Does Cutting the Cord Still Save Money?
For years, budgeting gurus and technology experts alike have encouraged households across America to cut the cord on cable TV. Switching to streaming content was an easy way to deflate a bloated cable bill. But recent rises in subscription prices for streaming services have us wondering.
Can you still save money cutting the cord on cable?
The answer to that question is increasingly complicated. Nearly 40% of households in the U.S. have pulled the plug on pay TV, and experts indicate that percentage could top 45% by 2024.
The point of cutting the cord is to save money, but many households now sport a patchwork quilt of subscriptions to premium streaming services that may not be cheaper than their original cable TV bill. (Frugality fail anyone?)
Cable vs. Streaming Subscriptions: A Cost Comparison
There’s clearly a financial tipping point where too much content at your fingertips can get out of hand. Let’s take a closer look at the recent price hikes for streaming services and crunch the numbers.
How Much Do Popular Streaming Services Cost?
|Streaming subscription||Monthly cost||More info|
|Netflix||$9.99/$15.49/$19.99||Cheaper ad-supported subscription coming soon||SEE DETAILS|
|Amazon Prime||$14.99 (Prime membership) $8.99 (Video only)||Amazon Prime prices rose in early 2022||SEE DETAILS|
|Disney+||$7.99 (ads)||Ad-free will jump to $10.99, ads will be $7.99||SEE DETAILS|
|HBO Max||$9.99 (ads) …………….. $14.99 (no ads)||Some content removed before Discovery+ merger||SEE DETAILS|
|Discovery+||$4.99 (ads) ……………… $6.99 (no ads)||Get 6 months free with Verizon unlimited plan||SEE DETAILS|
|Hulu||$6.99 (ads) ……………… $12.99 (no ads)||Prices go up to $7.99 and $14.99 on Oct. 10||SEE DETAILS|
|Apple TV+||$4.99||Subscription includes family sharing||SEE DETAILS|
|Paramount+||$4.99 (ads) ……………… $9.99 (no ads)||T-Mobile and Sprint customers get one year free||SEE DETAILS|
|Peacock||$4.99 (ads) ……………… $9.99 (no ads)||Peacock basic provides access to some free content||SEE DETAILS|
|Starz||$8.99||Amazon and Hulu offer a seven-day free trial||SEE DETAILS|
|ESPN+||$9.99||No ad-free option||SEE DETAILS|
|Showtime||$10.99||99 cents a month for Amazon Prime Students||SEE DETAILS|
Adding up the monthly cost of multiple streaming services, especially without advertisements, can get pricey. There’s also the cost of upgrading hardware like routers and choosing a streaming device such as Amazon’s Fire TV Stick, Roku or a game console like Xbox or PlayStation.
You’ll also have to pay for more bandwidth or upgrade your internet connection to stream HD content. Does the cost of the equipment and services necessary to cut the cord now outweigh that hefty cable TV bill?
For instance, let’s say you have an Amazon Prime membership (it includes access to their video content), Netflix Premium and Disney+ for the kids without ads. And you’ve recently added HBO Max and Hulu to watch all that buzzworthy TV sans ads. If you add in ESPN+ for sports content, your streaming services budget will top $83.94 monthly — plus the cost of high-speed internet.
The internet connection you’ll need to stream HD content on multiple devices isn’t your standard bandwidth. Most households find they need fiber and opt for higher data caps to accommodate cutting the cord. That places the internet bill closer to $90-$100 a month than the standard $60 a month.
Before you cut the cable cord, investigate your internet provider’s data cap and what penalties exist if you exceed it. If you can afford it, consider choosing an unlimited data plan or a provider that doesn’t have a cap. Some internet service providers give households a couple of grace periods before they charge overage fees, which tend to start at $10 for every GB.
Odds are, it’s still more affordable to cut the cord and keep streaming even if you upgrade your internet speed. In 2020, the average U.S. cable TV bill topped $217.42 per month, making it one of the most expensive household utility bills. Average monthly costs sometimes include discounted internet access or phone service as a bundle.
Cut the Cord or Keep Cable? It Depends on What You Watch.
Cutting the cable TV cord makes sense for people who enjoy premium content and movies. In essence, you’re cutting out the middle person and only subscribing to what you want to watch. But a stable of streaming subscriptions adds up fast. And live TV, sports programming and foreign language options can be problematic for cord-cutters.
Cord cutting may not be the best fit if any of the following describes your household.
Paying for ESPN+ doesn’t mean die-hard sports fans get all the games. Most NFL games and Monday Night Football aren’t available on ESPN+. Live sports continues to be an area of premium content that’s tricky for streaming providers because broadcast TV networks have exclusive agreements with some national teams.
