I Think Cable TV Is The Best Value and Experience For The Money Spent, Here’s Why

While many will call me crazy, (it wouldn't be the first time) I do in fact think that the $65 I spend on cable TV each month provides me with the best choice and video quality for the money spent. Of course, that's not fashionable to say as these days, the media and many in the online video industry take advantage of every opportunity they get to complain about how expensive their cable bill is or their perceived lack of content choices. But the fact is, cable TV provides an experience online video will never replace.

Of course some will be quick to comment that I sound like an out of touch cable exec or someone not watching what's taking place in the market. But the fact is, I routinely consume online video via almost thirty devices, use every online video subscription and pay-per-use service in the market and test many of these products, platforms and services before they even come to the market. I eat, sleep and breathe over-the-top video. But right now, I don't see any combination of devices, services and platforms that are even going to come close to replacing cable TV in the next few years. Disruption? Yes, but only to a limit and not replacement.

Of course some are going to point to the number of "cord cutters" and will be quick to point to stats that show these cord cutters to be in the six-figure range. Yet these same people never talk about what percentage of the overall market these cord cutters make up, which is well less than 1% of cable TV subscribers today. Of course cable TV is not for everyone and in some cases, it is a waste of money if you don't watch a lot of TV, care about sports, live news or only care about watching one or two shows. But for the vast majority of the 100 million plus cable subscribers in America, who pay on average $75 a month for their cable, they do find it worth the money.

Of course I know many will disagree with me and that's fine. I love hearing people's opinions on the topic but I can't stand the fact that right now, anyone who says they like paying their cable TV bill is thought of as someone who does not "get it". This was the same mentality that permeated the market when in 2000, the entire industry was talking about "convergence" and how in a few years the TV and Internet would be one platform. And if you didn't agree with that consensus back then, you were though of as an idiot. Yet eleven years later, all we have is a fragmented TV platform with many, many years of work ahead of us before it really comes to fruition. Lets stay grounded in reality this time.

The fact remains that for $65 a month, cable TV provides me with more content choices and better video quality than I can get online, over-the-top or via any of the online video subscription and pay-per-use services. I pay Verizon $95.99 a month for a FiOS triple play bundle of phone, 25Mbps Internet service and cable. Of that $95.99 a month, the cable portion of my bill is $57.99 a month and rounds out to around $65 with taxes. When I turn on my TV I never have to wonder what the quality will be or if I can find the show in HD. The fact is TV is convenient, it always works and that's why so many people pay for the service each month. The same can't be said for over-the-top services and other forms of online content.

The last time I went to the movies it cost $28 for two tickets. At that rate, I could go to about two movies a month with my wife, or have cable TV for 30 days. Of course lots of folks talk about over-the-top services replacing cable TV, but if I got subscriptions to Netflix, Hulu, MLB and bought two shows a week on iTunes, that would cost almost $64 a month, the same as my cable bill. And I still would not be able to get local MLB games, other live sports, news or many of the shows I want in HD.

Over-the-top video services will always be subject to potential quality issues, buffering, lack of an HD source or many of the other things that plague these Internet based services. The Internet is not capable of supporting the kind of quality and viewership that cable TV supports, period. Of course that's something that many want to debate by saying that P2P protocols or some other kind of technology will fix the problem, but it won't.

Cable is all about convenience. I have dozens of channels and hundreds of shows all in one place and many stored on my DVR. I don’t want to have to buy shows from multiple sites, or subscribe to multiple services, nor do I want to have to use my PC to find shows to send to another box connected to my TV. I want to sit down on the sofa, pick up a remote to navigate through a simple program guide and DVR interface (TiVo) to choose the shows I want to watch. Easy. I also don’t like the idea of buying or leasing episodes of a show from iTunes that I may or may not like. With cable I can simply change the channel.

I watch a lot of TV, have about 50 season passes in my TiVo and for the money I spend each month, there is no other video service that even comes close to what cable TV offers in the way of choice and quality. Some in the industry are going to say that my role in the industry is to promote the adoption of online video and the value it provides in the market. And while they are right, my first job is to set expectations properly. And today, for the average consumer, cable TV is still one of the best choices in the market for quality and convenience.

