Even with price hikes from Netflix and Hulu, streaming still cheaper than cable
Jefferson Graham
Wait a minute, $51 a month to subscribe to Hulu's cable TV alternative service?
That's the new $6-a-month increase the Disney/Comcast/AT&T-owned service told customers about this week for its ad-free, top tier of service. Not that the ad-supported version is immune. That's going up $5 to $45 a month. This comes just shortly after Netflix raised its rates for 2019, although not as dramatically as Hulu, averaging around $2 more monthly. Or put annually, that's $72 more for Hulu and $24 more for Netflix.
(More on the fine print of streaming rates in a second.)
So is cutting the cord still a better deal than cable? Is now the time to go back?
Not if you like paying more money. The two largest cable companies, Comcast and Charter Spectrum, both quietly jacked up their rates as well at the end of 2018, and more substantially. Spectrum's new rates, reports the Verge, will add $100 yearly to the current cost of service. DirecTV and the Dish Network also raised rates.
"Cutting the cord saves you more money than it did last year," especially with the higher cable/satellite fees, insists Luke Bouma, the editor of the CordCuttersNews blog. "When you really run the numbers, you see the difference."
So let's do it.
Signing up for the entry-level Spectrum plan of internet and TV in Los Angeles tops out at $159.91 before taxes, with a note that fees will be raised another $4 in February, bringing the total to just under $165. Installation is quoted at $35.
DirecTV's (entry) plan is $88 in a two-year contract that charges $20-a-month early termination fees while the Dish Network comes in at $74.99. This includes the local TV and DVR fees and is before taxes.
That's way more than the $11.99 for Netflix, $5.99 (the new lower price, with ads) of basic Hulu, or the $40 monthly the cable TV alternative services YouTube TV and DirecTV Now start at.
The beauty of the streaming services is that all you need is an internet connection to bring thousands of movies and TV shows to your TV, either via a streaming player like the Amazon Fire TV Stick or Roku, or a smart TV, which has built-in apps for Netflix, Hulu and other channels.
So, to be fair, let's just compare cable TV service, Spectrum, minus the cost of internet, to compare pure TV streaming pricing to cable. Granted, you generally have to go to the cable company to get internet, and don't have other choices, but for the sake of argument, hear me out.
Los Angeles Spectrum gave us an online quote of $89.93 for entry-level TV service that includes 2 DVRs, but cautions that prices will go up by $4 in February, bringing the total to $93.93, before taxes. (We tried getting TV-only pricing from L.A. competitor Frontier, but the rep told us the company won't sell TV service without getting Internet as well.)
Some 33 million people ditched their cable or satellite subscription in 2018, according to researcher eMarketer, up from 24.9 million in 2017. People got tired of paying to watch so many channels they didn't care about or being stuck in bundles that didn't matter to them. And need we mention the ever-rising prices of cable and new fees like $10 a month for broadcast TV, $8.50 for sports and more?
Even with the $51 of the top tier Hulu with Live TV (which includes the broadcast networks and originals like the Handmaid's Tale) or $40 for YouTubeTV, add in a Netflix or Amazon Prime (which 100 million people subscribe to, primarily for the expedited shipping), that's still a good deal cheaper than cable.
"Most cord cutters have two to four services, so even with the price hikes, if you had all four, you're still under $50 a month," as long as you're not subscribing to a cable alternative, notes Bouma.
But there's one more wrinkle. The cost of internet, which goes up — or about even, once the Internet bill is factored in. (I currently pay $75 monthly for the "Double Play" package of TV and Internet with Frontier--that's before DVR and router fees and taxes. When I inquired about an internet only price, I was quoted $70.)
So by the time you're all said and done, you're probably paying the same you did before, and that will only go up over the next few years, as more new services from Apple, Warner Media, Disney and NBC/Universal launch.
But at least you won't have to pay those unwanted broadcast TV and sports fees —we hope. And you'll get a better experience with the ability to watch shows on TV, tablet, phones or laptop, with visual menus and recommendations based upon your viewing history.
Saving money is one reason to cut the cord. Better viewing is a big factor as well.
In other tech news this week
—Facebook is removing more Pages and Groups to crackdown on duplicating banned content. The social network said it will begin shutting down pages affiliated with people who violated the company’s community standards in the past. As part of the crackdown, Facebook will be taking down some seemingly innocent Pages and Groups to prevent their delinquent Page owners from continuing forbidden activity. Additionally, Facebook said may may instant messaging inter-operable between the Facebook, Instagram and WhatsApp services that are all owned by the company.
—Meet Amazon's latest gee-whiz invention: Scout, the neighborhood delivery robot. Scout, an electric-powered delivery robot on six wheels, is being tested near Amazon headquarters in the Seattle area.
—You'll soon be able to use Apple Pay at Target and Jack in the Box. That's a win for Apple, which has struggled to get its mobile payments system into more top retailers. It still has four more huge hurdles from the ten biggest retailers: Walmart, Lowe's, Home Depot and Kroger have yet to sign on.
—The free, ad-supported streaming service Pluto TV, which features news channels, and many older movies and TV shows, was purchased for $340 million by Viacom (MTV, Comedy Central) this week. Look for more Viacom programming to join the Pluto lineup.
This week's Talking Tech podcasts
How to get great prints from your smartphone.
How to unsubscribe from streaming services.
Viacom's purchase of Pluto TV made me take a look, and I'm glad I did.
How to watch the Super Bowl on streaming TV.
If you have a second, please join me on a quick #Roadtrip video I made of the annual drive from Los Angeles to Las Vegas to cover the Consumer Electronics Show.
I also invite you to listen to the daily #TalkingTech podcast and follow me (@jeffersongraham) on Twitter, Instagram and YouTube.