More About the Cord-Cutting Scam

July 8th, 2015

As some of you know, I’ve been a customer of cable TV since the 1970s. Yes, the 1970s (cable actually dates back to 1940), when it was all about delivering decent signals from far-away stations in small towns. Things didn’t begin to change until the FCC mandated that cable systems deliver original programming. In fact, I became host of a weekly press conference, a local variation of “Meet the Press,” at a cable station near Philadelphia. But I stupidly failed to follow up on an invitation from a Philadelphia TV executive to drop in and talk, and so I never made the transition from radio.

Or maybe that benefits the viewers somehow.

In any case, cable and satellite companies these days are finding it difficult to land new customers. More often than not, it’s about stealing customers from other services, and they all have special offers to make the move, although it usually involves a temporary discount if you agree to a 12-month or 24-month deal.

So we have so-called cord cutting, which means that customers quit cable and fend for themselves. Instead of having the comfort of a single coax cable and a set-top box to receive TV, you use several cables or a box that lets you access a bunch of services, such as an Apple TV or Roku. More and more TV sets advertise a “smart” capability, meaning they have apps that can access some of these extra services.

It can get real complicated when you want to save money.

One of the original cord-cutting services was Netflix, which was once merely a supplier of rented DVDs that, in fact, largely killed physical video rental stores in the U.S. But management was inspired to set up a streaming service that had, at first, mostly old TV shows and “B” movies, with a rare gem. It was a matter of the entertainment companies holding out for more money from traditional cable and satellite systems after DVD and Pay-Per-View dried up.

Netflix broke through by encouraging binge viewing of existing fare and producing original programming, such as “House of Cards,” and “Orange is the New Black.” More recently Netflix has added “Daredevil,” a dark reimagining of the Marvel comic book character, to the mix, and even brought back AMC’s “The Killing” for a short final season, and is resurrecting another cancelled TV series, “Longmire.”

But Netflix is mostly a supplement, not a replacement, for traditional TV services. So if you are cable-less, you might want to add Hulu Plus, which offers network programming, with limited ads, for a modest monthly fee. You can a;sp rent movies from iTunes and a handful of other services, and if you want broadcast TV, you get an antenna. Of course, if you’re too far from most local stations, you’re back to cable, and isn’t that how it all began?

The industry is aware of how things have changed, so even premium services, such as HBO and Showtime, are now into streaming; Showtime’s channel just premiered for a free 30-day trial on Apple TV. Dish Network’s Sling TV gives you a subset of the usual cable/satellite channel lineup, and there are multiple tiers for extra channels with the promise of one that will deliver local TV.

But if you hope to save money, be careful. Netflix is $8.99 per month for the “Gold” plan that provides HD for two screens. HBO NOW is $14.99 per month, and Showtime will be $10.99 after the initial trial period. Add to that $20 per month and up for Sling TV, Hulu Plus at $7.99 per month (plus Showtime for an extra $8.99 so you can avoid the standalone version), and it begins to add up.

And don’t forget your ISP’s bandwidth limits. It’s normally in the 250GB to 400GB range (Cox recently increased theirs to 2TB for higher tiers in several markets), so if you have a regular diet of streaming high definition video, expect to use it all up within days. There is no free ride, and you might be left paying an extra fee for exceeding your bandwidth allocation, or suffering from throttled service or no service if you’re a repeat offender.

If you’re annoyed at the interfaces provided by cable/satellite — and they are getting better though not quite at the TiVO level yet — imagine having to deal with several interfaces as you switch among services to find something to watch. The price of a lower monthly bill — assuming you don’t get carried away with the extra streaming services — is clutter.

Add to this the rumor that Apple is poised to introduce a streaming TV service, perhaps with a new Apple TV, in the near future. It depends on reaching deals with the entertainment companies, or maybe the cable companies too if Apple TV will be used as a cable/satellite front-end. A lot appears to be up in the air, but that would mean yet another interface and monthly payment to consider.

Apple clearly wants to have it all. So they’d likely want to pack as much content into a single service as possible, so you shouldn’t need anything extra. Well, except to sign up with Amazon Instant Video and Netflix for extra fare, unless Apple can steal away some of the programming. So don’t count Apple out.

