It's possible to cut the cord and get rid of cable without losing access to the vast majority of programming that people actually watch. You can even cut the cord and still get nearly all of the professional sports programming, which for many has been the main thing tethering them to a traditional pay-television subscription.
Big cable, of course, does not want consumers to know this because if people realize they can cut the cord without having to sacrifice much or even change their viewing habits, they probably will. That would leave Comcast, Charter, and the rest without a lucrative revenue source, in a segment of the market that they have dominated almost as a monopoly for years.
Why is big cable scared?
In the very-recent past Comcast, Charter, and the other major regional players had exclusive markets. If a rival existed at all it was either a satellite company like DISH Network (NASDAQ:DISH), which required a separate internet provider, or an off-brand interloper like Frontier Communications (NASDAQ:FTR).
Satellite took some market share from big cable -- while leaving it the ISP portion of the business -- and Frontier operated mostly by serving the customers bigger players no longer wanted. That left big cable nearly the same monopoly status it enjoyed since it was rolled out across the United States in the 1980s.
That has changed however and now anyone, not just the tech savvy, can cut the cord and get rid of cable.
How can you get rid of cable?
Given that the average American pays around $99 a month for pay television, according to NBC News, and with that price expected to continue rising, it's easy to see why people would want to avoid the cost. By bundling a couple of cable alternatives it's relatively simple for consumers to make the call and cut the cord.
The first step for cord cutters is getting a HDTV antenna. That sounds daunting, but it's really just a simple plug-in device that can sit on top of your television or be mounted on the wall. An HDTV antenna costs less than $30 and it allows you to receive over-the-air broadcast networks. In most markets that means an affiliate for each of the major networks, along with a few other channels. That can vary if you live in a rural area, but the vast majority of people can use a HDTV antenna to pull in the major networks for free.
Just doing that gives you access to prime-time network programming, Sunday NFL Football, the Olympics, and at least some games from all the major sports.
To supplement what an HDTV antenna brings you for free, consumers can add one or more streaming services. The big three, Netflix (NASDAQ:NFLX), Hulu, and Amazon all offer a selection of original shows as well as older movies and TV series for under $10 a month. Netflix is probably the strongest of the three offering a number of popular original series as well as documentaries, a talk show starring Chelsea Handler, and even its own movies.
While many people won't find it necessary, cord cutters who want live cable programming can add Sling TV, a DISH product that offers roughly 20 major cable networks for $20 a month. In addition consumers can buy $5 add-on packs in areas including family programming and sports. Sling includes ESPN, TNT, TBS, Cartoon Network, and more -- a pretty decent share of cable's top networks.
Why is this good for consumers?
Cable may offer hundreds of channels, but the ratings make it clear that only a relative handful of them actually have mass audiences. People are paying an average of nearly $100 each month to get access to a lot shows they don't watch, plus the convenience of having everything in one place.
Cutting the cord and getting rid of cable will save most consumers money. Even if you assume an individual will lose $10 in bundling savings, their average combined monthly cord-cutting expense should still be well less than what they were previously paying.
An HDTV antenna is a one-time charge (though one will be needed for each TV). If you assume the average person replaces cable with two streaming services and Sling, that's roughly $40 a month versus $99 for cable. Even when you subtract out the $10 in lost bundling savings, you still come $49 ahead each month, or $588 a year.
It's simple math. Cut the cord and get rid of cable to save money. That's bad news for Comcast, Charter, and big cable, but it's a big savings for the American public.
Daniel Kline has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Amazon.com and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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