A Case for Cutting Cable...Or Not?

I've toyed with the idea of cutting cable and going with an internet-based TV model and wanted to do the numbers on if it would be worth it.  Let's face it, the DVR has revolutionized the way we watch TV.  It used to be that a station's decision to air a show at a certain time dictated when you had to be home to watch.  Now, I know plenty of people who--even if they are home--wait at least 15 minutes into the show so they can fast forward commercials.  I'm the same way. The only time I ever see commercials is during live sporting events.

There's a couple of other annoying factors.  First is the sporadic breaks that networks take between new episodes.  Especially when a show is heavily serialized, like Lost, it is frustrating to have to wait for, say, sweeps month.  (That's when ratings dictate how much networks will charge for ads based on viewership.)  Some networks heard this cry and the old model of starting the new season in September and running it through May is slowly dying.  Shows like "Lost" and "24" began mid-season (January/February) and ran straight through.  Networks are also introducing new shows staggered throughout the year.  But with a new show, who wants to invest themselves in it and it end up being canceled?

Not only are commercials loud and annoying, but so are the in-show lower third banners.  They are becoming downright distracting and obtrusive.  I watched three seasons of "Big Bang Theory" on DVD to catch up with the current fourth season.  Nice and clean.  Just the show.  Now that I'm watching live, I'm completely disgusted with the network's self-promoting banner ads.  Unfortunately, they are becoming bigger and more frequent BECAUSE we are DVRing and skipping their commercials.

Technology has made it so we have a choice in how and where we view our favorite shows now.  The market is still young and in flux, so who knows what this will look like a year from now, even.  But here's what I would consider except for a couple of problems.  You may think the problem is no DVR, but it's not.  I'll refer to it later.

Cut cable.  The first thing you can do is watch your local channels in high definition over the air. In fact, that is the best quality you can get.  There is no compression from the cable provider.  You'll catch a lot of sports, news, etc.  Yes, you lose the DVR for shows but just wait on that.

Add Hulu Plus for $7.99/month.  This gives you access to limited-ad supported, whole seasons of shows on the major networks.  This effectively acts like a DVR.  You just have to wait 24 hours before the show is available on Hulu.  There's usually 4-5 30 second ads per hour long show.  Hulu is expanding where you can watch, instead of just a computer.  It's on all game consoles and i-devices.  It's also coming to Boxee (a set-top box that allows you to connect to internet "channels" on your TV).  $7.99 is a lot easier to swallow than $79.99, huh?

To supplement Hulu, go with Netflix, which begins with a streaming-only plan at $7.99.  Netflix is so popular, it accounts for 20% of internet traffic in the US at peak times.  That's enormous.  I've only recently tried streaming, when it was added to the PS3.  I'm watching the entire back-catalog of Stargate SG-1 right now.  The first few seasons are only in 4:3 standard definition, so it looks fine on my TV.  But when I've tried to watch a 16:9 SD stream, it was awful.  I'm very interested to see how HD streaming is going to look.  For a few dollars more, you can add disc rental and you gain the ability to watch episodes of a season of your show back-to-back rather than live.  Of course, you have to wait months and won't get to talk at the water cooler with your coworkers about what happened on last night's episode.  I like to talk about shows, so that is a concern for me, but then again, that's where Hulu comes in.  Netflix is for those shows not on Hulu.

Well, now it is time to address the problem I have with this model.  Live sports.  Obviously, you still have the over-the-air local channels, but there are a lot of sports on cable networks like ESPN and Fox Sports.  Well, I see two options right now.  1) Boxee has an ESPN3 channel, which effectively takes care of most of cable's sports.  2) You can buy internet packages for each sport.  Some you get the whole season, every team.  Others you can pick a few teams.  A few examples:  Baseball has MLB.TV, which I found for $99.95 for the entire 2011 season. NBA has a package for $64.95 for all season.  NHL has one for $119.95 for 40 games/week all season.  Unfortunately, the NFL has no internet package due to their exclusive all-access pack with DirecTV.

The quality of the streams would be a concern for me, which is my second problem.  Everyone knows I love hockey; it would be a concern for me if the stream was not in HD.  But not just that, all of the streams from Hulu or Netflix that aren't available in HD, whereas they are with cable.

So let's look at the cost savings here.  That's probably the primary concern.  I pay $74 per month for HD cable and $45 for high speed internet with U-Verse.  That's $1,428 a year.  If we cut the cable and bump up the internet to ensure we get good speed, internet will go to $55 per month.  Add $7.99 for Hulu Plus and $11.99 for a one-disc/streaming Netflix plan (with Blu-Ray, of course).  That's $899 per year without any sports packs.  So savings are $529 or about 34%.  However, I would want baseball and hockey, so we have to add in $99.95 and $119.95, bringing my yearly total to $1119.66.  That's only saving $309 or 21%.

So now I've written this long blog post to only find out the savings for me is probably not enough to justify what will probably be a loss in quality by streaming across the board.  The $309 is arguably worth keeping a DVR, maintaining HD quality, and having the ease of just turning on the cable box.  But if you aren't as picky as me about HD quality and don't need the sports packs, you can potentially save a lot of money. Of course, if you don't already own a gaming console that can do these things, you'll have to buy one which will eat into those savings the first time.

This ended up being a pretty indecisive post, but truthfully I was writing it live as I researched. I didn't know how it would turn out when I began it.  Turns out, it is probably easier to just keep cable for now.  Ha.