Things could get more expensive for cord cutters

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Cutting the cord was one of the best financial decisions I have made. Dropping the expensive $100+ cable bill put more money back in my pocket. But it was not easy as cord cutting when I first started meant relying on rabbit ears for all my content needs. And as a sports fan that limited me to the available games that I could watch.

Fast forward to now where multiple companies are out that offer streaming packages for sub $50. Sling TV was one of the first to do it but for me Youtube TV did it better. By time we got to Youtube TV most of the bugs and issues from when Sling TV first launched were resolved. Where Sling TV experienced regular outages Youtube TV have experienced minimum. So for a cord cutter life is awesome right now. In fact thanks to companies like Youtube TV and Sling TV more Americans are cutting the cord leaving big cable scrambling. So what could go wrong?

Well according to reports companies like Youtube TV are actually losing money. When Youtube TV first came on to the scene it was only $30 to subscribe, but now it will cost viewers $40 a month. Now this is still not bad considering you have more additional channels but to what point where the cost offset the benefits?

This is something that executives for the streaming companies are having to balance. Because right now it is estimated that it is costing these companies $49 a month per subscriber where Youtube TV is just now starting to charge $40 per month. That means for every subscriber Youtube TV is losing $9 per month. So if Youtube TV had just only 500,000 subs (which they likely have more) that means they would be losing 4.5 million dollars a month. And for even a company like Google (Alphabet) that is not a sustainable long term plan. Making things worse it is estimated that these network deals that Google is paying  for are expected to increase even more than the $49 (per month).

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    With the cost of network prices going up Google and other streaming services will have to figure out some way to offset the costs. If they pass on the cost to consumers eventually it will get to the point where people will go from cutting the cord to cutting the streams. People left big cable because of the $100+ bills. And with more streaming services looking to come online within the next few years to challenge Netflix, we could easily find ourselves surpassing our old cable bills in monthly streaming services. So we are going to need a solution.

My suggestion is for companies like Youtube TV to allow people to choose the channels they want. Basically they need to put these networks on blast. That way every time a network want to up their cost people can see and make the decision if it is worth supporting that particular network or not. If I can choose my channel I can save a few bucks by only choosing channels I can not get via rabbit ears and that I watch regularly.

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   Likely this hasn’t happened yet because of the contracts that networks have forced companies (like Youtube TV) to sign that offered channels as a package and not individually. Companies may be under contractual obligations to offer all or none of a bundle of network channels. Companies like Disney that own ABC, ESPN, Disney channels, and (soon to be) Fox, may forbid companies from offering only ESPN without it being packaged with a Disney channel.

But if that is not the case then it is time the strain is put back on the networks. The reason people cut the cord in the first place is they wanted the power to choose. They left big cable because they were forced to have these big packages of channels they did not watch which resulted in high cable bills. Consumers want to be able to pay for what they watch and leave what they don’t. That was the power we wanted when we decided to cut the cord and not the current path of where cutting the cord would eventually lead us down a more costly path.

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