Another Day, Another Flimsy Report Claiming TV Cord Cutting Won't Save You Money

from the denying-the-obvious dept

Mon, Jan 29th 2018 6:29am — Karl Bode

Once a month like clockwork, somebody in the tech press proudly decides to inform their readers that you can't save any money by cutting the traditional TV cord and going with cheaper, more flexible streaming alternatives. The logic in these reports almost always goes something like this: "Once I got done signing up for every damn streaming video service under the sun, I found that I wasn't really saving much money over traditional cable."

Writers leaning into this lazy hot take almost always tend to forget a few things.

One, the same broadcasters dictating cable TV rates dictate streaming video rates, so in some ways pricing will be lateral. Two, adding a dozen streaming services to exactly match your bloated, 300 channel cable subscription misses the entire point of cord cutting, which is about customization and flexibility. Three, if writers actually stopped and talked to real consumers (like in the cord cutting subreddit), they'd be told (repeatedly) how customers routinely save money each month by breaking free of the traditional, bloated cable TV bundle.

Last week it was Quartz's turn to prop up the flimsy narrative that "streaming’s live-TV bundles aren’t actually saving cord-cutters money." Their report was at least somewhat more scientific in nature, leaning heavily on data provided by a research firm by the name of M Science, which acknowledged that the average cord cutter saves around $20 per month by going with a streaming alternative. But the firm then tried to claim that this savings disappeared when you factored in cable company "triple play" bundles:

"When paired with the cost customers continued to pay their cable providers for things like internet, phone, or additional TV packages, the savings vanished altogether. The average virtual pay-TV subscriber paid about $15 more in aggregate than the average cable customer in 2017, based on M Science’s data.

That’s in part because customers can often get a better deal bundling two or three services from a cable provider, like TV, internet, and home phone service, than paying for internet alone. It’s marketed by cable operators as the double or triple play. “The cable companies will incentivize aggressively for bundling and penalize for unbundling,” said Corey Barrett, senior analyst for technology, media, and telecom at M Science. “They’ll have attractive rates for a double-play bundle and if you decide to go to broadband only, it’s going to cost more than broadband bundled with other services.”

The problem with this take is that while cable operators claim you're getting "savings" by bundling multiple services you may not even want (cable digital phone service, especially), these savings are often part of a temporary promotion. And when that promotion expires you're usually left paying a dramatically higher rate. While new customers tend to get offered promotions in order to get them to switch, existing customers who've been with the company for a while often have trouble getting a new, comparable promo when the contract expires.

In reality, ISPs like to artificially jack up the price of standalone broadband to make it as unpalatable as possible in the hopes of upselling you to additional services. That doesn't necessarily equate to saving money. The report is also likely relying on these companies' advertised prices, which isn't the actual price. Cable companies are facing all manner of lawsuits for using bogus fees to jack up the advertised rate post sale, a bit of creative marketing regulators from both parties have turned a blind eye to for decades. That's before you get to the broadband usage caps and overage fees used to punish cord cutters for leaving the cable walled garden.

Another tendency I've enjoyed observing in these reports is that they almost always ignore the fact that piracy exists and is aggressively common in the Plex and Kodi era. Countless consumers save money via piracy, but acknowledging this reality is seen by most news outlets and analysts as a tacit approval of it -- resulting in them comically omitting it from the discussion entirely. Because you don't approve of piracy doesn't change the fact that it routinely occurs as a cost-cutting measure among consumers. Piracy is, as Techdirt readers have long understood, something you have to compete with whether you like it or not. If you ignore it in your analysis of TV costs you're painting an incomplete picture.

All told, if you prefer a massive bundle of religious programming, horrible reality television, live sports and infomercials -- you may want to stick to paying an arm and a leg for cable. But if you spend even a small amount of time talking to those that have taken the leap and ditched traditional cable, you'll find absolutely no debate that cutting the traditional TV cord routinely saves you a significant chunk of change each and every month.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: cable tv, cord cutting, money, silos, streaming

46 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

aerinai (profile), 29 Jan 2018 @ 6:48am

Lets talk about fees...
So, if you have Comcast cable, you are paying anywhere from $8 to $16 for the privilege of having a cable box/DVR (more if you need a second receiver) to watch the content you paid for. So you can pay for an entire subscription of Netflix or HBO NOW for the same price. Local channels + Regional Sports, whether you like it or not, will cost anywhere from $8 - $12 as a below-the-line fee. That is almost another streaming service of your choice; again, for free. Want to watch anything in HD? Add $10 on top of that (at this point... really? but yeah... it is there).