As it is, I find the cable/satellite option more convenient, but it’s very easy to get carried away with the costly extras. The clever programing people will often spread channels willy nilly over different tiers to force you to buy more than you need to get the five or 10 channels you really want. Maybe cord cutting will persuade them to simplify the offerings, allow for more a la carte selections, and make it possible to stay with one service and still keep within a tight budget. That’s where competition makes sense, although, aside from Sling TV, I haven’t seen much improvement yet.

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15 Responses to “More About the Cord-Cutting Scam”

  1. Drew Costen says:

    I’m in Canada, so we don’t get Hulu, and Netflix is a lot more limited (although we do get original shows like Daredevil, and some shows like The 100 air almost live). Instead, I buy seasons passes for all my shows that aren’t on Netflix through iTunes and watch them on my Apple TV.

    Sure, in the long run it comes out to be more expensive, but this is about freedom to watch what I want when I want without commercials or having to program a DVR. Plus, it means I can watch them on all my Apple devices anywhere, which is great for traveling.

    • @Drew Costen, In the long run, a seasons pass is a lot more expensive if you watch a few different shows each day. Is that an advantage? Well, programming a DVR is not hard, and most allow you to schedule a full season, though some have glitches. And there’s the fast forward button. 🙂


  2. Drew Costen says:

    I have about 60 shows in my list of shows that I follow (although a number of them are on Netflix), so it’s definitely more expensive. But that doesn’t matter. Convenience and control are far more important to me than cost. 🙂

  3. Drew Costen says:

    True, but for me, cord cutting has never been about the cost. It’s always been about how much I dislike the traditional methods of getting television shows delivered to me. I want to watch TV on my terms, the same way I get my music and books and news and such.

  4. Drew Costen says:

    Yeah. I used to use the various iPad apps from my local channels to watch shows myself, but the ads became too much for me, which is why I switched to this iTunes-based method.

    Anyway, it might not be for everyone, since I know most people do need to worry about the cost (although most people also don’t watch as many shows as I do), but it works for me. 🙂

  5. DJ says:

    @Drew Just curious — have you ever tried TiVo? TiVo’s UI and responsiveness are what keep me a cable customer (ironic, since the cable companies don’t exactly embrace TiVo). It’s true with AppleTV you don’t have to fast forward commercials, but I find if I want to skip back to catch a line of dialogue I missed, or fast forward to a specific point, TiVo’s interface is way, way better. It’s painful to use a Blu-Ray or even AppleTV in comparison.

    Not affiliated with TiVo btw. Just really happy with their product (less so with their billing department).

  6. tech-52 says:

    Still, I think the cable companies are feeling the pinch of losing subscribers. I called my cable provider (Charter) recently to see if I could save money by dropping HBO and Showtime, and instead subscribing to the streaming versions. Not even close. I have the silver package, so would only save $10, plus I’d lose Cinemax, which is part of the HBO package. The rep asked me what I was trying to achieve, and I said significantly reduce my monthly cost, which was $160 including TV, Internet, and phone. Because of my longevity as a “valued customer”, she said I was eligible for a reduced monthly rate of $120. By dropping the phone option, I saved another $20 bucks. So I’m down to $100 a month, which is manageable, and certainly less than I’d pay by adding all the streaming services and keeping Internet only from Charter. Not to mention, I still get live sports and local channels all in HD. It’s a decent deal. The streaming services are making the cable providers nervous, though. Clearly. The good news is that consumers will benefit.

  7. doug says:

    Ok, put your TV viewing where your mouth is, because traditional Cable services are a total ripoff.

    I’ll start with a price point and you can refute it. For simplicity I will say that to access a standard package of shows on Cox or DirectTV in HD with a DVR on 2 sets you are going to be paying $100/month (out side of some sort of special introductory offer). When I canceled DirectTV over 5 years ago, my actual bill was $89/month and I had spent $299 to lease an HD DVR.

    We subscribe to Netflix and we were watching around 24 new season shows per year. At the time the cost for most season passes was around 20. That has increased to around $30 over the years. That is 24*30 or about $720. Even if we go for the high water mark for season passes $40 we still end up at $960/year. Now we noticed that occasionally we find a new series we like on netflix now and again so our actual number of shows is maybe closer to 30 or a high end cost of $1200/year. Your milage may very.

