Blog Post

In Defense of Cable

[qi:032] With Apple’s iTunes now offering HD programming from all four major broadcast networks, Netflix streaming shows from CBS, and Hulu letting you cherry-pick the best skits from “Saturday Night Live,” you might think it’s time to cut the cable cord. But there are some things you should consider before telling Comcast where it can shove its overpriced coaxial cable. Whether it’s time to dump cable depends on how much TV you watch, how important picture quality is, and whether or not you’re a sports fan.

Let’s say your cable bill is $70 a month (which roughly four out of five American households pay, on average), or $840 a year. Here in the Bay Area, that gets you access to hundreds of channels (no premium channels like HBO), HD programming and a DVR. More than $800 a year for TV is a lot, especially in this economy…or is it?

The math

If you watch just two shows each weeknight, that’s 10 shows a week. That means with cable you’re paying roughly $7 per show (in HD) each month, or $1.75 per episode if there are four episodes of each show in that month.

On iTunes, individual episodes cost $1.99 for standard definition and $2.99 for high definition, but there is a discount if you purchase a season pass. I looked at the season pass prices for a sampling of 10 popular shows (“The Office,” “Mad Men,” “Grey’s Anatomy,” etc.), and it would cost $417 for a season’s worth of entertainment. That’s half as much as the yearly cable bill — but it’s only for those 10 shows. If you have kids that number could get a lot bigger real quick, and any additional programs you want to watch will cost extra.

With cable, you get everything you currently watch, as well as other stuff you might want to try (and don’t tell me you never zone out in front of the TV, flipping through the channels). Plus, with iTunes you have to buy the shows, which fills up your hard drive. And unless you have kids, will you watch any of these shows more than once?

Now, you could install an over-the-air antenna to pick up HD programs from the broadcast networks for free, but then you’d need to buy some kind of digital recording device like TiVo, and pay a monthly service fee, which cuts into the savings you got from dumping cable (which has a DVR) in the first place.

If you don’t like paying à la carte for TV shows, you could go with the Netflix streaming service. With a $14.99-a-month Netflix subscription and a $99 Roku (or an XBox or LG Blu-Ray player), you can stream all-you-can-watch movies and TV shows to your big screen TV at no extra charge. The Netflix service works extremely well on the Roku, there’s just very little content. Netflix is addressing this, adding programming from CBS like “CSI” and “Numbers,” but it still has a long way to go. If you want to watch “The Office” through Netflix, you can only enjoy seasons 1-4, not this current season. And while the Netflix stream looks quite good (depending on your connection) on your TV, it’s not HD.

For a reliable, free option, there is Hulu, which offers tons of great premium content. But Hulu has to be watched on a computer screen (attaching the computer to the TV is possible, but not practical for everyone), and it’s not in HD. And because of release windowing issues, new episodes of shows like “House” and “It’s Always Sunny in Philadelphia” aren’t available on Hulu until a week after they air on TV, so you’ll have to wait.

The content

No matter what alternative set-top box option you may choose, there is still one big component missing from all of them — live sports. Sure, sports is becoming more prevalent online as baseball, basketball, golf and now even football are getting into live-streaming the action. But again, you’re stuck watching on a small screen and not in HD, and not every sport streams every game.

Don’t get me wrong. Cable is far from perfect. I’ve had to deal with Comcast’s really dumb DVR and key queuing issues, and the company has announced it’s raising its rates again in November (at which point I’ll have to redo my math). And the alternatives are looking more attractive: Apple and Hulu keep adding content to their services, the Roku is opening up its box to more video than just Netflix, and Amazon is making its own streaming pay-per-view moves. But for the average consumer, cable still delivers the goods.

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10 Responses to “In Defense of Cable”

  1. Great comments and great topic, but let’s not think of this as an all or nothing debate. Today, web video is at a point where it is a supplement to existing PayTV services. HULU and other sites are good as virtual DVRs (and great chances to find other shows); however, when my colleagues tested consumer preference, 83% of broadband households chose the TV as the primary viewing platform.