So i'm not sure how $26-$38 in BASE FEES each month is cheaper than just streaming. HBO + Netflix + Hulu still come in cheaper! We haven't even talked about the ACTUAL CABLE BILL YET!
[ link to this | view in chronology ]
Anonymous Coward, 29 Jan 2018 @ 7:04am

Once a month like clockwork, somebody in the tech press proudly decides to inform their readers that you can't save any money by cutting the traditional TV cord and going with cheaper, more flexible streaming alternatives.

Oh boy, are they in for a surprise when the current generation s of kids set up home, as they often rely on the free sources, Like YouTube for their entertainment, education, and social networking.
[ link to this | view in chronology ]
- JoeCool (profile), 29 Jan 2018 @ 7:37am
  
  Re:
  Hence the NEED to get rid of Net Neutrality. Then they can relegate those free services to the slow lane to "encourage" them to pay more for what used to be free.
  [ link to this | view in chronology ]
- PRMan, 29 Jan 2018 @ 4:28pm
  
  Re:
  Actually, we get a lot of young people on the cord cutters forum (cord nevers).
  
  They don't mind paying for good services without commercials. Streams are often junk and full of viruses and stuff. Paying a small amount is worth it.
  
  But they are never going to pay Comcast $200 a month.
  [ link to this | view in chronology ]
TheResidentSkeptic (profile), 29 Jan 2018 @ 7:20am

And they still miss the points we all try to make
*I* don't care if I pay less or MORE - *I* care that I pay for what I *WANT* to watch. I am consuming a LOT more entertainment via Amazon - I pay for a LOT of shows that are not in the core Amazon Prime package. I buy a LOT of movies (sometimes, just to learn if I want to buy the blu-ray for my collection).

Cable costs too much for stuff I do *NOT* want - and is still on a schedule that doesn't fit mine. And I don't have any hope that they will fix either of those core issues. ever.
[ link to this | view in chronology ]
- Anonymous Coward, 29 Jan 2018 @ 7:51am
  
  Re: And they still miss the points we all try to make
  > *I* don't care if I pay less or MORE - *I* care that I pay for what I *WANT* to watch.
  
  Exactly this. I've mostly cut the cable not because it's too expensive but because it's too inflexible. I don't think my bill has really dropped. I subscribe to MLB and NHL, Amazon Prime, Hulu, HBO, Netflix, MoviePass, and YouTube Red. I also buy stuff on iTunes if that's the only place I can get it.
  
  Cable isn't too expensive, it's too overloaded with commercials. I'd be happy to uncut my cord if they would sell me commercial-free cable TV.
  [ link to this | view in chronology ]
  - Geno0wl (profile), 29 Jan 2018 @ 7:59am
    
    Re: Re: And they still miss the points we all try to make
    
    Cable isn't too expensive, it's too overloaded with commercials. I'd be happy to uncut my cord if they would sell me commercial-free cable TV.
    
    Never ever EVER going to happen. Hell once we move more reliant on YT just wait for them to figure out a way to fully bypass Add-blockers and be just as bad as cable.
    [ link to this | view in chronology ]
    - Anonymous Coward, 29 Jan 2018 @ 9:07am
      
      Re: Re: Re: And they still miss the points we all try to make
      "Hell once we move more reliant on YT just wait for them to figure out a way to fully bypass Add-blockers and be just as bad as cable."
      
