Unless you live under a rock have never had to pay bills, you’ve likely noticed that cable costs have risen over the last 10 years and are now HECKIN’ expensive. This isn’t just from market inflation or supply and demand.
It’s all thanks to the big wigs who control mega media conglomerates and their inability to evolve into the 21st century.
Here’s a fun fact: 33 million people “cut the cord” in 2018
One reason why? Because the average cable/satellite bill in a pay-TV household is about $107 per month.
If you’re a millennial or a money blogger, you’re probably thinking yes, duh, snooze. Old news.
If you’re paying to consume any type of TV entertainment, though, it’s important to stay abreast of the latest news so that you can know WHO is getting your money, and if they’re getting it fairly. (Really any excuse to work the word “abreast” into my blog, to be honest.)
Let’s dive in.
Why is my cable so dang expensive?
It’s a convoluted topic with many moving pieces, but basically it boils down to this: Major broadcasters can and do collectively remove their channels from a cable provider’s TV lineups and hold them for ransom until your TV provider agrees to pay more.
And then, in a *classic* case of We Have A Total Monopoly On Something That You Want So We Will Charge Out the Wazoo, consumers — aka TV watchers — have to shell out more money to watch the same channels they always have. And it’s not fair.
Sounds like a bunch of sketchy stuff, right?
IT’S TOTALLY LEGAL.
The constantly rising cable costs are the result of what are called “retransmission fees” — a requirement mandated by super old-school federal law that allows major media corporations (think ABC, CBS, FOX and NBC) to charge local providers fees for “retransmitting” their signals.
Essentially, the rules created by the Cable Act of 1992 state that local broadcast stations can declare Retransmission Consent status.
If a local broadcast station declares Retransmission Consent status, YOUR cable/satellite provider has to beg for permission to retransmit the station’s broadcast signal. And by beg for permission I mean pay A LOT of money for the channels they’ve always provided.
Besides the obvious issues of unfair costs, these negotiations can result in threats of “blackouts” if your cable provider does not bow to their demands.
And if you think simply switching cable providers is the solution, think again.
Blackouts across the country are at an all-time high. Obviously, this is an unsustainable approach and seems more like a temper tantrum than an effective business model. But alas, here we are.
Plus, more and more mergers are occurring, which means there will be fewer players in the game and even more industry monopoly than there is now. For example, Nexstar is in the process of purchasing Tribune Media, which expects retransmission revenue to rise by about $75 million. And if you just skimmed over that last bit, I bet you can still guess where their “retransmission revenue” comes from.
You, friend. The viewer.
But why is cable getting more and more expensive?
Large media groups are demanding high rate increases to OFFSET THEIR DECLINING VIEWER BASE.
Did you catch that?!
*******Scene: A conversation at a national broadcast network, probably******
NETWORK CEO: “Hmmm, we seem to have plummeting revenue. How can we make more money?”
INTERN: “What if we create a Netflix competitor? Ad-free content and the exclusive platform for our hottest shows.”
NETWORK CEO: “No, that makes entirely too much sense. Let’s see how long we can drag out the cable battle. I won’t go down without a fight! And also a lot of federal law changes!”
INTERN: “How about we charge advertisers more for all of the obnoxious commercials?”
NETWORK CEO:“Nope, with our declining viewer base, advertisers are pouring less and less into TV ads and more into digital.”
INTERN: “How about we literally hold our channels hostage and cause TV blackouts?”
NETWORK CEO: “NOW YOU’RE TALKING!”
INTERN: “And! And! We can just charge people more for the TV they don’t even seem to want!”
NETWORK CEO: “You’re promoted!”
*********** END SCENE*************
I just want to take these executives and shake them by their shoulders while screaming that their lowered profit margin isn’t my financial responsibility.
It’s as simple as that.
The pressure is on traditional cable networks to figure it out, and fast.
It sounds like Disney is trying to do just that, according to this interesting USA Today article:
Disney's expanded streaming subscription play "will impact other streaming video providers that previously licensed Disney-owned content — content that will be redeployed exclusively on the new Disney over-the-top (OTT) media services offerings," wrote John Harrison, global media and entertainment sector leader for advisory firm EY in its recently released report. "This could become an even more important industry-wide theme as (media and entertainment) companies look to own the customer relationship directly."
