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The Cord-Cutting Decision Is Tougher These Days. Here's What You Need to Know

James K. Willcox

Consumer Reports has no financial relationship with advertisers on this site.

Every year, more Americans decide to fire their traditional pay-TV provider, whether that’s a cable service or a satellite TV company. In 2018, the traditional U.S. pay-TV providers lost more than 3 million subscribers, according to the industry analysts Leichtman Research Group.

One option for so-called cord cutters is to sign up for DirecTV Now, Sling TV, or one of the other cable-replacement streaming services that have sprung up in recent years to supply live broadcast and cable channels over the internet. Remember, to do this you still need decent broadband service, and that’s likely to come from the same company that supplied your TV service in the first place.

If you’re thinking of going the cord-cutter route, the decision is more complex than it was just a year ago. CR’s advice then was to make a list of your favorite channels, find a cable-replacement service that provided them, and then simply sit back and count your savings each month.

That process still works, but the math has changed significantly.

As you can see in the charts below, almost every cable-replacement streaming service has hiked prices recently, and channel lineups seem to change every few months. Prices are also rising for on-demand streaming video services, such as Netflix, and major media companies are getting ready to launch their own services, adding consumer choice­—but also confusion.

Meanwhile, cable companies are trying to hang on to subscribers by promoting limited packages at discounted prices. This new marketplace competition is a boon to consumers who no longer have to tolerate the old “take it or leave it” days of cable TV. Now we have lots of choices when it comes to programming and pricing.

But putting together your household’s strategy for TV entertainment is trickier now. Whether you decide to stick with cable, opt to cut the cord and sign up with a cable-replacement service, or decide to just stream videos from a service such as Hulu or Netflix, you might not get everything you want from a single service—or even two.

“It’s pretty clear the growing number of options has made it much more confusing for consumers,” says Dan Rayburn, principal analyst at the media research firm Frost & Sullivan. “More people will find themselves having to pay for and manage content across multiple services rather than getting everything from a single provider.”

The juggling act is underway in many households, with so-called “stackers”—people who subscribe to multiple streaming services—on the rise.

More than 70 percent of U.S. households that use streaming services subscribe to more than one, according to the research firm Ampere Analysis. Just under a quarter subscribe to three services, and nearly 20 percent have signed on to four or more services. We expect this trend to accelerate as more companies, such as Disney and WarnerMedia, stop licensing their shows and movies to other services as they prepare to launch their own.

That’s confusing. It can be expensive, too. In many of these homes, the monthly cost for streaming is approaching or exceeding a traditional cable bill. If you subscribe to a cable-replacement service, a few premium channels, such as HBO and Starz, plus Netflix, Amazon Prime Video, and maybe a Major League Baseball streaming package, you might not be saving money by cord cutting. In the "Streaming vs. Cable TV" chart below, we show how you can equal the cost of a traditional pay-TV package by stacking several streaming services.

In our article "Cable vs. Streaming Live TV Services," we highlight the pros and cons of each option to help you decide whether a cable TV package or a cable-replacement streaming service makes the most sense for you—or whether you’d be better off with neither of these options. Quite a few people get by with just a streaming service, such as Hulu or Netflix, especially if they can get good TV reception using an antenna. There are also a growing number of free streaming video services you might not know about that let you watch TV shows and movies if you're willing to put up with advertisements.

The old world of TV entertainment was easy for people to understand, but the lack of choice was frustrating. The new world is complicated but ultimately has much more to offer.

What It Costs to Watch TV

The legions of Americans abandoning cable TV aren’t necessarily going on a content diet. Many are “stacking” a variety of online streaming video services to get an à la carte combo of channels, shows, and movies.

The chart immediately below shows just how many services you can get for the same cost as an average cable TV package. Each service scratches a different itch: YouTube TV has 70-plus live channels; Amazon Prime Video, HBO Now, Hulu, and Netflix offer original shows and movies. Cut out a few services and you can save plenty of money compared with a typical cable bill.

But the math is getting less friendly to streaming. The charts at the bottom of the article show how several major online video services have raised their prices in the past few years. One big advantage relative to cable, though: no tacked-on fees, which can bump up traditional pay-TV bills significantly.

Streaming VS. Cable TV
(Cost of cable is national average; neither price includes internet service.
Disney+ is coming in November 2019.)
Rising Cost of Cable-Replacement Services
Monthly cost
Rising Cost of Netflix
Monthly cost
Streaming vs. Cable TV
(Cost of cable is national average; prices don’t include internet service.
Disney+ is coming in November 2019.)
Rising Cost of Cable-Replacement Services
Monthly cost
Rising Cost of Netflix
Monthly cost

Editor's Note: This article also appeared in the September 2019 issue of Consumer Reports magazine.

Consumer Reports has no financial relationship with advertisers on this site.



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