Cutting the Cable Cord: What You Need to Know | Union Community Bank
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Is It Time to Cut Your Cable Cord?

A few years ago, if you wanted to save money by cutting the cable cord, that probably meant that you were deciding to go without any TV services at all. However, the rise of streaming services now provides you with the option to change your TV budget without necessarily sacrificing the ability to watch your favorite shows. Making the decision to stop purchasing cable services is one many Americans are considering. We’ll take a look at your options so you can figure out the option that’s right for you.

Want to learn how to budget like a pro? Check out this article on creating a personal budget.

Cable and Television: An Extremely Brief History

The first TV was designed by Philo Farnsworth in 1927. Television sets went on sale in 1939 for $600 with the first commercial broadcast being authorized two years later. By 1948, cable television originated to enhance poor reception in mountains or geographically remote areas. Fast forward to 1989, when the Cable act was established, deregulating cable services and helping them grow. They grew so much that by the end of the decade, over 53 million homes subscribed to cable.

At the end of 1999, over 65 million homes subscribed to cable. However, this was also the year that Netflix launched it’s subscription service that offered unlimited rentals for one monthly cost. The arrival of Netflix streaming in 2007 and the increased streaming capabilities of products like Roku and the Sony PlayStation began to dramatically change the way we watched television.

In 2013, a Nielsen study found that the number of American homes with television units has been dropping since 2011. It appeared that more people were beginning to watch videos on their phones, computers, and tablets. Thus, the trend of cord-cutting began.

How much is cable actually costing you?

Aside from the changing ways Americans are watching TV, the biggest motivating factor behind the cutting the cable trend is the price of cable services. According to the Leichtman Research Group, the average cable bill rose 39% from 2011 to 2015 — almost eight times the rate of inflation. The mean pay-TV package was roughly $103 per month and that number continues to rise.

You have Options

There is a good chance that you or someone you know is currently signed up for at least one streaming service. Sites like Netflix, Hulu, and Amazon Prime have been steadily on the rise over the past decade, with many millennials using it as their sole source of television programming. Their popularity has been closely tied to the popularity of smart phones and tablets. People like the ability to watch what you want, when you want, where you want.

Streaming sites have become so popular that companies like HBO, Showtime, and Starz now offer streaming only options for their shows and movies. TV networks have gotten into the streaming game as well, with some networks like the CW having streaming services that let you watch current seasons of shows without needing cable access.

Different Streaming Services Include:

  • Netflix
  • Hulu
  • Amazon Video
  • Direct TV Now
  • Sling TV
  • PalyStation Vue
  • Showtime
  • YouTube TV

These services can be dramatically less expensive than paying for cable, however they can quickly add up in price if you subscribe to more than one. It’s also unlikely that they will keep lower prices indefinitely. Netflix has raised it’s price over the past few years and is likely to do so again within the next few. It’s important to keep an eye on this pricing as you continue to factor it into your budget.

How Important are Sports to You? 

If you’re not a sports lover, cable can really be costing you. A report by SNL Kagan recently reported that nearly $20 of your monthly cable bill is going towards paying for sports. That money is allocated to networks like ESPN and Fox Sports. Sports lovers have options available to them with services like DirectTV Now offering certain sporting events.

However, the downside is that streaming services rarely host regional sports networks which might be a problem for some local sports fans. This being said, examining the importance or sports programming should definitely be factored into your decision about cutting the cable cord. If you don’t watch sports regularly or at all, you might want to look into other television options. But if you’re a die hard fan, it might be a good idea to stick with cable.

So, is it Time for You to Say Goodbye to Cable?

The decision to cut cable is something only you can answer, but it’s important for you to continue to evaluate how you are consuming media and pay attention to the options that are available to you. This is one area of your monthly budget where being complacent can mean spending way more than you should be.

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