 or even $200 per month. This is in addition to the cost of your internet service which could be $10 or $20 cheaper if you have it bundled with cable TV programming.
For the extra money you pay to stream TV, you still don't get all of your TV shows or added convenience.
Beyond the difficulty of finding CBS episodes to watch for free, or paying for them, you also don't get any live sports events that air on TNT, ESPN, or other cable channels. If you don't mind watching highlights or viewing the game hours after it was played, you can pay for a subscription to ESPN and stream the games after they take place.
Finally, many cable and satellite companies offer a set-top box with a built-in DVR to record TV shows, or with the ability to pause shows while they are airing. Without a DVR, you can't pause live TV to pay attention when your family wants to speak with you. The TiVo Premiere DVR can record from antennas or basic cable, but there is a $19.99 per month subscription fee with a year's commitment.
Is Cable TV or Streaming TV right for you?
Again, if you have an active lifestyle, empty nest, and like to read a lot, perhaps streaming TV can save you money. If you relax in front of the TV more than occasionally, you might want to keep your cable.
If you decide that you want to cancel cable, learn how to get your TV shows.
As for me, I've got the call into Dish Network. They have some exciting new features that will be available on their Hopper set top box. Stay tuned.