Cutting The Cord—Alternatives to Cable and Satellite TV Services

By Mark Zonca
November 2015 View more Finance

More consumers are cutting the cord in hopes of cutting the soaring cost of cable and satellite TV subscriptions. Many are switching from traditional cable TV services to less expensive online video streaming services. According to Leichtman Research Group, major pay-TV providers lost nearly 480,000 video subscribers in the second quarter of 2015, compared to a loss of about 305,000 video subscribers during this same time period in 2014. “Cumulatively, Telco’s and direct broadcast service providers both had their weakest quarter ever for net video additions,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. However, the second quarter of the year is traditionally the weakest period for cable and satellite providers because of college students moving out of their campus housing and other people relocating.

Alternative Choices

Experts say fewer people today are willing to pay premium prices for channels they never watch. Instead, consumers are opting for less expensive online video streaming services. These services allow customers to watch everything from live news and sports to classic movies and modern TV favorites. It provides a variety of viewing options at a fraction of the cost of cable or satellite contracts.

There are numerous video streaming services available, with new options hitting the market seemingly everyday. Here are a few of the more popular options:

YouTube

YouTube is probably the best place to start. The popular online video sharing service offers a limited but growing collection of classic television shows, movies and documentaries at no cost—or a minimal cost to subscribe to a video channel or download videos to purchase. Most of the content on YouTube has been uploaded by individuals, but media corporations including CBS, NBC, the BBC, Vevo, Hulu and other organizations offer some of their material via YouTube, as part of the YouTube partnership program.

NetFlix

Founded in 1997, NetFlix is a subscription-based film and television program rental service that offers media to subscribers via Internet streaming and the U.S. Postal Service. NetFlix is the world’s leading Internet video subscription service with over 65 million members in over 50 countries enjoying more than 100 million hours of TV shows and movies per day, including original series, documentaries and feature films. For $9 per month, members can watch as much as they want, anytime, anywhere, on nearly any Internet-connected screen. Members can also play, pause and resume watching, all without commercials or commitments. On the downside, movies come and go frequently and there is a limited number of new titles for watching.

Hulu Plus

Hulu offers a great selection of current network TV and original programming. This is your best option if you don’t want to lose your favorite network programs. At a cost of $8 per month it is also a slightly less expensive alternative to NetFlix. However, programming on Hulu often includes frequent commercials, subpar move selections and cumbersome interface.

Sling TV

Sling TV is cheaper than cable and has a wide variety of content. No contract is required, but at a cost of $20 per month, it is more expensive than other streaming services and has limited on-demand content.

Sling TV is handy for sports fans because it offers both ESPN and ESPN2 and is the only place to watch ESPN without cable or satellite TV.

Amazon Prime Instant

If you do most of your shopping online, a solid option is Amazon Prime. It offers unlimited access to both Amazon Music and Amazon Prime Instant Video. This online video streaming services offers movies, television shows and original programming along with a large selection of comedy and children’s programming thanks to it’s recent deal with Viacom which controls Comedy Central, MTV and Nickelodeon. A potential downside is that Amazon Prime rarely gets newly released videos and there is an annual subscription fee of $99. Monthly subscription options are not available. Also, if you want a la carte content, it will cost you extra.