According to the Bureau of Labor Statistics, the average American watches nearly three hours of TV a day. That adds up to a whopping 45.6 days a year spent in front of the tube. It’s safe to say that television is a big source of entertainment in our society, and probably a significant consumer of our budgets, as a result.
With 2-year contracts and pricey digital packages being standard, is there still a way to significantly hack our TV budgets? Absolutely, and we’ll show you how.
TV Watching Trend
Those three hours a day of TV time are now shifting from the traditional offerings of cable and satellite to the many on-demand, streaming services available. At the end of 2015, the Pew Research Center found that 15% of Americans have made this change and it is only expected to grow from there.
This is just another industry paradigm shift, just as we have moved from CDs to Mp3s, from brick and mortar stores to online shopping, from traditional travel agencies to web booking, and from taxis to Uber and Lyft apps.
It’s easy to figure out why these shifts are happening. The middleman is being cut out and replaced with technological solutions, which offer informed consumers quick access to a product or service, at a reasonable price. In the financial services industry, these “disruptors” are your robo-advisors like Betterment and Wealthfront. In terms of cord-cutting, Hulu, Netflix, Sling, and Amazon Prime are some of the services that cord cutters are choosing.
What is Bandwidth and Why is it Important?
Don’t think that cable and satellite providers will remain silent as they lose customers and consumers start making the change. These companies can’t control where you decide to get your streaming videos, but if they also offer (or partner with) an internet service provider (ISP), they can control 1) the speed in which your content is delivered and 2) the amount of data being delivered to you.
In the past, mobile carriers like T-Mobile and streaming providers have limited their bandwidth speeds to prevent consumers from reaching their data caps. That meant both the internet service provider and streaming provider controlled the the quality of your videos (throttling) and limited the amount of content you could watch.
Net Neutrality Explained: clip from the Late Show with Stephen Colbert
These type of bandwidth limit concerns are the very essence behind many of the arguments for Net Neutrality. On June 14, 2016, the federal appellate court upheld net neutrality rules, defining ISPs as a utility.
This decision will force internet service providers to be more transparent about their pricing structure and allow streaming providers to focus on delivering content without worry about being throttled by an ISP. For the consumer, you will need to understand these details in order to continue with your cord cutting plan. Here are some of the ISP limits for the different tiers of service:
How Much Bandwidth Do I Need?
Based on the 3 hours of TV watching per day, the average American requires 180GB per month to watch HD content. That does not include usage of ISP bandwidth from your smartphone, gaming console, computer, or any other internet connected device:
- Mobile service providers advertise their data limits and most consumers “save their data” by connecting to their home wifi.
- Cable/satellite providers’ set-top boxes now use your internet to provide you with on-demand videos.
- Online gaming, web browsing, and online backups also use your data allowance.
Whether you decide to completely cut the cord or not, you need to determine how much bandwidth you require in order to decide which ISP and plan are right for you. Cox has a Data Usage Calculator that will help determine these bandwidth needs.
4 Steps to Create a Cord Cutting Plan
Once you have selected the appropriate ISP and package, you will need to create a cord cutting plan. Here’s what I suggest you do to create your own strategy:
- Take inventory of your current equipment. You may already have the tools you need. Most consumers already own a Smart TV, Xbox One, Chromecast, or a Roku. Update your devices and ensure compatibility with your prospective streaming service.
- Determine what streaming service(s) fits you. Fan.tv will help you find where your favorite movies and TV shows are streaming on.
- Netflix — $9/month. Provides a great selection of movies, previous seasons of your favorite TV shows, and exclusive content such as House of Cards and Orange is the New Black.
- Hulu Plus — $8/month. Provides current episodes and previous seasons of your favorite TV shows and a small selection of movies.
- Amazon Prime Instant Video — $99/year. Free 2-day shipping from Amazon, music streaming service, a decent selection of movies and TV shows, exclusive content such as the show Transparent.
- Sling — $20/month. Closest alternative to cable with live sports channels and other popular cable TV programming.
- Purchase additional equipment. If you don’t have any devices to watch your favorite content, here are some of the most popular devices for streaming services:
- Sign up, sign in, and enjoy.
- Wifi Signal is Important. Most streaming devices connect to your wireless router. If those devices are far from your router, it may affect your viewing experience with constant buffering. Ensure you have at least a Wireless-N Dual Band Router setup for optimal wireless transmission through your home. You may need to refer to your user manual for proper positioning.
- How to Setup Your OTA Antenna. Generally speaking, there are two types of indoor OTA antennas: uni-directional and directional. Unidirectional antennas usually do not require any adjustment once mounted. Directional antennas are usually better for areas that are far from a broadcasting tower. To adjust your directional antennas, you will need to map your location to determine what channels you would like to receive and a compass to position your antenna in the appropriate direction.
- Free devices from T-Mobile. If you would like to get rid of your home phone, but are experiencing signal issues with your cell phone at home, T-Mobile offers a wide variety of free devices to help improve your service and experience (subject to eligibility requirements). Just call 611 on your T-Mobile phone and ask the representative if you are eligible.
- Free To Air (FTA) Satellite TV for International Channels and Soccer Fans. Similar to over-the-air HDTV with an antenna, free-to-air satellite offers free international programming. Typically, such programming provided by cable/satellite providers is expensive and usually requires a high-tier plan in addition to an ethnic channel package. Many of these channels also have a wide variety of soccer game coverage. More info
- The goal for cord cutting is to control what content you want to watch by selecting the services that fit you. The total for all four streaming services above is over $45/month, which may be comparable to a cable bundle package with a DVR and all your preferred content.
- You Don’t Need All of Them — Most of these streaming services offer free trials for you to evaluate. If you don’t know which one to get, try them all!
As the quality of more streaming videos transition from 1080P to 4K, and as ISPs begin to figure out the true usage of consumer bandwidth because of net neutrality, your bandwidth needs and usage will become even more important to know and review. Keep this in mind for the next weekend you binge watch your favorite show on Netflix.Topics: Smart Spending • tech