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Streaming Services Add Up: What Happened To Cord-Cutting To Save On Cable?

Dave Royse

Cord-cutting was supposed to be the cheaper, better alternative to cable and satellite TV. Why pay for endless hours of people fixing up houses, six cooking networks and minor league Italian basketball when all you really watch is "Game of Thrones" and the Steelers?

Cord-cutting — dropping cable or satellite in favor of internet-delivered content — shows no signs of slowing. The flight from traditional pay TV has hit new records for consecutive quarters, including the first three months of this year, when cable and satellite companies, like Comcast Corp (NASDAQ: CMCSA), lost more than 1 million subscribers.

Just over 3 million people quit the cable-satellite habit in 2018.

As it turns out, unbundling cable channels hasn't turned out to be a cure-all for the TV bill blues.

Bundling On Our Own

Hoping to stop paying for all the unwanted home repair and onion carmelization programming found in cable packages, millions of Americans have found themselves bundling services together on their own to get what they do want.

They’ve left a buffet because they didn’t want most of the ingredients. But ordering what they did want from the a la carte menu quickly adds up.

“Cord-cutting is supposed to be so that you don’t pay massive cable bills,” Axios business editor Dan Primack tweeted late last year. “So, now, instead you will pay for Netflix, Hulu, Amazon, Disney+, HBO Go, etc. This didn't work out as expected.”

Or, as Chris Welch wrote this week in The Verge: “It certainly feels like the golden era of streaming is coming to a close, and in its place we’re about to enter a very fragmented — and expensive — world of entertainment.”

The payments for streaming services like those from Netflix, Inc. (NASDAQ: NFLX), Walt Disney Co (NYSE: DIS)’s Hulu, Amazon.com, Inc. (NASDAQ: AMZN), and AT&T Inc. (NYSE: T)’s HBO individually may not cost much.

But together, along with internet service that's sometimes provided by the cable company whose cord you cut, it can get pricey.

With internet programming providers proliferating, the content is now cannibalized, sending many of us searching for our favorites. Where are those "Star Wars" flicks? What do I need to watch the Cubs, or "Friends"?

Having a family can complicate things: one service for the Disney movies for the kid, ACC Network for the alma mater’s games and yet another for those Norwegian detective shows somebody likes.

Some argue it’s still a pretty good deal.

“You get Disney Plus for $7, ESPN Plus for $5 [and] pretty soon, for $30 or $40 you get a pretty good library,” Tigress Financial analyst Ivan Feinseth said in a recent interview with Benzinga. “That’s the future.”

Forgotten Subscriptions

Most of us with multiple streaming services bought them one at a time over months.

One day, maybe after the Sling subscription for streaming live TV goes up to $25, you wonder how much you’re now paying in total. Besides Sling, you have Netflix at about $13, $5 a month for History Vault and you’re still paying $10 a month for Showtime because you watched “Homeland” last year.

HBO for “Game of Thrones” is another $15. Want 60 Minutes? That’s $6 a month for the CBS Corp (NYSE: CBS) app because Sling doesn’t have CBS.

With your internet bill, you’re close to what you paid for cable, if not higher.

On top of that, many streaming services have increased prices after the sign-up.

“If cord cutters thought there was some way they were going to evade the tyranny of annual price increases, they were deluding themselves,” industry analyst Craig Moffett of MoffettNathanson told The Washington Post.

Related Links:

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Wells Fargo: AT&T In Good Position To Capitalize On Streaming

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