  • Hi Dan, I agree with you, but in any case online video is in to stay and grow, and definitively is giving something to probably new generations, today grounded digital natives.
    Even for me here in Argentina online video give me something that cable/sat/Iptv not, let me put this in a example.. http://shortsbay.com/film/tanghi-argentini
    I notice by skype that a US colleague of mine was watching this short film that is relative interesting for me as I’m from Argentina so I repost at my FB, so I made some viral effect of it here between my local Tango friends. Cable TV cannot do anything about that as the control is in the in cable TV program guide not at me…
    In some way -as you say- Online Video is open mainly because is trough an open network (The global/local Internet) and all the others cable/sat/iptv are closed networks, and I’m pretty sure that in the end all the “close networks” closes …
    http://en.wikipedia.org/wiki/File:Aol_subscribers_Q201-Q407.png

  • Dan you watch way too much TV.

  • Jim B.

    Dan, would it be safe to say that the OTT services can be VERY complimentary to existing cablecos and possibly be integrated to a greater degree to add value to the existing service?

  • Dan, I agree with you. I have 2 HDTVs with DirecTV HDDVR, iPad and laptop all ready to entertain me, but 9 times out of 10 I lean toward DirecTV. Some of the main factors are video quality, I can watch most shows in HD. The amount of shows are still very good and with DVR I can watch anything on my schedule.
    If I’m going to watch a clip of something then I lean to the iPad, but if it’s 30 to 60 min then back to TV.
    One thing that will help online video is to increase the end users ISP speed. If you could have a large amount of media for a user to choose and have it in HD or at least look good then it could hurt cable/Sat.
    Just about every home has at least 1 HDTV set and think people are looking for quality.

  • Yeah it’s really great. I love paying for programming I do not watch. Most of the programming these days on cable is reality programming. From Jersey Shore to the First 48 Hours to people looking for homes on HGTV. I don’t watch any of it. I don’t want to pay for E! I do not want to pay for Lifetime or Fox News. I don’t watch those channels. On top of everything else, I have to watch longer commercial breaks and at times blocks of 30 to hour long infommercials. My cable subscription is paying for these channels, SO WHY DO THEY HAVE COMMERCIALS? Don’t give me that BS about the commercials help pay for the channels. No way. Major companies own these channels and make their cash by providing the cheapest programming available. The only reason I would consider cable, is sports programming.

    …but if I got subscriptions to Netflix, Hulu, MLB and bought two shows a week on iTunes, that would cost almost $64″
    Good for you. I choose what I want to watch, and only watch Hulu. I do not like paying for something I do not want to watch. That’s what cable is all about.
    I don’t own cable. Too much money and nothing for me to watch. If I want to watch something, I watch when I want to and how I want to via Hulu, ESPN.com, or YouTube. I can’t tell you how bored on a visit to my parents, who have cable. I couldn’t find a thing to watch.

  • Dan,
    I agree with you, but only when it comes to certain providers. Fios is heads and tails above anything in the NYC area. I have had Optimum (Cablevision), Comcast, Time Warner and RCN. I was unhappy with all of them except for RCN (which I currently have) because the persistent over compression of channels caused the picture to pixelate all the time. The worst P/Q was with Time Warner.
    Even Fios has issues here in NY with obtaining carriage rights for the HD feeds of Cablevision-owned MSG Networks. Were it not for that, it would be flawless.
    Being an avid reader of many industry forums/publications/etc, I have come to conclude it was because Cable Co’s were stuffing three channels into each QAM when for true HD there should really only one be one.
    Switched digital video was supposed to correct this but I have yet to see evidence of it doing so for Time Warner Cable. Had I read this article before switching to RCN I would have grudgingly agreed with you only because of how much baseball and basketball I watch, but now I completely agree with you.
    I use just about every video streaming site I can get my grubby paws on and had actually started hatching a cable escape plan.
    I give RCN $120 a month for 2 boxes, the Lexus of cable packages they have, Tivo and 20Mbps net access. I have never been happier. My picture quality isn’t subject to blocking artifacts, my audio quality is superb and I am no longer even considering cutting the cord.

