Cut the cord to save money on cable

WASHINGTON – Do you dread the arrival of the cable or satellite TV bill each month?

If so, you’re certainly not alone. A growing number of people are taking action by “cutting the cord,” or making the leap from cable and satellite TV to Internet-only entertainment.

“You take this $70, $80 or $100 a month item out of your bill. It’s gone. And you save that money every month,” says Rob Pegoraro, a freelance technology journalist for USA Today. “My wife and I, we cut the cord back in 2009, and about a year in we figured we’d paid for the TV we bought the summer before.”

Cutting the Cord with Technology

When cutting the cord, Pegoraro says most people tend to start out with Netflix.

“It’s a cheap way to watch movies when you want to if they’re in Netflix’s selection at the time, which varies all the time. We wound up paying for Hulu as well, in part because they have a lot of stuff our daughter watches,” Pegoraro says.

Full seasons of popular shows like HBO’s “Boardwalk Empire” or Showtime’s “Homeland” can be purchased from iTunes. And with the right cables and adaptors, one can connect computers, tablets and phone to the TV to watch these episodes on a television that’s not Internet-ready.

Lisa Gerstner, associate editor for Kiplinger Personal Finance magazine, says some Blu-ray players also have access to the Internet, allowing users to directly access services like Netflix and Hulu.

Gerstner says another option is to purchase a streaming box.

Roku is our favorite. It’s a good price, about $50 to $100, depending on the picture quality you want. And they have tons of channels,” she says. “Netflix, Hulu Plus, Amazon, pretty much everything you could want on there. And if you already have a gaming console, you may know that you can stream a lot of stuff through those, too, like the Wii, or the PlayStation, Xbox.”

And the options don’t end there. Gerstner says Google’s $35 Chromecast, which is about the size of a thumb drive, is able to stream some things, as well.

WTOP’s Technology Editor Neal Augenstein has the low-down on the various gadgets one can choose from to cut the cord.

The Downside of Cutting the Cord

And while there’s no doubt one can save money by cutting the cord, there can be downsides — especially for sports fans.

“The big thing we’ve had to give up is watching baseball on TV,” USA Today’s Pegoraro says. “We see Nationals games more often in person, courtesy of our 20-game season ticket plan, than on TV.”

However, those who are happy with the games the traditional broadcast networks offer still have access to the free over-the-air digital signals from local TV stations.

“You can go back to the basics and get an antenna,” Gerstner says. “There are indoor antennas, and you can probably get a good one for around $40.”

Gerstner also says to keep an eye out for something called Aereo, which could be a game changer in the industry.

“So, this is a service where you can stream live network TV online and it costs $8 a month. It’s really convenient for a lot of people, I think, because you can get on your laptop and watch live TV. You can record shows for later,” Gerstner says.

Aereo is expected in the D.C. area one day, pending it survives a legal battle with major broadcasters.

The Future of Watching TV and Movies

With all the new technology, it seems there’s no shortage of folks waving their arms and insisting that, thanks to cord cutters, cable and satellite TV providers are finished.

The Los Angeles Times reports 700,000 cable customers cancelled their subscriptions in the third quarter of 2013. However, DirecTV added subscribers.

Gerstner says at the moment, a mass exodus from cable and satellite is not happening.

“I did a similar story about two years ago and I believe the figure then was 87 percent of households with a TV set were subscribing to some sort of service,” she says. “The new figure was 86 percent when I updated it, so maybe a little bit of cord cutting going on with that figure but not much.”

Gerstner also says, rather than saving money on TV entertainment, a lot of folks are doling out extra dollars.

“Some people are spending more, yes, because they’re keeping their regular cable service and then for the convenience of things like Netflix they’re adding that on, too,” she says.

Read more on what Gerstner has learned about cutting the cord in her recent Kiplinger article.

But while some are willing to keep paying for cable or satellite — and add on even more services — a younger wave of consumers could deviate from this trend. This group is the young 20-somethings who may have cable or satellite at college, or back home at mom and dad’s house, but plan to do without it once they’re on their own.

“I’m moving to New York with a few friends in January, so we probably won’t be having cable. We’re cutting expenses as much as we can,” says Jonathan Prezant, a senior at the University of Maryland.

Prezant’s classmate, Aaron Watkins, already cut the cord.

“It was just way too expensive to have both, so we figured we would get fast Internet, no cable, and then just use Xbox Live. I have Netlix. We download stuff,” Watkins says.

Still, it may not be wise to bet against the cable and satellite TV companies.

“I mean, have you seen the size of Comcast’s building in Philly?” Pegoraro asks with a chuckle. “It’s the tallest skyscraper in town. The cable companies have the advantage that they also sell Internet access and that’s not going out of style.”

Needless to say, it will be interesting to see what the next few years bring when it comes time to watching TV and movie favorites.

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