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.
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.
A different kind of customer service
Cable companies have been hammered for bad customer service, and I can relate. When I rented an apartment during graduate school, a glitch in my cable company’s system erased my credit card information and an automatic payment failed to process. Service was immediately disconnected, and I spent several hours on the phone getting the customer service rep to admit it was their fault and to waive the fees.
Kagan compared the way people think of cable company customer service reps with how audiences felt about telephone companies when Lily Tomlin portrayed Ernestine, a nasal-voiced terror of a telephone operator.
But here’s the thing: There’s only one number to call when you have a problem with cable. Now, when a streamed movie won’t load, it’s hard to tell whether I should call the Internet service provider, email Netflix or Hulu Plus or bring my iPad in to the Apple store.
So it’s hard to say if I’d actually get a better customer service experience if I ditched my cable provider altogether.
After all that research, here’s my plan
I’m not going to cut the cord completely. I think a hybrid cable-plus-streaming approach will work best. It’ll give me the option that fits my budget and drastically cuts down on the likelihood of paying for a lot of channels I will never watch.
Time Warner Cable, which is one of the providers available to me, offers bundled services. My hybrid approach breaks down like this:
|Plan A (per month)||Plan B (per month)|
|Standard TV (20-plus channels) with 15 Mbps Internet||$44.99||Deluxe cable (200-plus channels) with 30 Mbps Internet and home phone||$129.99|
Source: Time Warner Cable, Netflix, Hulu Plus and Amazon
I’m leaning toward plan A. I figure I won’t need most of the channels offered in the deluxe package. I’m not interested in ESPN, and I can get a host of movies and TV shows through Netflix, Hulu Plus and Amazon while saving roughly $60 per month.
But that’s just me. If you’re considering your options, I’d suggest a few important tips.
Think it through
Do some homework first. Make a list of deal-breaker shows or channels and check to see if they’re available on streaming services. You should also call your cable company to ask about your options if you want to downgrade.
If you’re totally new to streaming, it makes sense to test the services before you make any big changes. Canceling cable can be complicated and, if you’re under contract for a one- or two-year commitment, expensive. However, it’s very easy to sign up for most streaming services and cancel them without financial penalty if you discover their content to be totally out of line with your tastes.
It also pays to take a look at the back of your TV. If you find a USB drive there, then Google Chromecast and Amazon Fire TV offer quick, low-cost options for getting streamed content onto a screen bigger than your phone or tablet. You should also consider higher-end devices like Apple TV or Roku, both of which make watching streamed content on your TV easier.