    So let’s jump into the not-so-distant future and suppose HULU or ABC’s Hi-Def player are coming to the TV screen. Suddenly you have a much more compelling argument for open platforms and web delivery… well sans sport, but we’re getting closer.

    For now, expect to maintain a blended model-the efficiencies of paytv delivery with the selectivity (in terms of time and content) of web-based video.

  2. Your math also skips over one important fact: no TV shows put out 52 episodes a year. To assume that I watch 10 shows a week, and would be paying for them on iTunes totally misses the fact that over half the time I’m watching a re-run. I can watch that show on iTunes again as well, I just don’t have to pay for it again. I don’t know how long I’ve been waiting for a new episode of Lost, but Comcast certainly isn’t discounting my bill in the meantime…

  3. There’s one thing that Apple TV offers that most cable and satellite providers can’t/won’t — free video podcasts. That’s a mighty huge catalog of video that people can download and watch without paying a dime, and while finding the good stuff can be tricky, there’s something worthwhile out there for everyone.

    I’m paying $1,100/year for non-HD satellite TV, largely because I’m a sports fan/blogger. ($180 of that is Setanta Sports. Gotta have my Premier League and Aussie Rules fixes.) If Apple TV could stream the ESPN channels or ESPN360 and a soccer channel or two, even in non-HD, I’d have to consider it. Disney owns ESPN and Steve Jobs has a huge stake in Disney, so you’d have to think they could find a way to make this happen if they wanted to.

    That said, it would probably require too many companies cooperating with each other, which never happens anymore. Plus, cable companies would probably punish ESPN for making a deal with Apple.

  4. You pay $800.00 for cable and you get bandwidth that is so slow and behind in comparison with other countries. At the same time, you get forced fed corporate speak news -dumb down style with commercials. This is called let’s continue to put the screws to the dumb public. Is it our fault for not fighting back or is it that they don’t care what we say? Keep in mind the communications companies have great friends in Congress and the Senate who they help elect. I say speak with your wallets because as we continue in this economic downturn it won’t be long before you’ll choose food over cable.

  5. There is a critical difference between iTunes and cable/sky.
    There are no advertising breaks in an iTunes show.

    Depending on what you figure you time is worth, that
    10 mins saved out of every tv hour – 400 mins a month
    in your example – will pay for a _lot_ of downloads.

  6. I have the best of all worlds. I have a TiVo, hooked up to Comcast. I originally had the digital cable +++ package (whatever they’re calling it these days), but when my 6-month special expired I simply downgraded to Limited Basic.

    Still have the TiVo; it still records all my network shows in HD. Subscribed to Netflix to get some movies that I would have otherwise gotten from the premium channels.

    In all, I pay -$.85/month for the cable subscription (yes, you read that right — Comcast offers a 2-package discount, and Limited Basic is cheaper than the discount) + $18/mo for Netflix, instead of $80/month.

    Saving $60/month and getting more content than I had before = awesome!


  7. BuyLowSellHigh

    So what you’re saying is that if:

    1) I am addicted to sports, or
    2) I have a large, diverse family, who I think should pick and choose whatever cable programs they want to watch

    Then cable is the better option?

    Of course these are fine reasons for a lot of people to choose cable, but if the rest are better off with pay-per-use then that’s good news to me, because “the rest”, then, is a pretty big group of people,

    Sorry, but I think the quality of GigaOM has deteriorated a lot over the last year. The whole war against pay-per-bandwidth never made sense to me and I think this falls in the same category: A pandering to the established media outlets that’s hard to ignore when GigaOM is, in fact, a part of that etablishment.

  8. I think that’s the beauty of Hulu…. all the shows you want to watch for free. If the kids really want that 11th show – tell them to watch it online and save the money. Or watch everything on line (thats what I do) and spend nothing.