  • PC Easy –
    Commercials do not pay for the “channels.” Commercials pay for the TV show.
    Those revenues, combined with Nielsen ratings, are what pay the budget of the television show – which networks/channels pay UP FRONT, expecting the advertising to pay that budget back and return a profit. Not the “higher up” development execs (though, yes, they do make money off of it), but the writers, actors, directors, grip and lighting crew — they all benefit from commercials.
    Advertisers pay to have their products displayed during those breaks in the programming, and ratings are what show how much exposure the advertisers are getting for their purchase. If the ratings are too low, the network/channel is not going to be getting quite as much money.
    When you pay to have the Syfy channel on your TV, you’re not paying for Battlestar Galactica. You’re paying to have access to Syfy, which your cable TV pays to acquire the rights for, and pays for the equipment and expertise necessary to broadcast it to millions of people 24/7. (Simplifying this extremely, yes)
    Commercials keep the people who actually create the show in business. The only channels you wouldn’t have commercials on are the HBO/Showtime channels, which you pay extra for. And you’re paying $5-15 a month for it.
    “Why doesn’t everyone do that” — well, let’s look here:
    $65/mo: 200+ Channels. To keep this simple, that’s about $0.33 a channel. Compare that to HBO/Showtime. If everyone did it, many a channel would go under just because people couldn’t afford the luxury, and we’d be rapidly returning to 80s era TV.
    And screw that.

  • Marshall

    I think the numbers are a bit skewed in the article. 1 percent cord cutters? That’s ignoring people who cut back cable to broadcast only and those who stay with the cable company for internet. I’ve seen a lot of conflicting data on this but 1 percent is lower than even the conservative estimates that others give. Where can we find verifiable data on this including those who just trim the bill back to the least pacakge? We also need to include those dropping sat. as well since really it’s the same thing only delivered a little differently.
    Lets also add that those who don’t need or want MLB will save even more. If the cable companies didn’t force me to subsidize other peoples sports fixes then they wouldn’t be losing so many people like me.

  • Elle

    Dan, I agree in that for you, the money is justified by your extreme consumption of television. Cable is not yet out of the picture because there are enough consumers in your generation to keep it alive.
    Let me introduce you to my generation, the 20ish year olds who have built an empire on finding ways to do things inexpensively, or better yet, for free.
    We jailbreak our iPhones to send out wifi signals, share internet with neighbors, consume news content via free blogs, invented methods to burn DVDs, CDs and mp3s, and pay for cable? Hah, never.
    If we can’t find a way to get it for free, we will continue to push till it’s as inexpensive as it can be. Which is why I can stream Netflix for $8, while my parents are at Target spending $15 on a DVD. Just the beginning…

  • Ram

    Dan… I think you forgot the multiscreen dimension. The OTT is the first step.
    If you need to continue watching a movie/program as you step out of your house then you will find the value of OTT.
    OTT is not primarily for cutting cable.

  • chris

    The big problem I have with cable is that I cannot choose my cable provider. Also, I cannot choose the channels I want its an all or nothing. I want HBO, I want PBS, I want CTV, CBC, but I don’t want all the spike, slice but I do want Showcase. Online I can choose to go to CTV or Showcase, or check out netflix or rogers on demand.
    The only limitation to online right now is that if I watch a lot of shows I end up over my bandwidth limit and potentially in May this will be even worse.
    Once the limitation is lifted and more people start watching online you can then have a more social watching environment which for shows like survivor, or so you think you can dance would make the show more interesting as you could connect with others interested in the show.

  • Fuller

    Dan – You mention a few times the price point of $65/mo. for “cable”. What would be the/your breaking point in terms of price point per month to ditch “cable”? I would like to see how those numbers align.

  • @Ran – I already have the best OTT solution in the market. A Sling Pro-HD box. Full lineup of channels and control of my DVR wherever I go.
    @Fuller – For me, I am a huge Mets fan. So I would drop some other expense just to keep cable. Cable would be the absolute last thing to go. I get the more entertainment value out of cable than anything else. So I don’t think I would ever drop it.

  • Charles Q. Tran

    Cable TV Service Providers have Video on Demand and Interactive TV for a very long time but failed to capture market and customers.

  • I own a video production company, I sit in front of monitors all day long. Pretty much the last thing I want to do when I get home is watch television — there are only a few things I want/need to watch on a regular basis. I agree that OTT is not there yet, but I do wish there was another alternative. To pay $65 per month for things that I will never watch is aggravating. If I could bring my costs down with ala carte pricing, I would be much happier.

