Which is Cheaper - Streaming or Buying Cable?

Many homeowners have been ditching their cable subscriptions for streaming services such as Netflix, Hulu Plus, Amazon Prime and HBO Go in order to save money. According to USA Today, about 6.5 percent of homes in the United States have removed their cable subscriptions, which is a two percent increase since 2010. Most consumers cite that the reason for cutting the cord is that many TV cable and satellite companies punish customer loyalty by raising billing prices every year. Cable companies have begun competing with streaming services to maintain their market share by providing their own streaming sites, mobile apps and DVR programming as part of subscriptions. Consumers have more choices than ever; however, the ultimate question remains whether streaming is less expensive than cable. 

Cost of Streaming Services

According to the Leichtman Research Group, 47 percent of all American households subscribe to Netflix, Hulu Plus and/or Amazon Instant Video. As of July 2014, Netflix had over 50 million U.S. subscribers according to CNN, and the streaming only service includes a range of original programing, past seasons of popular shows and a plethora of movies for $8.99 a month. Hulu Plus costs $7.99 a month and includes newer episodes of popular shows as well as past seasons from popular networks including Fox, ABC, CBS, NBC, CW, Nickelodeon, Comedy Central, Bravo, original programming and movies. Amazon Instant Video cost $100 a year with an Amazon Prime membership and includes over 150,000 movies and TV shows, unlimited music streaming and free two-day shipping on qualifying Amazon products. Two other popular streaming services include CBS All Access for $5.99 a month, which includes 15 prime-time TV shows as well past seasons from the network, and HBO Go for about $15 a month or more, which includes current and past seasons from the network. The cost of using streaming services will largely depend on how many streaming services a person subscribes to. 

Average Cost of Streaming Services:

Netflix - $8.99 a month.

Hulu Plus - $7.99 a month.

Amazon Instant Video Prime - $100 a year.

HBO Go - S15 or more per month.

CBS All Access - $5.99 per month.

Cost of Cable and Satellite TV Services

According to the Federal Communications Commission, the average cost of a basic cable subscription is $64.41, and the average cost of a basic TV satellite subscription is $61.99 excluding taxes, fees and equipment charges. The cost of a cable subscription will increase if a customer chooses a package with premium channels, sport or latino packages. It will also depend whether equipment is rented or purchased and the cost of local taxes on these types of services. On average, it may cost less to purchase streaming services; however, most cable companies bundle internet packages with cable subscriptions, which reduces the cost of cable in households with both services. It's also worth noting that cable and satellite companies typically have promotions for the first year, and customers who jump from one company to another may save money. At the same time, streaming services don't charge installation fees, which may hurt customers who switch companies frequently.

Average Cost of Cable Services:

Cable - $64.41 a month.

DirecTV - $63.99 a month.

Dish Network - $59.99 a month.

Choosing Between Streaming or Cable

Streaming services offer consumers greater flexibility than cable companies. Most streaming services don't have a contract or early termination fee, so customers are free to suspend or cancel their memberships at any time. Additionally, streaming provides a different viewing experience, and subscribers may watch all of the episodes of their favorite show in one sitting. Although cable services have been competing with this type of viewing experience by providing On Demand and DVR services, all content on streaming services is available at all times. 

One major drawback of choosing a streaming service over cable is that there is no current comprehensive sports streaming package available. As a result, sport fans may find it difficult to completely cut their cable packages since they might miss some of their games. Another drawback is if there is a problem with Wi-Fi, streaming services won't work. Streaming services also require a fast internet speed, which may increase the cost of streaming. 

Some benefits of cable include a greater selection of shows. Many consumers enjoy channel surfing, and this isn't possible with a streaming service. Most basic cable packages include major sport networks like ESPN with access to the latest NFL, MLB, NBA and NHL games; consequently, sport fans may suffer the most by getting rid of their cable services. All in all, choosing between streaming and cable to save money will depend on the type of service and what a person is interested most in watching.