If you’ve cut the cable TV cord or are thinking about it, you may be wondering if switching to a live TV streaming service is cheaper in 2021.
After all, YouTube TV, Hulu Live and fuboTV have recently implemented price hikes.
Live TV Streaming vs. Cable: Is It Worth the Savings?
I did the math using a real cable customer’s bill and the actual monthly savings surprised me. In this article, I’ll help you decide whether cutting the cord is worth it for you.
Let’s get started!
The Claim: Half the Price of Cable
For several years now, live TV streaming services have been advertising that they’re half the price of cable.
As of January 2021, YouTube TV’s website says it can save you $500 a year.
That savings is based on a cable TV bill of more than $100 a month. The statistic that YouTube TV cites on its website is from Leichtman Research Group.
Up to $500 savings calculated by annualizing mean reported monthly spending on pay-TV of $109.60 and subtracting the annualized $64.99 monthly base package cost of YouTube TV. Based on study by Leichtman Research Group, published November 5, 2019.
I emailed Leichtman Research Group for updated numbers. According to its latest study, average monthly live pay-TV spending in 2020 was $105.10. That’s down $4 a month from 2019.
How is that possible? The average includes all live pay-TV services, not just traditional cable and satellite TV. So cheaper live TV streaming services are included in the reporting.
The decrease in monthly spending is partially because more people are dropping cable for streaming.
Analyzing a Real Cable TV Bill
After reviewing the study from Leichtman Research Group, I needed more information to determine the actual savings of streaming vs. cable.
Next, I analyzed several cable TV bills from real customers to see what I could learn.
The bill shown below is from Xfinity. After taxes, the customer pays $150 a month for cable TV and high-speed internet. Home phone is also included, but the customer doesn’t use the landline.
As you can see, the customer is getting a $60 monthly discount as part of a two-year agreement.
Bill Breakdown
- This customer has Comcast’s Triple Play and only got the landline for a cheaper overall bundle.
- There are add-ons for HD and NFL RedZone — $10 each.
- The customer pays service fees for broadcast TV and regional sports that add up to another $22 a month.
- There are no equipment fees. This customer has their own modem and router. Otherwise, it would be $15 a month.
- Taxes are an extra $14 a month.
The sample bill is from a customer who negotiates with their cable TV provider regularly. Customers who don’t negotiate almost always pay more — sometimes up to $100 a month!
Determining the Actual Savings
Based on the bills that I reviewed recently, $150 for cable and internet is not bad. But remember the promotional rate expires in a few months.
Next, we’ll work backwards to determine the savings with live TV streaming.
First, we have to subtract the cost of internet service so that we’re only comparing the pay-TV portion of the bill.
For my research, I recently put up a poll on YouTube and asked:
If you’ve cut the cable TV cord, how much do you pay for internet service every month?
More than half of the 275 people who responded said $50 to $75 a month.
That sounds about right to me. I cut the cable TV cord more than a decade ago, and my internet-only plan is about $60 a month for 200 Mbps download speeds.
If we subtract $60 a month for internet service from the $150 Xfinity bundle, that leaves $90 a month for a live TV streaming service.
$150 Xfinity Bill – $60 for Internet Service = $90 Left for Streaming
There are many live TV options for under $90 a month. YouTube TV is the most cable-like, so we’ll use that for our sample scenario. But know that Sling TV and Philo are much cheaper.
YouTube TV’s base plan is $65 a month as of this writing, but it’s $76 with the Sports Plus add-on that includes NFL RedZone.
So if you subtract $76 from $90, that’s a $14 a month savings.
$90 Streaming Budget – $76 for YouTube TV = $14 Monthly Savings
Important: I left out taxes for this comparison. But depending on where you live, streaming services may be subject to sales or communications taxes.
The Verdict: Live TV Streaming Is Cheaper
The $14 a month streaming TV savings is hardly a great deal at first glance, but remember that the Xfinity rate includes a promotion. The customer’s bill will increase by $60 in a few months.
Take a look at it this way:
If you’re saving $14 a month, that’s $168 a year. But after the $60 price hike, you’re saving $74 a month or $888 a year!
Action Plan
If you’re in a similar situation as the customer in this example, here’s my advice:
- First, take advantage of the free trials for YouTube TV, Hulu Live and Sling TV to see if switching to a streaming service is something you would actually do.
- Then, about two months before your contract and promotional rate expires, call your cable TV provider and ask for the retention department.
- From there, tell them that you’re thinking about switching to streaming to save money when the service discount ends. Provide them with a competing offer or reference this article and the $888 savings that I calculated.
- Next, be polite and ask them to work with you on the price. If your cable provider is able to offer you a better deal, a contract may be required.
- If they can’t offer you a better deal, go internet-only when your current contract expires.
- The last thing to do after canceling cable TV is to sign up for a live TV streaming service that has all of your must-have channels.
Final Thoughts
What I learned from my research is that it’s really hard to nail down a true average price for cable TV for several reasons:
- Promo rates
- Additional fees
- Bundling of services
Your bill may be totally different from the example that I shared in this article, but I do think it’s worth the time to do the math yourself.
Price out the savings for streaming vs. cable and decide if switching is worth it for you.
Personally, I don’t think I’ll ever go back to cable TV. Aside from the monthly savings, I like that streaming services have no contracts, equipment or hidden fees.
Leave your thoughts below and check out my YouTube channel for more streaming TV content!
Hello Michael,
Love your review and they’re very insightful including your website.
I’m searching your videos and content and so far don’t see anything on skipping ads or commercials being an added value.
I had Tivo back when they started so I didn’t have to watch commercials. I recorded all shows and watch only News channels live if I had to but even then I recorded enough of a buffer to still be able to forward through commercials.
Once Comcast came out with a built in DVR I ditched Tivo and never looked back.
I’m trying to find a replacement that allows me to record all and skip commercials and I can’t so far.
YouTube had shows that I could not skip the ads or commercials (whatever we’re calling them 🙂 . Just signed up for Hulu-LiveTV-EnhancedDVR-UnlimitedStreams+Disney+ESPN but we’re finding out that we can’t record series and can’t see that far ahead. Still researching that.
Do you have thoughts on streaming services that offer a way to avoid commercials? Some say you can but not for all. Cable you can record all.
Thanks for your Time,
John Audlee
With YouTube TV, you should be able to skip ads on nearly everything as long as you add it to the DVR. The confusing part is that when you’re in the Library (DVR), it will show your recordings alongside the on-demand version, which may have ads. In limited cases networks prohibit ad-skipping with YouTube TV. As for Hulu Live, I have never paid for the upgrade, so I’ve always suffered through the ads. I will pay for the upgrade the next time I test it. Since my primary focus is saving money, I probably don’t spend enough time on this premium DVR feature and I will try to do better in the future.
Nice article, but as of October 2021 I have to respectfully disagree. $64.99 on average for Hulu or YouTube tv. You are still left having to pay for internet service. I am at $139.79 with xfinity and $90 of that is for top tier internet speed service. I have 110 channels for $49.79 tax included. The streaming TV services do not account for internet, ever in their advertising.
You are paying on the low end, and most people pay for internet no matter what. But I’m glad you’re getting a great deal!