According to an article from Fortune, the average cost of a household cable page rose again last year to $103/month. Leichtman Research Group releases the results of its annual survey of TV households, including what people actually pay, and every year is a new record. Bills rose 39% from 2011 to 2015, almost eight times the rate of inflation, and the $103/month cost in 2016 was up from $99/month at the end of 2015. These costs seem to be going nowhere but up, so investing in the equipment and internet bandwidth necessary to live stream television shows, movies, and sporting events will quickly result in monthly savings for cable subscribers.
Gone are the days when you had very little choice in the television shows you could watch. Today, you have options ranging from monthly cable service (often bundled with home phone and internet services) to satellite TV services, to live streaming shows from the internet right into your home. If you are considering ditching your cable subscription for a live streaming option, there are a few things you will need to do.
The first thing you need to do before you cut cable out of your life in favor of streaming television is test your internet connection to be sure it can handle live streaming, which takes a lot of bandwidth. You should have at least 5MB per second for a single live stream. If there are other people in the house who are also live streaming, you will need more bandwidth to allow multiple devices to stream at the same time. Approximately 10-30MB per second should allow two to three devices to stream simultaneously.
Next, purchase an HDTV antenna (usually around $10) for all your local on-air network television stations. Nothing beats a dedicated set top box, and the Roku ranks at the top of the list. You can hardwire it via an ethernet cord, or use the built in WIFI capability. The box connects to your smart TV via HDMI, and there is a micro SD slot for extra storage. There is also a USB port on one side for sharing photos and music. The initial investment (around $100 for the Roku 3) will pay for itself within 90 days for most people, but could be as little as 30 days, depending on how expensive your current cable package is monthly.
In addition to subscription services like Netflix and Hulu, and satellite services like DirecTV and Dish, there are other options for watching television such as YouTube, Amazon Prime, Apple TV, and premium services like HBO and Starz. Some services like Sling TV and DIRECTV NOW have in-browser viewing, which allows you to watch TV within your browser. These devices can cost anywhere from $30 to $100+ but many services offer consumers a free device such as a Roku or Apple TV if you agree to pre-pay for two to three months of service. Most of these devices also offer a lot of free content.
More than 800,000 people dropped pay TV packages in the second quarter of 2016 according to research firm SNL Kagan, with the overwhelming majority citing excessive cost as the reason. Nielsen reported that according to its research, Disney-owned ESPN had lost more than 11 million subscribers since 2011, or more than 10% of its total customer base. In the past, consumers were forced to select packages and bundles with scores of channels that they may not have wanted and rarely (or never) watched. These extra TV channels pushed up the price of monthly bills significantly, and what was advertised as a low $40-$50 per month quickly became over $100, with most consumers of satellite TV services locked into a second year of service often costing twice as much as the initial low 12-month price, and no way out of the contract without substantial penalties being assessed.
Switching from a cable or satellite TV service to watching your favorite shows from the internet is a great way to trim your budget and start redirecting some of your hard-earned money into savings or paying down your debt every month. For example, a second year of service from a satellite provider can easily run you well over $100 per month, while a simple Netflix or Hulu subscription can be had for under $10 per month. That is a huge savings!
If you already pay for an existing internet connection, adding a subscription service like Netflix or Hulu (or both) will result in a serious chunk of change staying in your pocket, and if you are past the two-year mark in your satellite TV contract, you can drop the service immediately without penalty. If you have been searching for a simple way to save money, cutting the cord to your cable TV subscription is a great (and relatively painless) place to start.