      Then, if/when YT reaches such a state then they will learn the very same lesson I was all too willing to teach the cable companies, and broadcast television/radio. That lesson being that they are expendable and I am not captive. If they do not offer the product or service that I want then they will not receive my money or attention. I absolutely loath commercials (or ads of any kind, really) and actively go out of my way to spare myself from exposure to them. If ad-free subscription is not an option then they clearly do not want my money badly enough and I will find alternate means of viewing the content I am interested in.
      [ link to this | view in chronology ]
      - Anonymous Coward, 29 Jan 2018 @ 9:26am
        
        Re: Re: Re: Re: And they still miss the points we all try to make
        Judging by what Google is doing with Chrome, they have received the message from addblock users that too many, pop up and autoplay adverts are bad for their business; as are those that chase people round the web based on their last product searches.
        [ link to this | view in chronology ]
      - misterkrappy, 29 Jan 2018 @ 9:44am
        
        Re: And they still miss the points we all try to make
        Subscribed to Hulu until the ad bombardment in the more popular shows got absurd. AcornTV turned out to a much better use of the former "Hulu bucks."
        [ link to this | view in chronology ]
        
        Anonymous Coward, 29 Jan 2018 @ 1:34pm
        
        Re: Re: And they still miss the points we all try to make
        We were on the Hulu tier with commercials for about 45 minutes before we upgraded to the ad-free tier. The only thing worse than a commercial interruption is having a two-commercial rotation.
        [ link to this | view in chronology ]
      - misterkrappy, 29 Jan 2018 @ 9:51am
        
        Re: And they still miss the points we all try to make
        Just wait 'til Elon gets his broadband satellites going and offers cap free isp service for $25/month.
        [ link to this | view in chronology ]
        
        Anonymous Coward, 29 Jan 2018 @ 10:03am
        
        Re: Re: And they still miss the points we all try to make
        Just wait until everybody in New York pile onto a service that can only support several thousand people in such a small geographic area. Such a system if build will fill in the rural areas that currently have little or no service, and also be better than mobile for the likes of truck drivers, but will not compete with copper, never mind fiber, in the cities and metropolitan areas.
        [ link to this | view in chronology ]
      - Anonymous Coward, 29 Jan 2018 @ 4:31pm
        
        Re: Re: Re: Re: And they still miss the points we all try to make
        Between poor programing, constant reruns, and these commercials on my dime, I made the decision to cut the cord long ago. I no longer own a tv and am not in the market for one. I go all day and never hear a commercial.
        
        When the exposure to these blaring, noise ridden, spots disappeared in my life, I noticed that I became far more sensitive to their intrusions. Today I can not stand a commercial and will go to great lengths to eliminate them or abandon sites that think their content is so precious they can't show it to you without the ads. I simply will no longer put up with them.
        [ link to this | view in chronology ]
    - Anonymous Coward, 29 Jan 2018 @ 1:36pm
      
      Re: Re: Re: And they still miss the points we all try to make
      I don't get what you mean. YouTube already has an ad-free version. You think they will stop?
      [ link to this | view in chronology ]
    - PRMan, 29 Jan 2018 @ 4:30pm
      
      Re: Re: Re: And they still miss the points we all try to make
      YouTube is adding ads after the show now. It's pretty annoying.
      
      But he has YouTube Red so he doesn't have to worry about that.
      [ link to this | view in chronology ]
- Toom1275 (profile), 29 Jan 2018 @ 9:46am
  
  Re: And they still miss the points we all try to make
  It's kind of like the music album rip-off - having to pay $15 for the one good song that's exclusive to it.
  [ link to this | view in chronology ]
  - JEDIDIAH, 29 Jan 2018 @ 12:59pm
    
    Re: And they still miss the points we all try to make
    > It's kind of like the music album rip-off - having to pay $15 for the one good song that's exclusive to it.
    
