Want to save money? Cut the cable cord! That's common advice for quickly finding more room in your budget, and TV streaming services these days, such as Netflix, Amazon Prime Streaming, and HBO Go, make it easier than ever to say goodbye to cable. But as expensive as cable is, cutting the cord won't always save you as much as you might think.
Showtime is the latest network to introduce a standalone streaming and on demand service, following HBO Now's lead. We're seeing "cable a la carte" actually start to happen, the thing many commenters have rallied for ("I don't need all these channels, I just want to pay for the channels I actually watch").
The truth is, it's not so much the number of channels you get that makes cable TV cost so much, but the types of content that's provided: namely sports and other big-draw live events channels. Check out this chart of the amount cable providers paid top networks each month per subscriber in 2014:
The median cost per channel is $0.14, but ESPN alone has cable providers paying $6.04 per subscriber--a cost that gets passed on to you plus markup. The average cable subscriber pays $54.92 per month for basic service, according to Kagan and the Wall Street Journal, and much of that is because of sports programming and a handful of channels.
You can definitely save more by going instead with just Sling TV ($20 a month, and it includes ESPN and TNT) and your internet provider. If you want, you can add HBO Now ($15), Showtime ($11), NBA ($3), MLB TV ($7), NFL ($13), Netflix ($8), Hulu Plus ($8), and/or Amazon Prime Instant Video ($8) as you see fit.
The a la carte option will require you to get a TV streaming device (which the Washington Post has a handy comparison chart for) and set up multiple accounts for. Sling TV also has some limitations, such as inconsistent on-demand titles and no traditional DVR option, which changes the universe of shows you can watch compared to cable.
All of these alternative options still add up, especially when you consider you'll need high-speed internet to watch any of this. High-speed internet costs an average of $60 a month, according to the Washington Post.
When bundled together, however, internet and cable services can be even cheaper via your cable provider than internet plus these various a la carte options--even with the sports channels included.
I'm paying $90 a month for cable service that include HBO and Showtime, 50/50 internet access, and basic phone service thanks to a bundling offer and some loyalty discounts. I have tons of unnecessary channels I'll never watch and wish I didn't have to be locked into a contract for the discount. But for now it's still cheaper for me to stick with the bundle.
I'm no cable provider apologist. I know the horror stories from most of the providers and there's ridiculous price gouging in this monopolistic environment. I think it's great that alternatives to cable are on the rise. I'm just waiting for a truly better solution to cable come around and hoping you do the math before concluding that cutting the cord is always cheaper.