  • Dan,
    So you’re not a cord cutter and some other folks are. I’m one. Nobody’s arguing the point with you, but you knew they wouldn’t:
    http://en.wikipedia.org/wiki/Straw_man
    There is one point made that should be an article unto itself: every two to three years online video rises up and is set to take over the world. Everyone gets excited, companies get funded, online video has finally arrived! Later, it all dies down and we wait for the next cycle. Granted, online video advances a bit each time, but as you say, it will never be the cable/sat slayer.

  • Streaming Mad

    The overriding objection to cable repeated in these comments is the inability to choose. ATT UVerse’s early marketing promo was “Pay only for want you want – no more, no less…”
    I naively thought it meant what it said – ha!
    $69/mo later, I get, but don’t watch, sports, reality, fox, and about 150 other channels.
    Yes, count me among the minority who watches so little tv that cutting the cord will be easy (when I get around to actually doing it… 😉
    And no, we do NOT watch, nor care enough to ever pay for, HD.
    I appreciated the breakdown on costs, and would love to see details, or at least percentages, of who gets what, as the bulk of the money being paid is to an extremely small minority of writers/producers/actors, rather than those grips or installation techs. Follow the money.
    (btw – much of the programming is nothing more than a repackaging of someone else’s ideas…there is very little that is original – we are not even paying for creativity.)

  • Dan,
    While I agree with you, I think this is a ridiculous comparison. Just a few years ago there was no comparison. They fact that there is actually a comparison debate now shows how much online video has increased. There is no question that it has the potential to surpass cable.
    I think people still choose cable because they have big TVs in comfortable rooms. Computers are still kept in stuffy offices in the house. Once the computer is connected to their large TV in their comfortable room, a user will be more willing to use the internet from their couch.
    If the cable companies are smart, they will create online services and offer different subscriptions for internet users to compete with the online community not paying for video. That way they can keep a customer base in some form instead of losing them completely to online video.

  • @William – People have been arguing the cord-cutting point with me for a long time now. In fact, I get tons of emails and comments from folks who want to argue about it, whenever I seem to write about the topic.
    As to your point about the market setting false expectations and creating hype, I have written dedicated blog posts on that very topic point out just how dangerous I think that is.
    @Edward – I agree, I think it is a “ridiculous comparison”. But I disagree with your statement that online video “has the potential to surpass cable.”

  • @Dan – Why don’t you think online video can surpass cable? Your cable box is just a computer, especially the ones with an on-demand interface. Is it the internet connection speed that you don’t think will be able to keep up with the speed of cable/fios? I’ve got to believe that it will just keep getting better and better.

  • ChaosFreak

    I agree that cable makes sense for you, but you are an extreme case. Very few people follow 40 TV shows. Also, it seems that you do most of your TV viewing at home in front of your TV.
    The younger generation (under 30s) who will shape consumption in the coming decade watch most of their TV in multiple locations inside and outside the home.
    One point that you also missed is that with iTunes there is no question of video quality since you download the video before you watch it.

  • Marshall’s got a really good point up there. The danger to cable isn’t that people watching four hours a day are suddenly dropping service. The danger is that most people are watching less cable because they’re spending more time online. People who watched less than an hour a day are probably the ones cutting the cord.
    I’m in that category. I’m happy to contribute to the monthly cable bill while I live with two other adults. I probably won’t get cable in my next living situation because I’ll be watching NetFlix movies, NetFlix and Hulu TV shows and indie music videos on YouTube and FargoTube.
    I also appreciate HD for sports, but I usually watch with friends at their houses. Cable just isn’t worth $70 a month for me. It’s not even worth $35 a month any more.

  • Danelle

    Dan,
    You make some compelling points, but here’s my issue. I actually sell cable TV, I also have five children who have all moved out of the house. (Age ranges from 27-18.) I’m not seeing a very bright future for my business.
    Of those five kids only ONE has opted for a cable subscription. The rest watch on-line if/when they want to. They don’t show up in any market analysis as “lost customers’ because they never were independent customers (they picked up the TV habit at home when I was paying the bill) and I believe most of their friends are the same way. I’m seeing a real generational difference in TV watching. My kids don’t want to pay to sit and just “watch,” they’re used to interraction. They’d rather spend a fortune (compared to cable TV) on video game systems over a TV line-up. And when they really want to watch something it’s on Hulu! I’m beginning to experience this in my client base as well. I’m finding as consumers become younger, they’re redefining the market.

