The Real Cost of Cutting the Cord
Are you thinking about cutting the cord on cable and going the streaming route? Have you considered what equipment you’ll need to buy? How many TV’s do you have that you want to watch TV on? How many of those TV’s need an antenna for local stations? Lastly, since you still need internet, did you know your provider will charge you more than the bundled price for internet? Let’s do some calculations to see the ‘real’ cost of cutting the cord! We will determine if, in the short run, and long run, is it cheaper to cut the cord or stay with your current provider?
Did you know the average U.S. home has about 3 TV’s? We will make the assumption that every household has 3 TV’s to get the ‘real’ cost. The top streaming providers are PlayStation Vue and SlingTV. Both of these provide content via their apps, which can be downloaded on multiple devices, such as tablets, smartphones, AppleTV, Amazon Fire TV, and Amazon Fire Stick. Let’s also assume no one wants to watch their favorite shows on a tablet or cell phone when they have a big screen TV in front of them. That leaves AppleTV ($149.99), Amazon Fire TV ($89.99) and Amazon Fire Stick ($39.99). To go the cheap route, for my 3 TV’s, I am going to buy two Amazon Fire TV’s ($179.98) and one Amazon Fire Stick for $219.97 (tax not included). The Amazon Fire Stick is not as quick as the Fire TV, so I am only buying one, instead of three, and putting it on my least watched TV (trust me on this one, the Fire Stick is too slow for your main TV and you’ll regret your decision).
I now need an antenna for my TV’s so I can watch local channels. You can buy one on Amazon (link here) for $17.99. You want one with decent range, so the signal is stronger and you can get more channels. Three antennas puts me at $53.97. My equipment total is now $273.94.
Now that I have all of my equipment, I am ready to select a streaming option. PlayStation Vue offers 70+ channels for $34.99/month. Based on the channels I would watch, this package fits me best (did you know it has local Fox Sports too?). Vue costs me $419.88/year.
Last item that we need is the internet! How can we forget that! Let’s use Spectrum in our example. Per their website (or better yet, use our website to compare internet prices, click here and say ‘I need new service’ and ‘I don’t want cable at all’), in my market, they offer 100 megs for roughly $44.99. That is $539.88/year.
My grand total, for one year, to cut the cord, is about $1,234. That comes out to about $103/month, which doesn’t sound too bad, but hang on!
I’m sure you’re saying by now that the equipment I bought (Amazon Fire TV’s and stick) is a one-time (sunk) cost. Yep, I agree. Let’s look at year 2 with that taken in to consideration.
Cable prices go up every year by 3–4% (outpacing inflation). So, my monthly totals are $34.99 for Vue and $44.99 for internet, which is about $80, or $960/year. Assuming these prices go up, say by 4%, you’re looking at $998/year or $83/month.
In conclusion, cutting the cord does make sense, especially if you’re in it for the long haul. What most people don’t realize is the upfront costs for the equipment to stream. But keep in mind, it will take you a little longer to watch TV, as you have to pull up an app. Next, good or bad, depending on you, you will have less channels as the streaming providers try and keep competitive with their prices. You also do get more with streaming too, as I now have more local channels, plus any Amazon content (movies, shows, music, etc.). So, with this information, what are you going to do?
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