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  • 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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