More Cord Cutting Nonsense

May 8th, 2015

At a time where your cable or satellite bill may be north of $100, way north, the possibility of saving lots of money by cutting the cord may seem incredibly attractive. It does make sense in theory, but as a practical matter, it has its complications.

Unfortunately, stories about the process seldom bother to cover the gotchas. But I’ll make up for their lapses.

Let’s start from scratch. The theory goes that millennials don’t have the extra cash to buy a full-blown TV package, so they find ways to cut corners. So start with Netflix, add Hulu Plus, plus an antenna for local stations, and they have a decent TV package. Such streamers as Apple TV include those basic streaming channels and more, including sports and news, and the cable and satellite companies are wondering where the customers are going. Growth has stalled to a snail’s pace.

The existing cable/satellite providers have clearly priced themselves out of the market for many subscribers. When fees for content go up, they are passed on to you. Maybe you can re-up your subscription with a new one-year or two-year agreement and receive some temporary discounts, but they expire in a staggered fashion, and you may end up back where you started with a year left on that contract.

One of the problems is that they stick you with large and larger packages of channels. You cannot just order the 10 or 20 you really watch, because they might be stuck in different tiers. And I haven’t even started with premium channels, such as HBO and Showtime.

To get a piece of the cord-cutting action, Dish Network has brought into play Sling TV, a $20-a-month service consisting of a subset of channels that’s streamed online. You get a smattering of choices, including some sports, plus extra cost options — or tiers — if you’re not satisfied with the core collection. But not broadcast, at least not yet.

Sure, an antenna might suit, but what if you live a little bit too far from local stations to get decent reception. Indeed, that’s what brought about cable in the first place, where a company would set up a central antenna system (later buttressed with satellite dishes) to receive stations from far-away places and distribute them via a network of cables to customers.

In a CNET report, Dish’s Chief Executive Roger Lynch is quoted as saying that they plan to add broadcast networks “in a tier,” meaning as another extra cost option. But I think you can see where I’m going. Add a few tiers, and maybe a premium channel or two, and suddenly the monthly price isn’t altogether different from a standard cable/satellite package.

Add to that the elephant in the room, your broadband ISP’s bandwidth limits, and you can see where complications are in store.

Now wasn’t Sling TV supposed to be the cheaper alternative? What about a basic satellite package, where you don’t have to worry about Internet bandwidth? Dish’s America’s Top 120 costs $29.99 per month for the first year. All right, you have to pay $59.99 per month the second and subsequent years, but you get free HD and a free DVR. Consider that when you begin to add a few frills to Sling TV, the price difference will be far less. Bait and switch?

If you can live without the constant presence of the tube in your life, though, you’re apt to find a small number of services that aren’t expensive and offer what you need, or can live with. But things can quickly get out of hand if you start adding standalone services still believing that you’re somehow saving money over the traditional offerings.

So don’t get carried away.

Now I can see where the cable and satellite companies are coming from. Pushing slimmed down cloud-based packages, though, is just an alternative to so-called basic cable, and I fail to see how it serves the customer any better.

One way to better serve customers on a budget would be to offer a la carte programming. Choose one from Column A, two from Column C, and build a custom package that meets your needs, and only pay for what you want to watch. However, this sort of unbundling scheme should be priced in proportion to the stations you want, compared to the standard 100-400 channels they offer now. Unfortunately, existing content deals may include channels licensed to the cable/satellite systems as a bundle, which may complicate single channel offerings.

From a practical standpoint, a la carte may work fine for most of you. With the present structure of hundreds of choices, however, you may discover a new channel with great content simply by channel switching. But if that channel isn’t on your programming list, you’ll never see it, and that might work against the success of newer offerings in search of an audience. But throwing channels in different service levels, seemingly at random, doesn’t help either. You may have to order higher-priced tiers just to get a particular channel. DirecTV does that, for example, with Cloo, a channel that runs mostly repeats of popular crime procedurals. You can’t get it with the basic package.

As I write this, there are still those rumors that Apple is close to starting their own TV subscription service. The question is how Apple can make a difference and stand out from among the cable/satellite and free-standing channel clutter. How can they get you a decent selection of content at a lower price, without pushing you past your ISP’s bandwidth cap?

Unfortunately that raises questions that are seldom covered by the press.

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One Response to “More Cord Cutting Nonsense”

  1. Matthew says:

    ISPs shouldn’t have a data cap. That’s solution #1. The supposed (aka baloney) reason for data caps is to preserve data speed for all customers. However, a data cap doesn’t do that at all. Congestion happens at certain moments, not over time. A data cap does nothing to prevent network congestion. Throttling the heaviest users *at times of heavy usage* is probably a very fair way to “cap” somebody when things get congested. However, that’s not how it’s being done. It’s purely a money grab the way it’s being done right now.

    What also isn’t mentioned here is that a lot of people get fed up and just use sites such as Popcorn Time or plain old bit torrents.

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