Wed December 29, 2010

'Cord Cutting' Could Help Bring Down Cable Bill

Originally published on Wed December 29, 2010 4:46 am



When the research firm SNL Kagan recently reported that 119,000 customers dropped their cable or satellite subscriptions in the third quarter of this year, there were headlines about how cable companies were in trouble, that the Internet had finally made it possible for consumers to get rid of costly cable bills in significant numbers - so called cord cutting.

Then, cable companies retorted that 100,000 subscribers or so is only a drop in the bucket when you consider there are about 100 million people who subscribe to cable. Still, many of us say we want to get rid of cable, even though few of us actually follow through - except for our next guest. David Katzmaier has been writing a blog, called "Diary of a Cord Cutter." He's a senior editor at CNET.com and joins us now. Welcome to our program.

Mr. DAVID KATZMAIER: Good to be here, Linda.

WERTHEIMER: So tell me why you decided to cut the cord?

Mr. KATZMAIER: It was a mutual decision between my wife and myself, and we pretty much decided we wanted to do it to save money. We have just taken on a car payment and looking at the monthly bill, the next thing to keep ourselves relatively fiscally responsible was to get rid of about $100 a month. And it turned out that that was pretty much the amount we would save if we got rid of the cable portion of our triple play and just kept the Internet and phone service.

WERTHEIMER: There do seem to be a lot of choices out there. There's Roku, Hulu Plus, Netflix. What did you do?

Mr. KATZMAIER: Well, my main strategy was to combine the over the air TV that's still available if you hook up an antenna to your digital television or a DTV receiver, with the Internet. So the services on the Internet that I checked out included Hulu.com, which is a free website. There's also Hulu Plus, which is Hulu's subscription service. And both of those offer a pretty much all the major networks except for CBS, and so all of their primetime shows.

There's also Netflix which is the standard streaming service that includes a few TV shows, but mostly movies and a lot of back catalog stuff if you're willing to wait a little bit past the release dates of, you know, current DVDs and Blu-rays.

WERTHEIMER: As I understand it, it's been about a month since you first cut the cord. What's the verdict?

Mr. KATZMAIER: Actually, I'm connected right now. So I went ahead and reconnected the cord. It's uncut at my house. Getting those shows over the Internet meant that we had to watch commercials for example. We were used to skipping them on our DVR.

My wife was not thrilled with all the different interfaces that she had to contend with. I actually left for a business trip and during that time Beth, my wife, was definitely missing the tech support for our massive technology experiment. So I was missing my sports, so I couldn't watch a local Knicks and Mets games.

But what really sold it was when I went back to my cable company and got a new package, it was significantly cheaper than before. And, you know, I cut down on a couple of my services, got rid of the premium channels, and I was really only up to about $35 a month for my TV if you factored in Internet and phone as well. So it turned out to be that $35 a month was perfectly reasonable as far as I was concerned, to keep TV on in my household.

WERTHEIMER: Do you think that cord cutting would make sense under some circumstances?

Mr. KATZMAIER: I really do think that cord cutting, if you have the right mentality about it and you know, maybe you don't watch all that much TV, you're not that into sports, maybe you're a lot more familiar with some of the Internet options out there. Those people probably have a lot better time. Of course, it also helps if your antenna reception is very good.

WERTHEIMER: Is there anything out there that's going to make it easier for people who want to cut the cord to coordinate all the material that they want to bring into their house and not have it be such a hassle?

Mr. KATZMAIER: There's no product out there that can tie together all these Internet services and an antenna, and at the end of the day, a DVR with a cable subscription is an excellent centralized way to get all of your television in one place with one remote and one interface, as opposed to, you know, trying to juggle the antenna and a bunch of these various internet services that I just described.

But with Google TV entering the market, and you know, a lot of these other alternatives that are starting to come out, I think the competition will heat up, and as a result, you'll see cable companies drop their monthly subscription fees a little bit, or start to offer fewer channels and pare back their services - maybe offer a variety of plans, as opposed to just one tier.

WERTHEIMER: Well I can think of about 75 cable channels that I'd be willing to give up. David Katzmaier, thank you very much.

Mr. KATZMAIER: Thank you, Linda, it's been a pleasure.

WERTHEIMER: David Katzmaier is a senior editor at CNET. He was the author of a blog called "Diary of a Cord Cutter." Transcript provided by NPR, Copyright NPR.

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