    This example always amuses me. Singles were always a thing until nearly the end of the physical media era.
    [ link to this | view in chronology ]
    - JoeCool (profile), 29 Jan 2018 @ 4:01pm
      
      Re: Re: And they still miss the points we all try to make
      While there were CD singles, they were not very commonplace, and rarely every covered the singles I wanted. The labels KNEW which groups had one-hit-wonders, and NEVER made singles for those groups to force people to buy the whole album to get that one hit.
      [ link to this | view in chronology ]
Iggy, 29 Jan 2018 @ 7:36am

The Set Top Box fee is funny
While returning our STB for Verizon, I was asked if I had called to cancel service. I told the employee that we'd be sticking with the service, I was just returning the STB. Incredulously he asked how we would watch TV and I told him Verizon has an app. We finally cut the cord later when my wife realized we hadn't used the Fios app in months. Neither of us misses it.
[ link to this | view in chronology ]
Anonymous Coward, 29 Jan 2018 @ 7:56am

I've been a cord cutter for a number of years now and the savings are huge!!! I still consider myself a cord cutter even though I'm in a dumb bundle. It was cheaper to get the bundle then Internet only, which included basic TV channels. A Basic cable Box which has no monthly fees and either Showtime or HBO. Well, I still don't have that cable box hooked up so I don't watch TV that way. I rarely watch HBO using the app. I'm still getting most of my TV using an Antenna and recording using a Tivo.

HULU? No thanks! To me, it's a crap service. Netflix I had before I had cut the cord. So not really a new cost.
I do have Home Phone Service but through OOMA. Which is a fraction of the cost than Comcast. It would be even cheaper for me, but I'm getting 2 Home phone numbers using it so I have to pay for their Premium service.
[ link to this | view in chronology ]
- Anonymous Coward, 29 Jan 2018 @ 8:58am
  
  Re:
  
  > A Basic cable Box which has no monthly fees and either Showtime or HBO. Well, I still don't have that cable box hooked up so I don't watch TV that way.
  
  They swore up and down that that was the case when I cut the cord. They swore that the cost of basic cable was free, and that I wouldn't see any more than what the cost of internet was ($99/mo at the time). When I got my bill, it was nearly $200. The broadcast fees, rebroadcast fees, FCC fees (?), and the various other below the belt fees added nearly $100 to the bill. When I called them up, they offered me basic basic cable, which was just the local broadcast channels, and the price dropped $30 (was still paying more than $150.) Finally, when I managed to get them to drop everything but internet, the cost dropped to $99 and all the stupid fees went away.
  
  Of course, internet is now up to $120/mo, and I suspect it will keep going up.
  [ link to this | view in chronology ]
- Anonymous Coward, 29 Jan 2018 @ 11:06am
  
  Re:
  Had cable package and wanted dumped cable. Rep said it would be cheaper on my bill if I kept cable. He removed everything and the bill came to only $90. I was not satisfied. I asked what I still had listed for services and had him remove the basic cable and any rental equipment and got it down to $70. I had my own cable modem. So maybe there are some places that the bundle is cheaper but I think they hit you with other fees to make up for it.
  [ link to this | view in chronology ]
- PRMan, 29 Jan 2018 @ 4:33pm
  
  Re:
  They may say that there are no savings, but I saved over $1000 last year, not including another $200+ on moving my internet from Time Warner to Earthlink before Spectrum took over (same exact service, just cheaper).
  [ link to this | view in chronology ]
firebird2110 (profile), 29 Jan 2018 @ 8:04am

Another thing they ignore is that some streaming services provide content that cable/satellite operators don't. We dumped Sky some time ago and between everyone in the house now shell out for Netflix, Amazon Prime, Crunchyroll and Viki. The last two are entirely to feed my daughter's animé and South Korean drama fixations and provide content that no cable/satellite contract would, so you have to ignore those for a fair comparison. Even pretending that basic Sky costs £20 per month (it is to laugh!) we're saving £8.
[ link to this | view in chronology ]
- DannyB (profile), 29 Jan 2018 @ 9:04am
  
  Re:
  The converse is also true.
  
  I can AVOID paying for offensive content that cable / satellite providers cram down my throat.
  
  Specifically: sports
  [ link to this | view in chronology ]
  - PRMan, 29 Jan 2018 @ 4:34pm
    
    Re: Re:
    You should get Philo. It's a sports-free streaming service.
    [ link to this | view in chronology ]
- Anonymous Coward, 29 Jan 2018 @ 9:39am
  
  Re:
  I'm an Amazon Prime customer. I'm not a customer because I want streaming TV and movies, I'm a customer because I ship/receive a bunch of stuff, so it's cheaper to pay a once-per-year fee than all the shipping fees.
  
