TV Options Still Limited … Change May Be Coming

Whenever the local cable company makes a change or raises monthly rates, many look at their monthly bill and ask if there is a less expensive alternative.  We hear about other people “cutting the cord” and opting for a combination of receiving local channels via an antenna and using one of the many internet-based streaming services for the other channels.  Like so many purchase decisions, there is no one right answer.

As long as there is a single cable provider in our area and only two satellite services available your choices remain limited.  Both the cable and satellite companies force you into bundles of channels.  So if you want to watch some of the most popular channels like ESPN, History, DIY, etc. you are required to purchase a bundle of hundreds of other channels that you will most likely seldom watch.  For example those who are not avid sports fans are irritated that they pay about $5.00 per month for ESPN even if they never watch it because it is part of the “bundle.”

Before you decide to cut your cable you should do an inventory over a two or three week period.  Write down what you actually watch.  Once you have that list you can check if these programs are available using some other service.  For example, Netflix, Hulu Plus and Amazon TV offer many of the same programs found on cable.  Services like the History Channel, Smithsonian Channel and HGTV offer some complete episodes of series on their respective webpages.

Once you do the research you need to then do the math.  Right now you can’t cut the cord completely.  You still need to have a robust internet connection and install a TV antenna to get local stations.  The former will come with a monthly fee and the cost of the antenna will depend on where you live.  Some can use simple rabbit ears while others with require a more expensive outside-mounted antenna.

The streaming services like Netflix and Hulu Plus have monthly fees.  These fees need to be added to the cost of your internet connection.  Once you add up all these costs you will be able to make an informed decision if cutting the cord will save money and if it is for you.

Looking ahead, services like MyTV from Cincinnati Bell are beginning to offer ala carte channels, promising that you will only pay for the channels you watch.  Since this service is not yet available in most of the local area, it is too early to say if it will save significant money.  For sure, if MyTV becomes an option look for the Time Warner to begin to offer an ala carte service to compete.

ESPN may have brought us to the tipping point

About ten years ago there was published a popular book by Malcolm Gladwell titled the Tipping Point…How little things can make a big difference.  It was quite popular among many in business, since it described how major trends are shaped by seemingly small things.  Last month some announcements by ESPN, and late last year by HBO and Showtime, may have brought the cable and satellite industry to a tipping point.

If you are a regular reader of this column or blog, you know that I have written often about how the economic model of cable and satellite providers was slowly being eroded and could soon collapse.  The model in question is the bundling, or tiered, approach to providing your channels.  This model is one that forces you to pay for services that you will never use.  Since it results in very strong profits, the Time Warners and Comcasts of the world are not in a hurry to make any changes.

TV audience researchers have long known that many cable and satellite subscribers continued to pay escalating monthly fees only because it was the only way to continue to get ESPN and HBO.  These two services are extremely popular and, up until recently, exclusively available via cable or satellite.  Many analysts in the industry thought that since ESPN was making billions on this arrangement, they would be slow to embrace any major changes in how they reach customers.

Well, the tipping point may have been reached.  ESPN has signed a deal with SLING TV that will allow subscribers to have ESPN programming via internet delivered TV.  Initially, the SLING TV subscribers will have two ESPN channels among other popular cable fare.  All now available without subscribing to cable.  For $20 per month, SLING TV subscribers will receive a dozen channels including ESPN, Disney TBS, HGTV, CNN and the ABC Family.  

This announcement comes on the heels of similar announcements by HBO and Showtime. Both will allow viewers to subscribe to their services via the internet thus making cable cord cutting more attractive for millions who pay for, but don’t watch the 500 cable channels.

The SLING TV service is owned by Dish, the satellite service, but is being operated as a separate company.  Perhaps the folks at Dish are looking for a life boat if the DishTV market should implode.

The SLING TV service is not perfect.  You can watch only one channel at a time, you can’t record the programs and the channel offerings are a bit meager even for the cord cutters.  I look for other similar services to launch now that the tipping point has been reached.

As I write this I am getting ready to watch the Super Bowl…how much longer will I need a TV to watch it?   …and what about all those commercials?