    Lets compare that to my DirectTV experience. $90/month by 12 month or $1080/year. So on the outside we are talking about spending $10/month + $8 for netflix. But in reality, with season pass discounts we will end up about the same place. Also, I personally purchase everything on iTunes with discounted gift cards. %20 is the norm so that brings my bill down to a high of just under $1000.

    So, I’m not saving a bunch of hard dollars. But what else do I get.

    1) No commercials!! This may not be hard dollars but watching commercials was how we paid for TV in the past. Now people discount it as “free”. But it saves me time and the annoyance and say what you will about fast forward, but it is not nearly as nice as commercial free.

    2) I own my content. I now have full seasons of Burn Notice, Chuck, CSI, Law and Order, etc….. And I never have to pay for them again!! After 5 years we are talking about 150 seasons or about 3000 episodes.

    3) Playable offline on Mac, PC, and iOS devices. My shows when and where I want.

    So tell me, with numbers about the scam that is cord cutting.

    • @doug, I appreciate your point of view, and a lot of it depends on how many shows you watch. If you can stick with Netflix, use an antenna for local stations, and buy a few season passes, you will save loads of money. But when you begin to add services, particularly HBO and Showtime, along with a baseline streaming service, in the fashion of Sling TV, it will quickly add up and you may find yourself not really saving that much money after all.

      A lot of people aren’t interested in appointment TV nowadays, or in many of the shows being offered. If that’s your preference, you have alternatives. But be careful how many alternatives you order up, because they will eat into your savings.

      And don’t forget the possibility of using up your ISP’s bandwidth cap.


  8. doug says:

    Can’t the same be said for traditional cable? HBO isn’t free on cable ether. So maybe we can all agree that extras are extras and get back to the core of the cable TV scam and the first thing to know about it is you pay for your TV twice. First you pay to get it delivered and then you pay by watching Ad’s.

    I wanted you to put numbers up to make the counter point. I didn’t offer a couple season passes I offered up what amounts to 30 seasons @ 20 episodes per season or 600 shows!! If we equate this to traditional cable which offers new season shows 5 days a week about 40 weeks out of the year. We are talking about 3 shows per day of new season shows. This doesn’t include the 3-4 new season shows netflix offers. Nor does it include other ways of viewing new season content for “free” via things like the ABC app.

    People keep talking about this dream of TV on demand and they don’t realize that it is hear. People are looking to eliminate commercials, even if it means paying more for TV and they are so taken by the true scam that is cable TV that they refuse to see the option that is already on the table.

    NOTE!!!! FairPlay allows up to 5 computers (not necessarily in the same home) and multiple iOS devices to all have access to this content legally. So it is totally reasonable to have families share many of these purchased TV seasons and ether further reduce the over all cost or substantially increase the shows available.

    Your turn to make your point.

  9. Drew Costen says:

    DJ, I have not tried TiVo. At this point, I’m very happy with the iTunes season passes (along with Netflix), and have no interest in returning to cable, honestly.

  10. fg says:

    Cord cutting is not a scam , you make it sound as if everyone is completely braindead . I have had cox cable for years I ditched it We use a OTA atenna with amplified booster gives crystal clear channels upto 450 mile range most towers are within 150 miles , These newer modern antenna work very well and we get 35 channels for free , without cox selling me 200 channels just so i can watch 4 or 5 . Don’t have a use for hulu we watch all new shows as they air . netflix is fine for what we need to waste time .

    Cable tv is the scam as google fiber speads it will ether force these other companies to get in line or close , I have family already on goole fiber in several cities they get 1000 Mbs steady up & down “NO DATA CAP”
    They are 100% “UNLIMITED DATA” no throttling no slow downs , cox and at&t and concast no other ISP can offer this currently with their GREED and control of their local markets .

    • @fg, I guess you haven’t read the article. Besides, OTA doesn’t offer the selection of cable or the alternatives. Tell me the last time you watched “House of Cards” on OTA. Oh, yes, it’s not available.


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