This week you have likely seen the talk about the cost of cord cutting after Hulu announced a $10 price hike bringing the subscription price to $54.99. Now AT&T TV NOW has raised its price to $65 a month. This has lead to very predictable stories and tweets about the cost of cord cutting and how it is now cheaper than cable TV. So is this true? Will cord cutting really cost more than cable TV? Lets take a look…
In 2018 the average cost of cable TV was over 107 a month just for TV and that was before all the 2019 price hikes including Spectrum who raised their prices three times in just 12 months. Spectrum now charges $72.49 a month for their basic Select package, up from $64.99 a month. But you still have to add fees and taxes on top of that. For example, Spectrum now charges $7.99 a month per digital adapters so you can watch your TV. You also need to pay $13.99 a month for the broadcast TV surcharge and a $12.99 a month DVR free. So let’s say you get two digital adapters and add in the broadcast TV fee. You would be paying $115.45 a month just for the basic Select TV package. Spectrum’s Silver package would cost you $135.45 and the Gold package now costs $155.45 a month with just two converter boxes, DVR fee, and the broadcast TV fee. (Note these prices are for TV only, no internet or phone pricing was included.)
The new price of Hulu with Live TV is now $54.99 a month and comes with Hulu’s $5.99 limited commercial on-demand service. (So you could argue that the cost of the live TV service is just $49 a month.) So let’s take a look at how long it would take for Hulu to become more expensive than cable TV if Hulu keeps raising its price but cable TV stops.
If Hulu kept raising its price $10 a year but Spectrum and others decided to stop raising their prices, it would take over six years for Hulu’s live TV price to reach the current price of Spectrum’s basic Select TV package. Again, that’s assuming Spectrum will never again raise its rates or fees, something that is looking very unlikely after it raised them three times in 12 months.
Many ask us why we don’t include the cost of internet in our comparisons. That is because the vast majority of Americans have internet service even with cable TV. So we don’t include that as an exclusive cord cutting cost.
There is also one other expense on cable TV and that is additional streaming services. Now over half of all cable TV subscribers pay for at least one streaming service like Netflix or Hulu. Ask yourself, would you be happy never seeing a new Stranger Things episode if you went back to cable TV? The answer for most cable TV subscribers is no as the vast majority of them have continued to subscribe to streaming services like Netflix and Hulu to get these types of series that are original to streaming platforms. So if you’re looking at the total cost of your TV viewing with cable TV, you also need to look at adding services like Netflix or Hulu to your cable TV bill.
So from the looks of it, cord cutting would have to keep consistently going up in price for more than 6 years before it would reach the price of cable TV. (Assuming cable TV stops raising its price.)
So how much money are you saving with cord cutting? Leave us a comment and let us know.
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