1 Surprising Way That Ditching Cable Can Save You Money

You may not realize it, but when you put high-tech devices into sleep mode they still draw a fair amount of power. And the biggest sleeping guzzler in your home is your cable box. That one device can really add up on your electric bill—so maybe it's time to switch to Netflix (NASDAQ: NFLX  ) .

This thief never sleeps
According to the LA Times, California customers are bleeding through their cable boxes. That's because, on or off, they eat electricity at a rate equal to approximately $8 month. Since the average cable bill in the United States is around $80 a month, that's like increasing your cable tab by 10%. What gives? Don't the cable companies take enough money already for all those channels you don't watch?

The problem is that cable boxes are always hard at work because of hard drives, software downloads, and guide updates, among other things. You could just turn the box off, but then you'd have to reboot what amounts to a cable TV dedicated computer every time you want to watch your favorite shows. Or, you could just get rid of cable and switch to Netflix.

(Source: Netflix, via Wikimedia Commons)

Netflix sends its video streaming over the Internet, which means you don't need a cable box. Of course you do need a modem and wifi router. Those two devices use, on average, $6 ... per year. That's about $0.50 a month, to make the cable box comparison easier. That's right, getting rid of cable and switching to Netflix not only saves you around $70 on your cable bill, but it would also cut your electric bill by as much as $7.50 if you live in California.

No wonder Netflix subscriptions are up
With potential savings like that, it's no wonder that Netflix has seen its subscriptions rocket from 23.5 million streaming customers in 2011 to nearly 44.4 million in 2013. It ended the first quarter with roughly 48.4 million streaming customers. Netflix is increasingly bringing these electricity savings to the world as it expands its footprint. Foreign countries, like the United Kingdom and Germany among an expanding list of others, account for just over 25% of its subscription base.

What if you just have to have cable, though? Then you might want to talk to SolarCity (NASDAQ: SCTY  ) . SolarCity installs rooftop solar systems which could provide you with enough electricity savings to offset the cable box cost and a portion of your cable bill.

(source: ReubenGBrewer, via Wikimedia Commons)

No one needs to know you installed a SolarCity system to cut your electric bill by 20% so you could afford to keep feeding your TV addiction. Even in New Mexico, where the average electric bill was roughly $75 in 2012 (the lowest in the country), you'd easily offset the cost of running the set top box with enough savings left over for an extra premium channel or two!

Interestingly, SolarCity's customer base is growing even faster than Netflix's. Between 2009 and 2013 SolarCity grew its customer base at an astounding annualized rate of 99%. It doesn't expect that to continue, but its mid-2018 target of one million customers still implies an annualized customer growth rate of 70%.

What if you do both?
The biggest savings obviously accrue to those adventurous souls who not only cut cable and switch to Netflix, but that also install a SolarCity system. It would be an interesting research project to cross reference their customer databases! Regardless of how many people have gone for the "big money," the customer trends are pretty obvious at Netflix and SolarCity—up, up, up.

That growth could make both companies cash flow machines at some point down the line. It would occur with Netflix because adding a new customer is virtually free, and with SolarCity because it locks customers into long-term leases. If you like to save money, take a look at SolarCity and Netflix. More importantly, if you like to make money, take a look at SolarCity and Netflix.

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Reuben Brewer

Reuben Gregg Brewer believes dividends are a window into a company's soul. He tries to invest in good souls.

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