Here’s one of my dark financial secrets: even as I write about saving money by asking for rate reductions or cancelling services you don’t use, even as I post guest entries about the evils of television, I am paying $65.82 every month for cable TV that I rarely watch.

The High Cost of Cable
Our cable television bill is $65.82 per month. That’s $789.84/year. Comcast divides these charges as follows:

  • $9.95 for a Digital Classic Package
  • $47.15 for Standard Cable (which includes Basic and Expanded Basic)
  • $5.00 for HDTV Advanced Set-Top Converter

Now $65.82 a month isn’t a fortune, but it’s a lot of money to pay for something that doesn’t get used. If we were big TV watchers maybe the cost could be justified. But we aren’t. And it can’t.

Kris watches Antiques Roadshow every week. Sometimes she watches What Not to Wear. She spends another couple hours per week watching news programs and the Food Network. (During the summer she likes to watch the home-improvement shows.) So, on average, Kris watches about 16 hours of television every month.

How much TV do I watch? None. Zero. Zip. Okay, that’s not entirely true. I probably watch an hour a month of random stuff, but usually that’s just to kill time, or to catch something special. (I watched the Oscars the other night while writing this entry.) When we signed up, I believed I would watch English Premier League football (soccer), so I “needed” Expanded Basic. I also wanted high definition channels. “High definition looks awesome!” I told Kris. She was not impressed.

In total, we probably watch 250 hours of television a year, and we pay $789.84 to do it. That’s $3.16/hour. That’s dumb. I complain about how expensive movies are, but watching television is costing us just as much. One solution, of course, is to watch more television. That would lower our cost per hour! It should be no surprise that this idea holds no charm for me.

The Magic of Netflix
Our low television-viewing numbers are deceptive. For the past four years, we’ve been active Netflix users. We’re on the $17.99/month three-at-a-time plan. For some people, this is a recipe for disaster. We know three couples who signed up for Netflix, got their three movies, and then kept these same discs for several months, continuing to pay $17.99 for the privelege. We get our money’s worth.

  • During 2004, we received 129 discs. We paid $245.68. Our cost per disc was $1.90.
  • During 2005, we received 115 discs. We paid $215.88. Our cost per disc was $1.88.
  • During 2006, we received 134 discs. We paid $215.88. Our cost per disc was $1.61.

From 2004-2006, we paid $677.44 and received 378 discs, for an average of $1.79 per disc. If you figure roughly two hours per disc, we pay $0.90/hour to watch video via Netflix. Netflix is a good deal for us.

How does this relate to television? It’s no secret that many people are beginning to abandon broadcast television in favor of DVD. In last week’s Newsweek, Devin Gordon wrote:

DVDs, meanwhile, have upended how we watch television, transforming shows from disposable weekly units into 8-, 12-, and sometimes 22-hour movies. “We get a lot of people who tell us they don’t even watch the show when it airs,” says Joel Surnow, co-creatore of 24. “They wait for the DVD and watch it all at once.”

This describes our viewing habits. Alias, The Wire, Upstairs Downstairs, Freaks and Geeks, Undeclared, Homicide: Life on the Streets, M*A*S*H, Six Feet Under, Sex and the City, Curb Your Enthusiasm, Arrested Development — we’ve watched all of these via DVD in the past few years. Getting our television programs via Netflix costs us less than a third of what it is costing us for cable.

The Future of Television
But DVD is not the way of the future — at least not our future.

Back in the dark ages — circa 2005 — we discovered that we could obtain shows from BitTorrent that we otherwise would have been unable to see. If Kris missed an episode of Lost, I could BitTorrent it. When the new Doctor Who premiered in the in the U.K., I could BitTorrent it. I wasn’t interested in pirating anything — my goal was to watch the stuff that the distribution channels were preventing us from seeing. And it worked. Kris got to keep up with Lost (she might otherwise have stopped watching the program sooner than she did), and I got to taste Doctor Who, Battlestar Galactica, and Extras long before they touched down on American soil.

Last fall I took a serious look at the television offerings available through the iTunes Music Store. This, my friends, is the future of television, at least in our household. A “season pass” for The Office, for example, costs $35 for 22 half-hour episodes (which are, in reality, 23-minutes long). That’s $3.18/hour, which is exactly the same as what we’re paying for our cable right now.

But that’s not the end of the story. For that $3.18/hour, we get to keep the episodes and watch them at our convenience. (Yes, they’re crippled with DRM, but I’m okay with that for now. I think that’s an issue that will sort itself out — in the consumer’s favor — during the next few years.) Also, minute-for-minute, the cost for hour-long programs is roughly half the cost for 30-minute programs.

There are drawbacks, of course:

  • Selection at the iTunes Music Store is limited. Want to download The Wire? I do. But we’re out of luck. HBO doesn’t have any shows in the iTunes Music Store yet. We’re forced to choose between BitTorrent or waiting who-knows-how-long for the show to be released on DVD at Netflix.
  • The files are crippled with DRM, which may cause problems for us in the future.
  • We don’t have physical copies of these shows as we would on DVD. (This is both an disadvantage and a advantage.)

We currently watch two shows via the iTunes Music Store: The Office and Battlestar Galactica. I also subscribe to Heroes because:

  1. it’s about comic book-y stuff, and
  2. it’s supposed to be good

but I haven’t watched a single episode yet. In March, when the This American Life television show starts, I’m hoping it will be available on iTunes.


This American Life teaser trailer

It’s my goal to convince Kris that we can kill the cable connection completely. I will promise to buy her anything she wants from the iTunes Music Store if we can kill the cable. Why would I make this bargain? If our cable bill costs us $789.94/year, we could take that money and purchase 22 different programs from the iTunes Music Store. There’s no way we could keep up with that many shows. We could buy anything we wanted to watch from the iTunes Music Store and still pay less than we currently spend on cable television.

(Note: After reading a rough draft of this entry, Kris agreed we could drop everything but the local channels. This will reduce our cost to $12.01/month, or $144.12/year. I’ll call the cable company tomorrow.)

A Final Option
In an ideal world, we’d have Tivo and the cable company would offer channels a la carte. Who knows? The media companies may yet be forced to do this. The iTunes Music Store certainly applies pressure in that direction.

I hope it’s clear to everyone that the best way to save money on television is not to have one. This is near-heresy in the modern age, but there are people who make this choice, and they are the better for it. I enjoy the time I spend with Kris watching movies and television programs via Netflix or the iTunes Music Store, but I recognize that these are hours that could be used more productively.

This is an example of the kind of penny-pinching I think about on a regular basis. I’m not always able to put all of my ideas into practice, but I’m hoping that this is one that’ll become reality.

GRS is committed to helping our readers save and achieve their financial goals. Savings interest rates may be low, but that is all the more reason to shop for the best rate. Find the highest savings interest rates and CD rates from Synchrony Bank, Ally Bank, GE Capital Bank, and more.

148 Comments