  With this, I get streaming music, TV and movies. If I desperately need to watch something not available through these methods, I can always record an OTA broadcast (since going digital, OTA is on par or better quality than what Cable provides).
  
  So why would I want to duplicate this by subscribing to cable? Because a particular channel has a particular show me and my friends watch? Well then why not go to the CHANNEL's site and stream it for free?
  
  Cable provides zero benefit today, and yet charges over $1200/year for the privilege. Compare that to Amazon, who provides more service for only $100.
  [ link to this | view in chronology ]
  - PRMan, 29 Jan 2018 @ 4:36pm
    
    Re: Re:
    And for $1100, you can buy quite a few series on Amazon (≈22) if there was no other way.
    [ link to this | view in chronology ]
Anonymous Coward, 29 Jan 2018 @ 8:10am

Richard Bennett with another tongue-clucking report in 3, 2, 1...
[ link to this | view in chronology ]
Anonymous Coward, 29 Jan 2018 @ 9:10am

I kinda feel like the odd man out with a lot of these discussions. My internet (only) bill with the cable company runs about $40/month for 100mbit service with a 1TB cap - obviously not happy about the cap. It's a reasonable price compared to where I've lived in other areas of the US. And that's without a contract.

Add a $11/mnth subscription for Netflix and I'm still saving roughly $50-120/mnth over cable TV once you're over (or even with) those stupid "promotion deals" that the company keeps sending me flyers for. They bury in the fine print that the actual price doubles or triples the second year, which you're stuck with as it's a contract. I use an OTA antenna for the local channels - which is more than just the big 3 here.

I guess this is one of those uncommon markets where there's much more than the basic networks OTA. CW, three "nostalgia" type channels, PBS, some local low power stuff, and HSN (seriously... HSN has an OTA channel here). It probably makes "cord cutting" more of a sweet deal than completely rural areas with only a couple or just one useful station, like where I grew up.
[ link to this | view in chronology ]
- Machin Shin, 29 Jan 2018 @ 9:37am
  
  Re:
  I think a big part of the problem with OTA is that many younger people don't seem to know it exist.
  
  I grew up out in the country where the cable company STILL refuses to run cable. Really insulting part is they will send junk mail to you but then when you call they tell you they don't offer service there. So WTF did you send me your junk mail!!! Dumb @#$%@
  
  That rant aside though, many people now have grown up watching cable and satellite. They don't even realize you can just use a cheap antenna and get several channels even way out in the country I can get 6 or 7 channels free. (Although I still very rarely turn on a tv station. I just stream movies from different online services)
  [ link to this | view in chronology ]
  - Anonymous Coward, 29 Jan 2018 @ 9:48am
    
    Re: Re:
    
    I think a big part of the problem with OTA is that many younger people don't seem to know it exist.
    
    An even bigger problem is that they have gotten used to watching on their schedule, and not the schedule of the TV/Cable providers.
    [ link to this | view in chronology ]
  - Anonymous Coward, 30 Jan 2018 @ 1:26pm
    
    Re: Re:
    We got an antenna for the TV my daughter has in her room and it's fantastic. She gets 30 channels and they are crystal clear.
    
    She never uses it because the commercials are annoying. I think that and the on-demand nature of internet services make them far, far more attractive than OTA tv.
    [ link to this | view in chronology ]
    - Anonymous Coward, 30 Jan 2018 @ 2:24pm
      
      Re: Re: Re:
      The on demand aspect is the killer feature of online videos, no more worrying about interruptions, or delays in getting home, because she can watch on her schedule.
      [ link to this | view in chronology ]
Chris ODonnell (profile), 29 Jan 2018 @ 10:30am

We were paying $120 a month for cable / Internet with FIOS before we moved. With the move, we have Internet only FIOS for $40/mo, and Hulu Live for $40 a month. In what universe is $80/month not less than $120 a month?

I also have Netflix and MLB, but I had those with cable too so it's a wash.

