How to Lower Your Cable Bill

By on May 24, 2013

Cable Bill

When income is limited, some of the first things families try to cut back on are entertainment expenses, such as cable bills. Although cable providers present you with an “amazing deal” upfront, the fact of the matter is: there are much cheaper alternatives (that don’t come with long-term contracts and unexpected fee hikes). In this article I’ll go over a few method for how to lower your cable bill.

The Problem with Cable

The costs of television programming are on the rise, and with that, more cable providers are either rolling back channel offerings or passing the higher costs along to their customers. Because there are relatively few providers in the industry, the lack of competition gives these companies an upper hand in regards to what they charge and what they offer. This can occasionally lead to customer disputes, as we saw with Dish Network in 2012, when the company attemped to drop AMC from its channel offerings. This caused significant outrage amongst its customer base—no surprise, seeing as AMC has some of the most popular shows on cable television, such as the zombie graphic novel-inspired “The Walking Dead”, “Mad Men” and “Breaking Bad.” Following a $700 million lawsuit with AMC regarding a distribution deal, Dish returned the channel to its customers.

Not to mention cost: according to market-research company The NPD Group’s “Digital Video Outlook” report in 2012, 16% of American households do not subscribe to pay-TV services. For those that do, the average television subscription for basic service plus premium channels topped $86 per month in 2011. If current trends continue—at an average of 6% increase in cable bills per year—basic TV combined with premium channels could average over $120 per month by 2015 and $200 per month by the year 2020. For now, providers such as the Dish Network and Time Warner cost approximately $19.99 (most basic) to over $35 per month for low-end subscriptions. These “deals” sometimes only last for 12 months and require that you sign a contract for 24 months upfront (and cancellation equates to a hefty fee).

With average household incomes remaining relatively stagnant and disposable income levels decreasing, cable will become prohibitively expensive for some families in the coming years. This leaves us with two options: try to negotiate for lower rates with your service provider (perhaps try the internet/television/phone bundling option for lowest rates possible) or ditch cable altogether.

Netflix 101

If you decide to ditch cable, then what? There are quite a few options available, but Netflix tends to be the most popular. An article published by Yahoo Finance in fall of 2012 reported that 25.1 million households in the U.S. subscribe to Netflix’s streaming service and 8.6 million households subscribe to the DVD-by-mail service. Each one costs $7.99 per month (it used to be DVD plus streaming, but despite customer backlash, Netflix divided the two services and charge each one separately). The video and audio quality is superb and both the website and app are easy to navigate.

Beyond the Price Tag

While Netflix is improving its streaming content availability, it is still quite limited compared to its partner DVD mail service. Still, $16 per month (cost of both Netflix services) is substantially more affordable than basic cable rates. And let’s not forgot the ease of access (Netflix can be watched on a TV, on your smartphone, on a tablet or on a laptop), fewer (if any) commercials—preferable to cable, if you don’t have DVR—and personalization of your show and movie queue. Instead of paying for channels you don’t watch, Netflix allows you to customize your queue and helps you find new shows or movies based upon your previous likes. Best of all, you’re not tied down to a long-term contract and can cancel at any time without significant termination fees.

If you’re not sure whether Netflix is right for you, sign up for a month-long free trial and try it out.

Useful Alternatives

If Netflix isn’t your cup of tea, what else is out there? Hulu.com offers an extensive assortment of television shows (and a few movies) through its unlimited streaming service for only $7.99 per month. There is also Redbox, where you can rent newly released DVDs for just $1.20 per night ($1.50 for Blu-ray), thus saving you money on movies (rather than pay several dollars extra on top of your basic cable service for premium movie channels). Amazon and iTunes also offer rental-streaming services (generally $1.99-$3.99 for movie rentals and $1.99 to purchase TV episodes).

If you want to save money on your cable bill, cutting back on premium channels by using alternative, more affordable means of viewing your favorite shows is an excellent option. Or, you can cut out your cable bills altogether and replace them with the same availability of movies and television shows through monthly subscriber services such as Netflix or Hulu. This way, you can get the same content at a fraction of the price you’d be paying a cable provider. Sign up for your Netflix trial now and get access to Non-stop family entertainment for $7.99 a month

Photo Credit: Ran Yaniv Hartstein

<

Kelly Kehoe

About Kelly Kehoe

Kelly Kehoe is a full time college student and personal finance writer. In her free time she competes in speech and debate and writes fiction. Follow Kelly @kellypkehoe or on Google+.

3 Comments

  1. Greg@ClubThrifty

    March 19, 2013 at 11:47 am

    We decided to cut out cable completely. We use Netflix, Hulu, and Amazon to get our television and it has provided us with less expense and a ton more time!

    • Kelly

      March 28, 2013 at 1:54 am

      That’s the beauty of the digital age, isn’t it? No more commercials, cheap online alternatives…the only downside is the extra hassle of getting an older TV up to date with internet-based streaming (my roommate got a Wii, so we watch Netflix through that).

  2. Pam R

    March 21, 2013 at 6:40 pm

    Great article, Kelly! We gave up pay TV 15 months ago, and have never looked back! Please see our ebook on how we did it at StopTVBills.Com.

Leave a Reply

Your email address will not be published. Required fields are marked *