  • Marino

    For $65/mo you get only basic cable which means all the channels that interrupt programming with ads. I am so over that. I can’t watch programming with ads if you paid me $65/mo. To get the “good stuff” like Sopranos or whatever they have these days, you need to spend more like $100/mo. I’d rather wait a year and watch it on Netflix or DVD.
    No more TV for me. The only time I miss it is for some sports events that come up once every four years and aren’t available on other media. Olympics, soccer world championship. That’s it.
    For movies, episodic tv; Netflix. I don’t even use Hulu. For news the internet.
    I do have a daily paper subscription but I’d have that regardless of TV connectivity status.
    Not having TV saves so much time which I can use to post comments on blogs like yours.

  • It all comes down to the question: “On what does a consumer place value?” I know a world-class television editor who rents DVDs from his locally-owned video store (yes there are still some of those out there). He doesn’t have “TV”, whether broadcast or cable, at all and does not think he’s depriving himself, his wife, or his kid, and they agree with him.
    Now, having said this, the variety and convenience of cable is to me both appealing and beguiling. I can get the Versus coverage of the Tour de France online in a package if I want, but I have that cable channel on the tier. What about History Channel’s American Pickers? Is there an alternate source of that programming? Maybe, maybe not. What choices of programming from other sources am I giving up by opting for cable, keeping my attention on that content conduit and ignoring other possibiltities?
    And this is the crux of it, especially for us baby boomers. We’re still the “TV Generation”. Big dollar television production, and I am including the smaller cable networks, still holds sway over our entertainment dollar. Until that convenience, and yes, choice, can be reliably and delivered in an alternate fashion and perceived as great value, those of us who like this menu, will continue to pony up our $65 a month.

  • i actually resell cable tv services and can tell you from our sales numbers that internet video is certainly not replacing cable tv service anytime soon.
    also, a comment above was interesting regarding a la carte pricing…i think that is an awesome idea..or even a 100% pay-per-view service…anyways, just thought i’d leave my 2 cents..

  • FG

    lets see . basic cable 30 channels 12 of which are infomercials most of the time or just useless broadcast.
    basic plus extended A extra added 40-50 channels 25-30 of which are infomercials 75% of the day or useless broadcast to pad the channel showcase .
    basic + extended + digital 200 channels 42 of which are infomercials and another 45-50 QVC type crap Cspan 1 & 2 .
    so lets do some adding here you pay for a package of 200+ channels 100+- 150 are useless crap channel broadcast the cable companies stick into the packages to PAD the package to make it a bigger lineup offer . Some in HD but the HD look worse than video HD you get online ( on HDTV 1080p) tv with hulu plus or netflix .
    so basically your paying on average $1 per channel you can actually watch something on show or movie or documentary .
    I watch 80% of all these channels you pay for over the air digital broadcast for free and in better quality than cable can offer . I miss 0 of my shows .
    $60 vs $FREE i think Ill stick with better quality + free over $60 and crap quality.

  • I personally have the Comcast Cable setup and have been very happy with it.

  • I canceled cable in 2001, switched to rabbit ears. Anything I watched with any regularity at that time was available OTA anyway.

  • I kind of agree to you with that because I do prefer cable TV more than any other video/downloads or online video subscription…

  • TechFlex

    Maybe you pay for cable TV but rarely watch it or don’t enjoy it when you do. Some entertainment items are very quick experiences.

  • Florin S.

    I don’t know where you go to the movies for $19 dollars a ticket. I have Comcast cable and they are putting more and more ads on and pop ups ads on the bottom of the screen when a show is playing. There are more repeats than new segments of shows…I feel we are paying a lot of money to watch commercials and pop up ads.

  • Sharon J.

    I know that a lot of people complain about the cost of cable, but the truth is, it’s going to cost that much no matter what you have-dish or cable- and you really can’t beat a cable modem. I know I couldn’t live without mine!

  • Jake Ere

    I disagree almost nothing is on cable now a days and most shows are badly produced.