In a recent study, nearly half of the households who didn’t cancel cable responded they did so to watch their favorite local sports team. There are still options but they’re pricey. YouTube TV, a popular choice for watching regional sports networks, comes in at $64.99 a month.
If you like having a menu of live channels to scroll through, the cut-the-cord campaign may not be for you. While you can try live TV streaming services like Sling TV or YouTube TV, they’re more expensive than a standard streaming subscription, with packages ranging upwards of $50 per month.
Spanish Language Programming
Watching multilingual programming is more difficult when you cut the cord on your cable company. Certainly, plenty of streaming apps offer foreign TV, some of them free. However, finding news, sports and other Spanish-language content usually requires a subscription to a live TV service like YouTube TV.
How to Cut the Cord on Cable TV And Still Save Money
Here are a few ways to keep your cultivated streaming content from growing into a tangled web of expensive subscriptions.
- Lean into bundles
- Prepay for a yearly subscription
- Leverage promotions
- Binge and bounce
- Get an antenna for local channels and live TV
- Put up with some ads
- Use the internet
- Consider DVDs
- Look for student or senior discounts
- Be wary about password sharing
1. Lean into Bundles
Several streaming providers have banded together to promote affordable bundles. One of the best discounts around is the Disney+, Hulu and ESPN+ bundle, which provides all three subscriptions for $14.99 per month (current promotional price is $13.99).
2. Prepay for a Yearly Subscription
You’ll get a small but significant discount if you can afford to pay for a yearly subscription upfront. Reserve this approach for your most watched streaming service, as you may be locked into their content for the coming year.
3. Leverage Promotions
As with most services, promotions abound if you know where to find them. For instance, HBO Max, one of the more expensive premium channels, has 40% off until Oct. 30 on ad and ad-free subscriptions.
Keep an eye out for other special promotions in unexpected places. For instance, when you bought an iPhone, Apple offered three months of free Apple TV+ in 2021.
4. Binge and Bounce
If there’s a show you are dying to see on a subscription you don’t have, sign up for a month and binge watch it. Read the fine print carefully, and make sure you aren’t committing to a longer subscription.
For instance, you can pay $1.99 for Disney+, but it’s a promotional rate that automatically renews at the end of the month at $7.99 a month unless you cancel it.
5. Get an Antenna for Local Channels and Live TV
Want to catch some sports and local news but don’t want to pay for a live TV streaming service? Break out an HD antenna, mount it on your TV set and pick up free local broadcasts.
Take heart if you’re slightly horrified remembering the mammoth TV antenna your parents had mounted on the roof. Today’s smart TV antennas are less intrusive and easy to install.
6. Put Up With Some Ads
Part of the appeal of streaming content is getting what you want to watch when you want to watch it, so most subscriptions used to be ad-free. Many now offer a version with ads at a lower cost, and a few, like Peacock TV, even have free content if you’re willing to sit through commercials.
7. Use the Internet
Pop into websites for the major networks you find on cable and satellite TV, and you’ll discover all sorts of free content. And if you have a Roku or Fire Stick, there are often free streaming apps like PBS or YouTube TV you can download.
8. Consider DVDs
Give your library card or an old-fashioned Netflix DVD subscription a workout. If you’re willing to wait, you can watch old seasons of some shows and movies on DVD. Having a few DVDs on hand can also curb impulse buying content from Amazon or Apple when you’re in the mood for a movie night.
9. Look for Student or Senior Discounts
Amazon Prime, Hulu and a few other streaming services offer discounts and special pricing for students and, in some cases, seniors. For Amazon Prime student membership — which comes with perks like saving on textbooks, free LinkedIn premium, discounts on Showtime and more — the cost is about half of the regular Prime membership.
10. Be Wary About Password Sharing
And last but not least, a word of warning about sharing logins on other streaming devices. While Netflix and other streaming services offer a family membership to clampdown on password sharing, it’s still something customers often do. More than 100 million people use a shared password, Netflix said in 2022.
Netflix mooching has become such a problem that the provider may tack on an additional fee for every sub-user on an account. If this approach works, it’s likely to take off with other streaming services like HBO Max, Hulu and Disney+. So keep the password sharing to a minimum so we can all catch up on old Game of Thrones episodes before the crackdown.
The Bottom Line on Cord Cutting
Cutting the cord on cable TV still makes good fiscal sense for most households. The trick is thinking outside the cable box to find affordable options for live TV services, so you don’t have to pay extra to catch the big game or the local news.
Kaz Weida is a senior writer at The Penny Hoarder.