And the only reason we have Hulu Live is its the only service with the Big 10 Network for me and HGTV for my wife. Once college basketball season is over I could downgrade to Sling for $20 a month for the summer. But I probably won't as my wife not getting mad about another change is worth $20 a month.
[ link to this | view in chronology ]
G Larry, 29 Jan 2018 @ 12:09pm

What about people outside OTA markets?
If the closest OTA market is 70+ miles away, how can a cord cutter get "local" news/weather and broadcast programming? Investing in decent antenna hardware of this caliber is expensive and subject to loss/damage. Network streaming doesn't offer any type of "local" TV news/weather/sports. So (at least for me) that leaves satellite or the single cable provider. Any money saving advice out there?
[ link to this | view in chronology ]
- Anonymous Coward, 29 Jan 2018 @ 1:31pm
  
  Re: What about people outside OTA markets?
  
  If the closest OTA market is 70+ miles away, how can a cord cutter get "local" news/weather and broadcast programming?
  
  What is this OTA news you speak of?
  
  Internet access to a local news station usually allows you to stream their broadcasts, certainly for news (a lot less capability to stream other programming.) At least in my neck of the woods I've not turned on a TV that uses OTA in three years...but even with a decent internal whole house antenna I can get signals from between 60-80 miles away. Some don't come in well, but others come in perfectly. Depends on the number of mountains I have in the way between the broadcast antenna and my house. I can pick up stations at 200 miles too, but these tend to be across the border where broadcast antenna power levels are lax.
  [ link to this | view in chronology ]
  - PRMan, 29 Jan 2018 @ 4:39pm
    
    Re: Re: What about people outside OTA markets?
    I'm on the back side of a mountain between me and the tower, so I'll never get signal (my city was one of the first CATV setups in the country because of this).
    
    Not everyone can get antenna, but with Hulu and CBS I could see everything anyway for $15 a month. And CW is free with ads.
    [ link to this | view in chronology ]
- JoeCool (profile), 29 Jan 2018 @ 4:21pm
  
  Re: What about people outside OTA markets?
  Most local newspapers and TV stations also have websites. I've yet to see a paywall on them, but they do offer "subscribers" extra features.
  [ link to this | view in chronology ]
ECA (profile), 29 Jan 2018 @ 1:51pm

aS LONG AS...
As long as you PAY for--
Cellphones,
Internet,
Satellite?
They just SHIFT the charges from 1 to the others...
All the Current Corps are living Off of INSTALLED SERVICES..
They DIDNT BUILD IT, and HARDLY Maintain it..But STILL CHARGE FOR IT.
[ link to this | view in chronology ]
Anonymous Coward, 29 Jan 2018 @ 1:53pm

Flawed Methodology
The number of channels are irrelevant. Shows are the relevant quantity of measure and comparison. The ability to start them and stop them and resume them on your own schedule is a feature that should not be overlooked.

Traditional TV means trying to search through choices most of which are poor. Hoping to beat the odds and find a great one just as it is about to start. It is a terrible experience when compared to on demand streaming.
[ link to this | view in chronology ]
PRMan, 29 Jan 2018 @ 4:37pm

Religious channels
Even if you like the religious channels, they are all available on Roku for free. And thousands more.
[ link to this | view in chronology ]
TimK (profile), 30 Jan 2018 @ 10:01am

We recently "thinned" our cord. We were paying $180/mo for phone, internet, 3 TV's with a mid tier package, no premiums, and DVR. We bought two Rokus for $100, went internet only for $40 and PS Vue for $45. We lost 2 channels we watch, one of which I can stream online.

So $95/ month is not saving money????
[ link to this | view in chronology ]
Wyrm (profile), 30 Jan 2018 @ 10:48am

> When paired with the cost customers continued to pay their cable providers for things like internet, phone, or additional TV packages, the savings vanished altogether.

So, basically, cord-cutters who don't actually cut the cord don't save money. Big discovery here.

Instead, please tell us more about the large number of cord-cutters who do *not* resubscribe to your overpriced and useless bundles.
[ link to this | view in chronology ]
Triple-M, 1 Feb 2018 @ 5:12am

I call BS.

I live in South Africa and even here I can get ALMOST EVERYTHING in terms of television shows for $16.41.

HBO, ABC, Netflix, you name it.
[ link to this | view in chronology ]