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Cost of cable TV vs. Internet streaming

Cutting cable cord © Burlingham/Shutterstock.com

When was the last time you watched TV on a TV? The rise of Internet streaming services like Netflix, Hulu Plus and Amazon Prime has inserted some welcome competition into the marketplace, giving long-suffering cable customers an alternative they've craved for years.

Over the past few years, traditional cable companies have seen their overall subscribership drop. Telecommunications research firm MoffettNathanson estimates the loss at roughly 3 percent per quarter from the first quarter of 2012 to the second quarter of 2014. Meanwhile, Internet streaming continues to expand. CBS and HBO announced new streaming services in October, and DirecTV started offering non-subscribers its NFL Sunday Ticket service over the Internet.

What does that mean for you? Options. The pricey, one-size-fits-all cable package is history. Viewers will be able to choose from an ever-expanding menu of service on the Internet. And cable companies are going to fight to keep their market share with new products like mobile apps and cloud-based DVR programming, telecommunications analyst Jeff Kagan says.

"The user can watch whatever they want, whenever they want on whatever device they want," Kagan says.

Let's put those options to the test:

I currently shell out $25 a month for Netflix, Hulu Plus and Amazon Prime, which includes its Instant Video streaming service. But I'm not a true-blue cord cutter. I've been living with my parents to save money while I pay down student loans. Although I don't spend much time surfing channels, I won't pretend I don't enjoy binging on HGTV or the Cooking Channel.

When I do get a place of my own, I want to spend no more than $100 per month on cable and streaming services. Mind you, that's not counting the cost of a TV and Roku 3 streaming device.

And since the key to saving money is often some careful forethought, I've already started planning. Here's what I have learned so far.

What I'd get with Internet streaming:

  • Greater flexibility: Unlike most cable companies, streaming services offer the ability to sign up and cancel without termination fees. For less than $10 per month, I could sign up for Hulu Plus or Netflix, browse what they have to offer, and if I don't like it, I can cancel.
  • A different viewing experience: On Hulu Plus and Amazon Prime Instant Video, I can subscribe to my favorite shows. That means the service will let me know when new episodes are available and make them easy to access by placing them prominently on my customized home screen once I sign in. Things work a little differently on Netflix. The service uses the content I watch and recommends similar TV shows and movies based on my ratings.
  • No Internet, no viewing: For anyone who uses a satellite cable provider, stormy weather often calls for watching a DVD because of poor signal reception. When you rely on streaming services for some or all of your entertainment, power outages will be your nemesis. You can't stream when your Wi-Fi router loses power.

Bankrate Audio

Cable vs. Internet streaming costs

Transcript

With streaming services like Netflix, Amazon Prime and Hulu Plus, when's the last time you watched TV on a TV?

As traditional cable companies see continuous drops in their subscribers and more and more Internet streaming providers offer better services, they're giving you options. It's time to say goodbye to the one-size-fits-all cable package and shop around for the entertainment package that fits your needs.

With cable, you'll have access to more channels and more shows, live sports and in some cases, some streaming options.

With Internet steaming, you'll get greater flexibility in your account, a personalized viewing experience -- like the ability to subscribe to your favorite shows -- but you rely solely on an Internet connection.

Before you cut the cord entirely, be sure to do your homework on the pros and cons of both. But if you don't have time to research, we did the heavy lifting for you.

For our complete breakdown of the cost of cable versus the cost of streaming, visit Bankrate.com.

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What I'd get with cable:

  • More shows: I admit that I channel surf, and occasionally I do stumble upon shows that I was never actively looking for. That's a nice perk of an otherwise expensive cable service. Is it worth it? Not for me. When it's my turn to pay the cable company, I think access to 100-plus channels will be the first thing to go.
  • Sports: ESPN and other major sports networks are a staple of basic cable packages. If your quality of life would suffer without access to NFL, MLB, NBA or NHL games in real time, then you're going to need to keep that cable intact. My interest in professional sports, however, extends only to the annual CrossFit Games, the FIFA World Cup, the Olympics and the Super Bowl.
  • A little bit of streaming: In some cases, a cable subscription will get you online programming from ESPN and other major networks that may restrict Web access for other Internet users. But you may not want to rely on that capability: Watching a 20- or 40-minute show in an Internet browser doesn't make for an ideal user experience.
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