Thursday, January 29, 2015

CC102: Cord Cutting Motivations, Pros And Cons

Why do folks cut the cord? Is it because pay TV companies are second only to Congress as the most despised organization on earth? Or could it be the money?

It could be the former but let's spend a moment looking at the money. A report released in May 2014 by the FCC provides quite a bit of insight into the pay TV business, cable in particular. They examined the costs of three services levels, Basic, Extended and Next Most Popular over 18 years from 1995 to 2013. Over that period average cable bills rose by 107% compared to the CPI which increased by a smidgen over half that at 54%. If you look at the Extended package those prices rose by 188% over that period.

You would think we're discussing college costs and not how much we pay to see stuffed purple dinosaurs and skinny Dunwoody refugees.

It is perhaps worth noting that the number of channels available in each package has increased such that Extended packages now sport an average of 160 channels--of crap you probably do not want to watch. Which brings us the topic of what we watch vs what we pay.

ESPN is by far the most expensive channel in terms of cost to the service provider which is passed along to you, the sofa spud. It currently averages around $5.54 per subscriber. Compare that with Disney at around $1.15 per sub. Not really that surprising when you check out the etymology of "fan" and see that it is closely associated with "fanatic." And you might think that ESPN has more average total viewers than Disney. That would be wrong. ESPN garners 2.2 million whilst Disney gets 2.4 million. On average. Because of tiered services (fancy name for the packages) if you want to watch Disney you will also pay for ESPN even if you hate sports. It may come as no surprise that Disney owns ESPN.

So the factors favoring firing the cable company seem to center around money and when you consider the average cable bill is now around $78/month (almost $1000/yr) that pays for a few trips to the sports bar. You might also benefit from simply watching less TV. Perhaps your life would improve if you went out back and actually planted a tomato instead of watching someone else do it on the boob tube. You might also find that alternative media outlets deliver programming that is more to your liking and when delivered on your schedule may offer greater enjoyment while consuming less of the rest of your life.


But there are folks who would be absolutely miserable should they lose their favorite programming. Sports nuts top that list, though ESPN has a streaming service in beta with Sling and at a proposed monthly price of $20/month might be a win-win-win. But if you're really wrapped around AMC, with TV's top-rated drama, you might not have many options. Same for FoodTV, History Channel and HGTV. Similar programming is available from non-cable sources, some say it's better, some say different, but it certainly is not the same.

So if there is content you really, really must watch and you cannot wait for it to appear on DVD or streaming services cable is just the thing for you. Not yet anyway.

At the end of the day only you can determine if what you're paying for cable is worth what you're getting. One way to bring that into clearer focus is to keep a diary of what  you and others in your household watch. You already know what you're paying and with this you'll also know what you're getting.