Perhaps unsurprisingly, Disney and other conglomerates are getting in their own way because they are afraid their own streaming efforts will compete with their current broadcast, theatrical and DVD revenue streams.
That same USA Today article notes that, "every piece of the video ecosystem has been over-earning for decades, which makes it obvious why nobody really wants change to happen."
Right. Because it’s going so well, guys.
The big takeaway:
Networks are going to figure out how to eliminate the middleman and own their relationship with the consumer directly.
In the meantime, if you find that your household does want/can afford cable, here are a few tips on how to get it at the best price.
4 ways to lower your cable bill:
Put on your negotiating pants! And if they give you pushback, just out-talk them. Maybe they’ll get sick of you and cave?
At the very least, they may budge and give you an introductory price just for the sake of keeping you as a customer. As the internet has proven time and again, cable providers really, really don’t like losing you as a customer.
2.) Stick to the basics.
Apparently people with bigger houses sometimes have multiple cable boxes throughout the house. I wouldn’t know, because I am in itttttyyy bittty living space comparatively.
Lighten your load!
Consider just paying for one cable box in the main TV-watching room. And, consider dropping DVR if you want to save more — it’s typically an added cost somewhere between $5 and $20 each month. However, I know certain readers who find that extra cost WELL worth it to be able to zip through commercials during Jeopardy! and Hallmark movies. And that hatred of TV commercials is one that I deeply understand ;)
It’s all about mindfully considering what features are worth the cost for YOU.
3.) Do your own research.
Often — especially in rent situations — we have one option when it comes to WHO our provider can be. But it’s worth digging into potential alternatives before blindly accepting neighbor Ned’s advice.
Can you bundle your internet and save? (Be wary that you aren’t just wildly overpaying for internet in order to get a “cheap” cable plan!)
Are you on the smallest available package? The average cable viewer has access to 200 channels, and only utilizes 20. BUT, often that’s because the provider has set it up in such a way that you have to get 200 just to get the few good channels you actually want.
Major broadcasters will basically lump the “good” channels in with the lame ones to subsidize the cost. E.g., Disney may require that A&E is a required part of the bundle to those who want access to ESPN.
Yeah you heard me, Disney owns 80% of ESPN. And ABC. And 21st Century Fox and affiliated studios. And Lucasfilm (aka Star Wars franchise). And Marvel. And more. If you’re ever looking for an internet rabbit hole to go down so that you can waste three hours (and who isn’t!), research media conglomerates. It’s SCARY how there are so few people at the top of the food chain controlling all of the content broadcast in the United States. These are the things that keep me up at night.
4.) Opt out.
You always have the option to cut that cord. Head to the local pub to watch the big game — you may make a new friend. Read a book at night instead of falling asleep to the TV — you may just sleep better. And hey, mooch off of your parents or a friend every now and then with an online cable log-in to stream a particular game/event/show. But on the whole, my guess is that you find better things to do with your time. You might be surprised to find that you don’t even miss cable at all. Intentionally zoning out in front of the TV can be a nice reprieve after a long day or physically exhausting week, but it’s not something we should make a habit. Our days are so filled with NOISE, it’s important to be incredibly selective about what voices you let in your head.
RELATED READ: Here's How to Make the Most of Your Mental Bandwidth
What are cheap alternatives to cable?
According to the Leichtman Research Group:
7 in 10 U.S. households now access a subscription to Netflix, Amazon Prime or Hulu
43% of U.S. households now have more than one streaming video service
Note that with any streaming service, you’re depending on a strong internet connection.
So don’t come at me with complaints when your family’s 5 iPhones, Netflix, iPads, Nest thermostat and Spotify are all trying to simultaneously stream on 25 Mbps.
Will you need to pay for more internet speed to support your TV streaming service? Likely not, and you likely already have a streaming service anyway. It’s worth considering and researching for yourself, though. Don’t simply trade one cost for another and then be surprised your bills aren’t that much different.
All that said, there are some excellent competitors to put in the ring.
Top cable alternatives and streaming services:
What can be said of Netflix to summarize its many qualities?! Shall I compare thee to a summer’s day?
I think these two tweets tell you everything you need to know:
Otherwise known as The Only Way to Watch The Handmaid’s Tale, Hulu is an online streaming service with entire TV series, movies, original series that goes for about $8 per month with ads and $12 per month for an ad-free experience. And, their new live TV offering lets you watch shows as they air for about $40 per month. However, it’s important to read through the details and understand which channels and shows you’d have access to. This plan also gives you the ability to DVR live TV, which seems cool. I’m shocked I haven’t seen a million ads for this … ? Mysterious.
