Did you hear the news? Streaming TV has finally become more expensive than cable.
Recently, Gizmodo ran the numbers and concluded that if you subscribed to every streaming service collecting most of the TV shows and movies you’d likely want to see (and thus excluding niche services like horror-centric Shudder or anime-centric Crunchyroll or etc., etc., etc.), your monthly bill would be more expensive than an average cable bill on its cheapest tier.
There you have it. Cord-cutting had a good run, but it’s time to admit that the cost of all those streaming services is really adding up, to the point that you’re no longer saving money.
There’s just one problem: The passage quoted above is nearly seven years old, an ancient example of the same tired arguments we hear today. If cable has been a better deal this whole time, people wouldn’t be dropping it in record numbers.
Predictably, Disney’s plans for an October price hike have prompted yet another round of lazy takes about how streaming doesn’t save money anymore. But, now, as always, such arguments rely on false assumptions and gut feelings, not facts.
No, cable isn’t cheaper
The latest rendition of the “streaming costs add up” story comes from Financial Times, which claims that a “basket of the top US streaming services” will cost $87 per month this fall, up from $73 per month a year ago. The average cable TV bill is supposedly less expensive, at $83 per month.
Neither of those claims are true.
Let’s start with the mythical $83-per-month cable TV bill. FT doesn’t cite a source, but as Janko Roettgers points out, it likely comes from CableTV.com, which arrived at that figure by looking across hundreds of plans from the top 15 U.S. cable providers.
But scroll down CableTV’s blog post, and you’ll find an important disclaimer: The $83-per-month estimate is for introductory promo rates, and it doesn’t include sneaky fees for broadcast TV, regional sports, DVR service, and equipment rentals.
In 2019, Consumer Reports found that hidden fees increase the average cable bill by $37 per month, and they’ve only increased since then. Factor in regular rates instead of promotional ones, and cable TV’s actual cost is closer to $150 per month.
As for streaming, FT’s $87-per-month figure is based on the ad-free prices for Netflix, Disney+, Hulu, Max, Paramount+, and Peacock. But that number is also bogus.
For one thing, FT doesn’t bother bundling Disney+ and Hulu, whose ad-free plans cost $20 per month together, versus $32 per month separately. (That price will stay the same come October if you drop ESPN+ from the bundle.) It also claims that Netflix raised its price by $5.50 per month this year, when in fact it simply stopped offering its ad-free Basic tier to new customers. Existing Basic subscribers can still keep that $10-per-month plan, and Netflix’s $15.50-per-month Standard plan costs the same as it did a year ago.
If we redo the math, FT’s sample services will cost $70 per month in October, versus $65 a year ago. That’s a much less dramatic increase, and it’s still about half the cost of an actual cable TV package when you include hidden fees and non-promotional rates.
The power’s in you
Inflated numbers aside, the real problem with FT’s story—and so many others like it—is how they pretend customers have no leverage. Instead, these stories assume customers will subscribe to everything, all at once, regardless of cost.
In fact, streaming TV’s best feature is how it holds media companies accountable. Disney has every right to raise prices and cull its catalog, but customers have every right to cancel in response. That’s a big difference from the cable era, in which mandatory bundling shielded TV networks from consequences whenever they demanded higher carriage fees.
So, while the FT story assumes people will subscribe to six streaming services simultaneously, Nielsen data shows that most homes have three or fewer.
Netflix and Disney have launched ad-supported tiers for this exact reason. It’s the their only hope for reaching people who’ve otherwise spent enough. The FT story ignores those offerings entirely, even though most Hulu, Paramount+, and Peacock subscribers prefer them, and it doesn’t even mention the explosion of free viewing options for cord-cutters.
Meanwhile, analyses like these often ignore the many additional ways you can defray the cost of streaming services, including wireless carrier deals, seasonal discounts, endless promo codes, and annual billing options. In 2023, savvy cord-cutters aren’t just saving money over cable, they’re also cutting their streaming costs.
Stories like FT’s do have a kernel of truth to them: Streaming, like so much else nowadays, is getting a little more expensive, and with so many potential options, a hypothetically unrestrained viewer could spend thousands of dollars per month subscribing to everything.
But most viewers have realized they don’t need to do that, and they’re fine with taking a more judicious approach. Just because Hollywood wants the era of affordable streaming to be over doesn’t make it so.
Sign up for Jared’s Cord Cutter Weekly newsletter for more streaming TV insights.
Author: Jared Newman
Jared Newman has been helping folks make sense of technology for over a decade, writing for PCWorld, TechHive, and elsewhere. He also publishes two newsletters, Advisorator for straightforward tech advice and Cord Cutter Weekly for saving money on TV service.