Cable vs Streaming: Cut the Cord or Buy a Bundle?

The bottom line: if you are in a multi-member household and watch TV every day, you will likely save money by purchasing a Cable TV or “Smart TV” package directly from your Internet provider. Those who live alone or do not watch TV on a regular basis can save money by opting for an Internet-only plan and purchasing programs they want “a la carte” via Netflix, Amazon, and other streaming services. Keep in mind that some providers have data caps that limit the amount of content you can stream over the Internet.

When you call to order Internet service, you can pretty much guarantee that you’ll hear a sales pitch about why you should add TV, phone, and even home security to your order.

The trend towards Internet-only service has reduced cable TV subscriptions significantly in the past few years, especially among younger customers. [1] So, it’s no surprise that providers are keen to lower the rates and keep people hooked on TV.

But will cord cutting actually save you money? Actually, for many customers, bundling TV and other services from the provider <em>is</em> cheaper in some situations — it all depends how much TV you watch, and what type.

Cable and Internet Bundles: The Basics

Customers often choose bundled Interent and cable just to avoid complexity, but both options can be simple to set up.

Before jumping into the financials, here’s a quick rundown on how bundling works:

What Is Bundled Service?

“Bundled” service is the term for purchasing Internet, TV, and/or phone service all from one company.

For the customer, it’s a good deal because they lower the cost of service on bundled plans, and then you only have one bill to deal with. For Internet companies, it’s good because they get to maximize their revenue from your household.

Services You Can Bundle With Internet

Aside from TV packages and landline telephone or digital phone service, there are several other services you might want to bundle for a lower rate:

  • Home security
  • Home automation
  • Smart TV service
  • Combined Cable/Streaming service
  • Antivirus software
  • Email service

As a rule, services outside TV and phone service are often “fluff” used to add a little bit of value for customers that are on the fence. Email service in particular is something we would encourage customers to avoid using. (Mainly because it’s a pain if you move and switch providers, but still have to maintain an account with your old provider.)

Home Security Bundles: Worth Buying?

Some providers like Xfinity actually have surprisingly good home security and home automation packages — but you should only subscribe if you have researched the product and plan to actually use it.

If you are interested in trying out a home security system, signing up at the same time as you order Internet service can sometimes get you a cheaper price for the first year or so.

Again, word of caution — only bundle services that you will actually use on at least a weekly basis. If a provider is offering a bundled service for free, it will probably come with a caveat like a long contract, or a price hike after the first few months.

Cable Bundling vs Internet-Only

Netflix homepage
Netflix and other cord-cutting services make a compelling case to switch to Internet-only service.

Cable bundles make the most sense for customers who have large households or families, with everybody watching on a daily basis.

“Over the Top” (OTT) Streaming services are great, but with streaming you’re basically going “a la carte” on TV. If you only subscribe to Netflix, sure, it’ll save you money. But if you also need NFL Sunday Ticket, HBO, local sports, national sports, and etc., the cost of adding each item individually adds up fast.

Internet-only service makes the most sense for customers who only share their home network with one or two other people, and who don’t watch much TV.

Netflix and streaming services like DirecTV NOW and Sling are slim on programming compared to cable, but they have some pretty good exclusive shows (like Stranger Things) and can easily be shared between family members.

Data Caps Are an Issue for Cord Cutters

Stop sign
Data caps can make streaming less viable as a TV option for some customers, especially those using DSL or satellite Internet service.

Unfortunately, there’s a big caveat on Internet-only service: data caps.

You might also see these called “fair use policies,” “data allowances,” “data plans,” and etc. It’s all the same thing: an upward limit of how much data you can use in a month.

For the average customers, this means you can potentially run out of data if you stream HD and 4K video content day-in-day-out.

To be fair, major cable providers claim that data caps only affect 1% or less of their customer base. [ref] ↩︎[/ref] Their side of the story is that data caps are necessary to control network congestion and ensure that data-hog neighbors don’t slow down service for their neighborhood. And to be fair, a staggering 37+% of peak traffic in North America is taken up by Netflix. [2] In some cases, as much as 70% of the Internet “pipe” is taken up by streaming video.

The solution: If you plan to stream TV multiple hours per day on a high resolution widescreen TV (or more than one large TV), check if your Internet provider has a data cap. If they do, you might want to consider getting a TV bundle.

What About On-Demand and Smart TV?

As of 2018, some providers have begun cutting deals with streaming services like Netflix. This means that Netflix is sometimes bundled with your Internet service as a perk for TV customers.

To make things even more complicated, some providers have “smart TV” options that include perks like mobile viewing, extensive on-demand libraries, and other things that used to be streaming-only.

Overall, this is good news for consumers, since it means more flexible options. The trend is beneficial for customers who would have bought TV bundles anyway, since it basically throws in Netflix and streaming options for the kids, while Dad can keep watching local channels and sports just like before.

Broadcast TV for Cord Cutters

Without cable, you’ll probably have to rely on over-the-air broadcasting for your local sports and news. Broadcast TV is actually surprisingly good as of 2018, and is undergoing a bit of a renaissance as picture quality improves and window-mounted receivers become viable.

Broadcast TV used to be a pain for renters and apartment dwellers, since it required a large antenna on your roof. These days, you can just search for window-mounted models on Amazon and you’re good to go. Some of these devices are the size of a dinner plate — it’s really remarkable that they work.

You can check broadcast channels available at your address here to see what your options are.

Will Cord Cutting Save Me Money?

hand pulling money out of wallet
Cord cutting is often the best choice for younger or single customers, while families and larger households save money by opting for traditional cable bundles.

If you’re willing to compromise on the amount of shows you watch, then yes, cord cutting is the best budget deal.

Now that providers are finally starting to “sweeten the deal” on cable bundles with perks like free Netflix and on-demand content, TV bundles are a more appealing option than they used to be.

Our recommendation: if you’re on the fence, try Internet-only and see how you feel about it. You’ll almost certainly get a sales call from the provider pushing you to add TV service in the months after signing up. If you decide you want TV after all, it will likely be cheaper to call and add it on than it would be to call and cancel it.

  • Author: BroadbandNow Team
  • Last updated: 7/18/2018

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