You may already have access to this streaming service if you pay for the company’s 2-day Prime service. And if you don’t, you can pay about $9 per month for the TV/movie component. One thing I just learned: If you want to watch something and it’s not in the Prime library, you can likely rent it right there — even single TV episodes.
This isn’t a total cable replacement by any means, but it’s something to keep an eye on. The platform has debuted a few original shows, and is even dipping a toe in the sports space.
In 2018, Facebook secured the exclusive rights to 25 MLB games for a cool $30 million. Facebook streamed the games over its TV segment, Facebook Watch. (Did anyone else know this was a thing?) However, the initial effort was met with a resounding “Ehhhhhhhhh” from viewers — people complained about breaks in streaming, rain delay issues and all the other things that internet users can think of to complain about.
The sport TV landscape is definitely shifting, so buckle up.
Supposedly this “cable-free live TV” lets you stream 60+ networks for about $40 per month. They’re also tapping into that sports space and selling this as a good alternative for sports fans.
This is probably the option closest to traditional cable, and with a low price point. It’s a streaming service, and their whole claim to fame is “no useless channels” — so you get good ones like HGTV, Food Network, ESPN and more starting at $25 per month.
This relative newcomer offers cable packages at a fraction of the cost. Again, it’s an internet-based streaming service, but it’s worth looking into what channels you’ll be getting for about $16 per month.
This is definitely on the expensive end of the spectrum, with prices running anywhere from $35-$70, depending on your channel package. However, you gain access to 60-120 channels (of live TV), making this the closest competitor to true cable.
Many channels have free mobile apps that you can download to your smart TV or mobile tablet. You’ll likely have to suffer through ads, but maybe that’s worth the cost savings for you. Most major cable networks (FOX, ABC, NBC, etc) have apps and put up recently aired episodes temporarily for free, though you will likely have to wait a week after it broadcasts. If show spoilers aren’t a concern, this may be a good option for you.
Some of the channels do offer a paid version of the app. And if you cut cable and just want access to a certain TV series, $5.99 per month may be reasonable for you. HOWEVER, some channels you can’t ever access through the app without a paid cable subscription, which is entirely pointless to me. Be wary.
Local networks via antenna — it’s a thing!
If you live within roughly 20 miles of TV broadcasting stations, a TV antenna may give you free access to some channels. The idea is that the antennas — which aren’t like the ol’ rabbit ears we know and love, and are slightly less unsightly now — pick up any local station (such as CBS, NBC, ABC, FOX) for free. The biggest consideration here would be the signal. If you have a weak signal, don’t bother. A consistently poor TV connection poses the threat of you smashing your head through the screen in frustration.
According to Antenna Web, it would give my household access to, like, three major news stations and a few lame channels. Cool, but probably not worth it for us.
That was a lot of talk about TV.
If you still think cable is worth it for you, great!
Maybe your internet, phone and cable bundle makes it worth it. Maybe you have a sneaky HOA deal like my parents did. Maybe you just really live for The Bachelor on Monday nights.
My goal with this article isn’t to shame you for this spend — really the shame should be entirely on the cable conglomerates and their weasly ways. (I guess there goes any chance at a Spectrum sponsorship?)
In fact, my goal on this blog is never to shame you for spending money or guilt you out of living a life you love.
Rather, I want to encourage you to make each purchase MINDFULLY and intentionally.
Maybe you mindfully decide that Saturdays just aren’t the same without the sports network playing as your weekend background music. That’s your choice. As long as you’re spending mindfully and going in with your eyes open, enjoy!
At our condo, we have Netflix — WAIT NO, we mooch off of my parent’s family plan still. And we also have access to HBO Now (shoutout to ze German friends — needed that to watch Westworld, which turned out to be a bit much for my sensitive psyche and had to be turned off permanently).
So … yeah, now that I think about it, we are total leeches and haven’t paid for any type of TV entertainment in a good long while. But TV isn’t really a priority for us, although I love a good Gilmore Girls marathon.
Moral of the story: Do what’s best for you and your budget.
What’s the cable sitch in your household? Netflix or Hulu? Am I missing a better option in the list above? Comment below and let me know!