As more consumers ditch cable TV, streaming prices keep going up

The cheapest way to watch cable TV without a cable subscription is getting more expensive.

The Sling TV video streaming service will increase the monthly price of its most basic service plan from $30 to $35 for existing subscribers, starting in late August. It’s another disappointing sign that moving cable TV service into the cloud can only do so much to keep prices in check.

When it was born six years ago, Sling TV seemed downright radical. Created by satellite TV company Dish Network, Sling TV originally cost just $20 a month, and delivered about two dozen popular cable TV channels over a high-speed Internet connection. Live TV, no cable contract required.

Rival offerings were rolled out by companies like YouTube and Hulu. At $35 to $40 a month, they offered more channels, and were still cheap enough to offer serious competition to traditional cable services. All this was happening during the first wave of “cord-cutting,” when US consumers sampled the delights of life without a monthly cable TV bill.

I figured that Sling TV and a number of similar offerings would only hasten the process.

Indeed, cable’s retreat is now a rout. Even as TV viewing surged during last year’s pandemic lockdowns, people unplugged their cable boxes at a record pace. In all, 6.2 million of us abandoned cable and satellite TV services in 2020 alone. About 90 percent of US households had cable or satellite a decade ago. Today, that number is just over 60 percent.

But Sling TV has a mere 2.4 million subscribers, and actually lost 100,000 during the first quarter of 2021. YouTube TV had 3 million subscribers as of last October and Hulu Plus Live TV has around 4 million. That means that hordes of cord-cutters aren’t signing up for any of these services.

Perhaps that’s partly because they’re not as cheap as they used to be. Even before Sling TV raised its base price, YouTube TV and Hulu Plus jacked up their rates to $65 a month.

But price can’t be the whole story. Both YouTube and Hulu Plus have attracted more subscribers than Sling TV, maybe because they offer a lot more TV shows and movies. Basic Sling TV offers 35 cable channels, but no local TV channels. Hulu has about 75 channels, and YouTube offers about 85. Both include local broadcast TV.

I’m guessing that subscribers to Internet-based cable services want an old-school experience, with plenty of channels, but at a slightly lower price. If Hulu or YouTube can save them just $10 or $20 per month, they’re happy.

But many other cord-cutters have turned their backs on the cable TV model altogether. Instead, they’re cobbling together an array of over-the-air and streaming options that don’t include traditional cable channels. For local broadcasts, all one needs is a good old rabbit-ear antenna. But about 2.7 million people have turned to the controversial Locast streaming service, which delivers local TV stations over the Internet in Boston and about three dozen other US markets. (Beware: Locast is being sued by the big broadcast networks for retransmitting their shows without permission.)

Then there are the on-demand video streaming services: Netflix, Amazon Prime, Disney Plus, ESPN Plus, Apple TV Plus, and dozens of others catering to specialized tastes, from British sitcoms to grindhouse horror. Viewers can build their own personal cable network, by subscribing to whichever they like.

Paul Erickson, a streaming industry analyst at Parks Associates, told me that nearly half of all US households subscribed to four or more of these services, paying each of them a few bucks a month. Subscribe to enough and it could cost just as much as a traditional cable bill.

And a steadily rising cable bill, at that. In January, Netflix tacked on an additional $1 a month for its basic service and $2 for its premium tier. In March, Disney Plus went up by a buck, to $7.99 a month. The sports network ESPN Plus goes up a dollar in August.

I guess we really are living in a golden age of television. Only we’re the ones providing the gold. Boston Globe