Cord Cutting: How To Decide If It's Time To Ditch Cable For Streaming Video

It's the year that would-be cord-cutters have been waiting for: Finally there are options for those who wish to customize their TV experience, rather than take whatever package cable or satellite TV is offering.

Dish Network launched Sling TV in January; Sony is launching PlayStation Vue in three cities this week; Apple is reportedly bring a TV service to Apple TV this summer. HBO, CBS and even the WWE (the pro wrestling organization) have all launched standalone Web subscriptions, no cable service required.

But all of these services come at a cost, and when you start adding them all together it can easily cost as much or more than cable. So, how do you know if cutting the cable cord is right for you? It comes down to a pretty simple calculation: If you're a heavy TV viewer and like lots of options, the cable bundle is still probably the best option. But if you want a slimmed-down package with a few, but not all, options, and you're not a huge sports fan, streaming is probably right for you.

Here's how to decide:

Why To Stick With Cable

If your household prefers to watch a wide variety of content, in some cases a premium cable subscription package can provide a better value.

Take this scenario: A typical Time Warner Cable premium subscription package in New York, which includes over 200 channels, HBO and Internet, costs about $114 a month, with equipment costs for the first year, according to rates listed on the company’s website.

Creating a similar package would require subscriptions to several services: PlayStation Vue (starting at $49.99), HBO Now ($14.99/month) and Netflix ($8.99/month). Combined with a similar Internet package ($42.99, including modem rental), the total cost comes out slightly more than cable at $117, with only a fraction of the channels. And if you want ESPN, you’ll have to shell out an additional $20 a month for Dish Network’s Sling, driving the cost up even further.

This is largely due to the negotiation process between television networks and the companies offering these services. “Those channels aren't being given away by any stretch of the imagination," Greg Ireland, an analyst with International Data Corp., told Moneywatch. “Surely they are not giving discounts to these small upstarts. They will have to pay dearly to get sports channels.”

With cable you also have the ease of not needing any hardware beyond what the cable company provides to watch your preferred shows and channels on a TV set. In comparison, PlayStation Vue requires a PlayStation 4 game console, and Sling works only with Roku, Amazon Fire TV and Microsoft's Xbox One.

Why To Cut The Cord And Go Streaming

While cable offers hundreds of channels to choose from, that might not matter for most Americans. The U.S. home with a TV receives an average of 189 channels, but viewers consistently watch an average of only 17, according to a Nielsen study from 2014.

For those who can live without every channel under the sun, streaming television and on-demand video can be a much better deal. For example, subscribing to Sling TV and HBO Now comes out to about $78 with the same Internet plan, netting a savings of $36 a month compared to the $114 premium cable package. And even with the addition of Netflix it still comes out cheaper.

In addition to streaming services, TV watchers can also opt for an HD antenna, which picks up broadcasts in major metropolitan areas. You’ll still get all the basic local channels and the HD stream can often be better than cable.

So there are plenty of savings to be had, but users will need to be smart on how they combine subscription services to get the best value if they choose to cut the cord.

Take a look below for all the options you can choose from:

CBS All-Access: $5.99/month

CBS All-Access provides users with the entire back catalog of CBS classic shows as well as a number of its current series such as “The Big Bang Theory” and “Hawaii Five-O.” It also provides live CBS TV in some markets, except for NFL Sunday games due to league licensing restrictions. But at $5.99 per month, the service will be of most value to CBS fans.

NBC: $3/month

The NBC streaming service will bring comedies and shows to viewers for around $3 a month, much like the CBS All-Access model. But while it comes in much cheaper than some of the other options, it has yet to officially launch.

Noggin: $5.99/month

For the preschooler in your household, Nickelodeons' Noggin service provides ad-free shows, such as "Blue's Clues" and "Little Bear." But unlike other streaming options, it's available only through Apple's iPhone, iPad and iPod Touch.

WWE Network: $9.99/month

At $9.99 a month, wrestling fans can get access to a large on-demand library and 24/7 programming. An added perk: All 12 of WWE's pay-per-view events, such as Wrestlemania and SummerSlam, come with a subscription at no additional cost.

HBO Now: $14.99/month

If HBO programming is all you’re looking for, HBO Now will bring all of that to your iOS devices for $14.99 a month, without a bundled television subscription, starting in April. For the first three months, the service will be exclusive to Apple devices, including the Apple TV. But that isn’t precluding traditional cable companies such as Cablevision from offering the service as well.

Netflix: $8.99/month

For less than $10 a month, Netflix gives its users access to a boatload of movies, television series and original content such as “House of Cards” and “Orange is the New Black.” While more content is added each month, Netflix can often lack some of the newer content available on other services and finding the hidden gems can sometimes require the use of external guides such as Instant Watcher.

Hulu Plus: $7.99/month

If new television shows are the staple of your TV-watching experience, Hulu Plus can serve as a decent replacement, offering some of the newest episodes from major networks including Fox, NBC Universal, ABC and the CW. Its one major drawback is the number of ads that you have to sit through, regardless of whether or not you pay for the service.

Sling TV $20/month

For $20 a month, Dish Network’s Sling TV offers 17 live television channels and is the only service to also include ESPN and ESPN2. And with that price users can stream live TV on a tablet, smartphone, laptop, Xbox One and select set-top boxes such as the Amazon Fire TV and Roku. Additional channel bundles can also be added for $5 a month and fully loaded it can bring the monthly cost as high as $45.

While it’s one of the cheaper cable-free television options, the service lacks some frills of television watching such as a DVR service.

Apple Streaming TV: $30-40/month

While a full-blown Apple TV hardware replacement has yet to appear, Apple is working on developing its own TV streaming service, according to the Wall Street Journal. ABC, CBS and Fox are among some of the networks in talks with the company. But NBCUniversal is not involved. While prices haven’t been finalized, it’s expected to cost between $30 and $40 a month.

PlayStation Vue: $49.99-69.99/month

Eschewing the cable companies entirely, Sony hopes to bring not just streaming on-demand content, but live television and DVR features to its millions of PlayStation 4 users in the U.S. But at $49.99 a month, PlayStation Vue easily becomes on-par or more expensive than some cable company television packages. But sports lovers don’t get ESPN. Instead PlayStation Vue will provide Fox Sports’ offering plus regional sports channels.

For now, Vue is available only in New York, Chicago and Philadelphia, though more cities are expected to be announced later this year.

Amazon Prime: $99/year

For $99 a year, you get access to Amazon Instant Video, which also includes a large selection of HBO’s back catalog. But if the content is not necessarily to your liking, streaming music and free two-day shipping may provide more value, especially if you shop online frequently.