Cord Cutting 101: Does Cord Cutting Actually Save Money?

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It happens all the time – you hear that cord cutting saves you a bundle but then an article comes out saying that it doesn’t, and you get all confused. Well, let me save you some trouble – here is the definitive TRUTH when it comes to cord cutting … YES, you save money! Don’t believe me? Well, let me walk you through some facts and details.

Cable prices are rising

You’d think that with the exodus from cable contracts, cable companies would reduce their prices to try and keep their customers. Unfortunately, this couldn’t be further from the truth – in fact just last week, Comcast announced that they’d be raising the price for an average cable bill in 2018 by 2.2%. AT&T is similarly raising the prices of DirecTV’s services by up to $8 per month, and these price hikes are not just restricted to the big boys! Pay TV for example as according to an analysis of government data, been increasing at almost double the rate as inflation and overall, cable and satellite TV bills have risen by close to 53% since 2007.

Let’s Break It Down

Let’s do some fairly simple math shall we and break it down. Starting at average price of $100 per month for cable service and you are paying $1200 per year for the pleasure. That’s your normal outlay, and it only increases if you add in Pay TV or anything similar. Now, let’s see what you need to spend to build your cord-cutting dream setup.

Antenna

An antenna is not essential to a cord cutting setup, but it is a really good step. You could go with a completely IP based solution – DirecTV Now or Sling TV for example, but an antenna gives you lots of local content as well and is a single one time cost. Antenna’s vary in price from $30 to $200 or more, and the price depends on your location and proximity to the TV towers.

TV antennae are a one-time purchase though, and even at the high end it only equates to $16.66 per month. However, lets split the difference and assume that you spend about $100 for a decent antenna. This should give you from 10-50 channels depending on your location and might be enough by itself.


Streaming Services

Now you were probably already paying this on top of your cable anyways, but let’s add in Netflix ($11 per month) and Hulu ($8 per month) and Amazon Prime Video ($99 per year). It is not fair adding these costs to the cord-cutting option without adding them to the cable option also, but I’m bending over backward to be fair here!

Also, most people would probably only have 1 or 2 of these streaming service, but oh well!

We can also add in Sling TV just to make things even more “fair” as that gives you a bunch of sports channels as well as some other specialty networks, so let’s add another $20 per month.

OK, now let’s add it all up and see what we get.

Our initial cost per year is $1200 or so – you’re probably paying extra for cable boxes and stuff but let’s start with that. You spend $100 for the antenna, and then Netflix is $132 per year, Hulu is $96 per year, and Prime Video is $99 per year.  Add in Sling TV at $240 per year, and you’ve spent in year one $667. That still saves you $533 per year.

Since the antenna is a one time cost, you do not need to pay that after the first year, so you get back another $100 per year, moving your savings closer to $633 per year. You are paying less than half when you cut the cord!

Now, I don’t think you can argue with that!




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Antonio Ninham is Editor in Chief of Cut the Cord and is responsible for overseeing the news, reviews, analysis, and featured articles on cutthecord.com. Antonio graduated from UW-Milwaukee with a degree in Psychology. He’s a drummer that has been playing for over 20 years. He’s generally a private person, but for you he’s ready to divulge a couple of personal details. He subscribes to Netflix and HBO Now loves the show Silicon Valley. Antonio is avid listener of comedy podcasts and a watcher of youtube channels devoted to movies such as Alien, Predator, The Terminator, and Robocop. I hear he watches a lot of Conan remote segments. Antonio is a casual football fan. He likes the Green Bay Packers. He loves the Irish sport, Hurling (look it up).

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