If you have ever considered ditching your cable bill, you are not alone. In the first quarter of this year, Comcast lost 121,000 pay-TV subscribers while AT&T lost 544,000 pay-TV customers. That means nearly 700,000 “cut the cord” in the first three months of 2019. Why are so many people ditching cable and how are these people consuming content?
Apparently, people don’t enjoy paying hundreds of dollars a month for cable packages packed with channels they do not watch and do not want. As part of the financial planning process, I regularly review where our clients are spending money and suggest ways they can cut unnecessary costs. For many, the cable bill is one of the largest of their monthly discretionary expenses and can easily total $3,000 a year (sometimes a lot more). So why do we continue to pay so much?
The most common answer is news and sports. Many clients are not willing to give up Fox News or MSNBC. The same is true of sports. Whether it is golf, tennis, football or any other sporting event, you have traditionally been forced to buy a large and expensive cable package just to get the few channels that broadcast these events. That has changed.
There are a number of streaming services that allow you watch live broadcasts on your TV, tablet, or phone. These include HULU, YouTube TV and Sling, to name a few. Additionally, there are services like Netflix, Amazon Prime and HBO Go that allow you to watch movies and TV shows on demand. Later this year Apple and Disney will launch their own streaming services. The cost for these platforms range somewhere between $5.00 and $50.00 a month, so the challenge is to identify what service is right for you.
First, consider what you watch the most. If it’s cable news or sports, you will need a service that streams those channels. For example, HULU and YouTube TV offer a collection of cable news channels and sports stations for less than $50 a month. Sling offers fewer channels but only cost $15 a month. If you do not need live TV, Netflix or Amazon allow you to stream shows for less than $10 a month. Admittedly, navigating the maze of offerings can be confusing and signing up for too many can result in paying more for these services than the cable bill you tried to leave behind. Luckily, there are no contracts when you sign up for these services and canceling is pretty painless.
If you are tired of paying thousands of dollars a year on cable, know that you have a choice. There are more options than ever before with even more services coming soon. If you have any questions regarding this or any other financial planning topic, do not hesitate to give me a call.