The era of traditional TV has changed drastically in the last 10 years. Due to rising costs in pay TV, many people have switched to over-the-top live streaming services and cancelled their cable or satellite. The process of cancelling traditional cable or satellite service is called “cutting the cord.” In 2018, there were 33 million Americans who cut the cord. In 2021, data scientists predict that there could be over 50 million cord-cutters in the US and by 2022, 55.1% of Americans are predicted to have cut the cord. The trend of cancelling cable or satellite to pay for internet and specific entertainment content is a very appealing option considering how expensive pay tv packages have gotten. That said, data caps, rising network programming fees and multiple streaming options make this decision more complicated than many realize.
With over-the-top services like Netflix, Hulu and Amazon Prime, cord-cutters can still watch their favorite shows, movies, original series and much more at their convenience. One thing many streamers likely didn’t plan on watching, though, was their data usage. Opting to solely stream your TV content can use a lot of data and very quickly. In addition to that, many internet providers limit monthly data usage by capping it at 1 TB or lower and they charge additional fees and lower speeds when you go over the allotted amount. Many consumers do go over their data limit from not only streaming TV but also social media, gaming, cameras and work all done with the internet. “12% of cord cutters exceed the 1 TB of data a month”, for these people, the overage fees and frustration of slow internet are enough to keep a cable subscription and remain just as cost effective.
In 2017, 87% of users cut the cord because they found the cable/satellite services to be too expensive. Their goal is to save money however, many on-demand streaming services like Netflix, Disney+ and YouTube TV and more are starting to charge more annually due to the rising cost of programming from media companies. These are the same problems that cable companies faced which led to the high prices that encouraged so much cord-cutting in the first place. Streaming services are negotiating with the same media companies that own the channels, and if they’re needing to pay what it takes to get the channels, that cost is often being passed along to the customers. “Rising prices mean you are likely going to pay about $50 or more for a service to stream live TV including the most popular channels such as Fox News, MSNBC, CNN and ESPN.” So do you really save by opting to cut the cord? Some say it’s based on your desired TV watching habits and which streaming services you select.
Cord cutters that are looking to replicate what they get from a traditional pay TV company discover that after they assemble the complicated patchwork of devices and streaming services they wind up shelling out the same amount or even more money than they did with their old pay-TV provider. With more than 130 streaming services, several different sticks and boxes such as the Roku streaming stick and Google’s Chromecast and cloud DVRs, there’s no shortage of products tailored to a la carte viewing. A la carte viewing is necessary for many viewers whose favorite programs aren’t covered by just one single streaming provider, for them the costs can quickly mount. The average cable subscription bill is nearly $110 per month. Hypothetically, if a cord cutter pays the average rate for an Internet-only package ($52.29 per month) and subscribes to Hulu’s live-TV service ($39.99 per month) and YouTube Red ($9.99 per month), they’ll pay $102.27 — saving 7.73 cents per month compared with the average pay-TV bundle. Throw in Amazon Prime Video ($8.99 per month) or any streaming sports service and cord cutting becomes the costlier alternative.
Cost doesn’t matter for some cord-cutting consumers want maximum choice and availability, and care more about convenience than price. But for those who cut the cord to actually save money, switching from one special offer to another, canceling services when their favorite series ends, and working the angles to watch as much as they can for as little as possible becomes second nature. They create strategies around when to subscribe based on season premieres and new channel launches but it requires a lot of sacrifice. There’s no guarantee that any one service will provide all the networks your family wants to watch so many consumers still end up subscribing to many services at time. 22% of U.S. homes with internet service subscribe to 4 or more streaming services. That said, some cord-cutters succeed at finding a compromise between savings and entertainment. With a little research and diligence, it is possible for some people to cut the cord without defeating the purpose they just have to monitor their costs closely and be prepared to make hard decisions. For others, it’s a never ending costly cycle.
- “What Behavioral Data Tells Us About the OTT Viewing Habits of Cord-Cutters” https://www.comscore.com/ita/Public-Relations/Blog/What-Behavioral-Data-Tells-Us-About-the-OTT-Viewing-Habits-of-Cord-Cutters
- Dwight Silverman. Thinking Of Cord Cutting? Check Your Pandemic Data Usage First https://www.forbes.com/sites/splunk/2021/04/01/five-forces-are-building-the-next-data-wave/?sh=27dde0134c68
- Mike Snider. “Cutting the cord: As prices go up, here’s how you can still save money” streaming https://www.usatoday.com/story/tech/2020/01/10/does-cutting-cord-streaming-tv-really-save-money/2843052001/
- Image https://decisiondata.org/news/comcast-loses-two-more-cable-tv-customers-every-minute/
- Gif https://www.seattletimes.com/business/technology/cutting-the-cord-streaming-instead-of-cable-tv-means-complicated-choices-and-some-trade-offs/