How Much Does It Cost to Cut the Cable Cord?

My Cable TV Costs Too Much

If you've had enough of paying monthly cable bills that keep going up, you're not alone. While "cord cutting" has long been one sure way for consumers to save money on utilities, recently, it's picked up steam. According to Forbes, October 2010 saw the highest number of home cable subscribers - over 105 million - nearly 90% of all U.S. homes paid for their cable subscription. But by 2023, that number fell by about half. In fact, within the first three quarters of 2024, about 5.7 million cable TV subscribers cut their cable TV cord.

Many homes have been severing their cable TV connections in favor of broadband streaming subscriptions. Video streaming services like Amazon Prime, Netflix, Disney Plus and others offer viewers a huge library of programming choices at competitive costs. In addition, about 26 million (about 20%) of U.S. households with broadband internet in 2023 also installed TV antennas to receive digital over-the-air broadcast TV for free. The irony here is that cable TV programming choices once stole viewers from broadcast TV.

Whether you're looking to cut your utility bill in your move to Georgia or you're staying put in Pennsylvania, the TV/video eco-system is quickly evolving. Many home consumers don't fully understand how much they can save by cutting the cable TV cord or what their TV/video viewing options could be.

For our analysis, we determined the average basic cable TV rate for each state by subtracting its 2024 average monthly broadband costs from its average 2023 cable and internet prices. Differences in 2023 cable tv and 2024 broadband rates proved negligible for most customers because of cable-internet provider package tiers

Key findings:

1. The average monthly cable & internet bill in 2023 was $121.80. Delaware had the most expensive ($156.00) while South Dakota had the least ($95.00)

2. Basic cable TV service in the U.S. ranges from $20 per month to $84 per month, reflecting regional costs and the effect of cable and internet service bundling.

3. Expanded basic service cable TV customers pay over $100 per month on average.

4. In 2024, broadband internet service (>35 megabits per second) cost $77.39 per month, about 63% of an average monthly cable & internet bill.

5. Consumers who cut their basic cable TV and kept their broadband connection saved an average of $44.42 (36%). Delaware consumers led with the most savings ($75.34). The District of Columbia cable customers saved the least ($2.81) due to high broadband costs but this was an outlier. The second least saving state was Montana with $11.63 (8.61%) which appears to follow the cost-saving curve more closely.

6. Most streaming service subscriptions cost less than the average monthly savings from cutting basic cable TV.

Why Do My Cable TV Costs Go Up?

While many cable TV subscribers still rely on the service to watch premium channels (HBO, Cinemas, STARZ, Paramount+, etc), most of the current price hikes cable providers pass on to cable customers come from programming costs and retransmission fees.

The 1992 Cable Act requires local cable TV providers to pay local over-the-air television networks for re-transmitting their broadcast signals to cable TV viewers. According to the Federal Communications Commission (FCC), between 2013 and 2023, the average annual increase in retransmission fees paid by cable TV providers was 27.3%. As a result, these fees have had a substantial impact on rising cable TV bills.

In 2013, the average monthly basic cable TV per subscription cost was $22.63 while expanded service was $64.41. By 2023, the average cost for basic service rose 93% to $43.77. Expanded service subscribers saw bills rise by 59% to $102.37.

But, these FCC numbers are national averages. Market analyst S&P Global points out that 6 of the 9 major cable companies raised broadcast TV fees in 2024 by 12.8%. That's about $21.48 more added onto their customers' monthly bills.

But if those increases aren't reason enough to sever your connection, there are also other costs affecting your cable bill to weigh as well.

Who Provides the Service: When it comes to cable TV, you may not have the power to choose your provider. That's because basic cable service is often regulated by local governments who make franchise agreements with only one cable TV provider. As a result, the TV cable provider operates as a de facto monopoly in most towns. Plus, these monopoly franchise agreements and basic cable service rates will vary from town to town just as they can vary from state to state.

By the same token, rural states rely on satellite TV and wireless providers for Pay-TV and internet service. This often costs more due to equipment needed to receive the satellite or cellular signal. In some cases, dumping the Pay-TV channels may not be worth the meager $12 in savings versus the programming.

Cable Box Charges: Cable subscribers may also need to lease or rent cable a cable signal converter box and remote-control unit (etc) to watch channels on their TV. Converter boxes can average about $10.00. And, with more providers now offering streaming options as well, a growing number are now requiring their customers to rent them. In addition to your streaming service subscription charges, as well as any state/local taxes, you can probably expect these charges to increase over time as your provider upgrades its converter boxes and adds more features.

Standard Definition vs High Definition: The FCC defines screen resolutions at 480i or 480p as Standard Definition. Cable and broadcast TV channels using SD usually run shows to fit that resolution; they date from before 2009. Screen resolutions at 720p or above are classed as High Definition or "HD". Roughly half the channels offered by cable TV basic and expanded services are 720p or 1080i HD. Because HD channels require more bandwidth (and energy) to carry their digital signals, it's no surprise that when cable TV providers add more 1080i HD channels, they pass those costs to their customers.

Currently, about 44% of U.S. homes now have one 4K ultra high definition (UHD) digital TV. And because their price has come way down, the popularity of 4K UHD shows how important picture quality is to viewers. Because streaming services and some live streaming sports services do, many cable TV providers are keen to offer them to their subscribers at a premium.

However, it's important to note here that the new ATSC 3.0 standard for NextGen TV which supports 4K may become the mandatory standard for cable TV providers and broadcast stations by 2030.

Ten States Where Cable Cutting Saves Most

Ten States Where Cable Cutting Saves Less

How Much Do Average States Save?

Our data shows the average US cable and internet monthly bill runs about $121.80. Customers who cut their cable TV cords saved 36.25% on average. That's about $44.42, although it must be noted that FCC January, 2024 estimates put it higher at $47.06. However, state regulations and local fees are not the same. So, while these four states share cable and internet monthly bill amounts, actual savings can vary.

Consider Your TV/Video Options

Unlike the utilities that provide essentials like heat, light, and water, people can live without cable TV. In our research, we found that cutting the cable cord saves the average cable TV subscriber $44.42 (36%). By keeping their broadband connection intact, consumers still can take advantage of a wide array of TV/video viewing options directly from internet sites, including Amazon Prime, Paramount Plus, and YouTube. You can even connect an old computer to your 4K UHD as a dedicated streaming box.

Older viewers can arguably extend these savings further by installing a TV antenna to pick up local broadcast channels for free. Following the conversion from analog to digital TV in 2009, TV stations have been able to offer more than just one station (the so-called "dot" channels). Setting up a TV antenna for free broadcast signals costs less than $100 depending on location and reception. Because the FCC reorganized the TV signal spectrum, most station signals are in the UHF bands which can be picked up with a much smaller antenna than the cumbersome VHF antennas of the past. Many can be discreetly mounted on the wall behind the TV.

Lastly, video streaming is a way to get quality programming content at HD resolution without the premium Cable TV subscription cost. Video streams can be run on cell phone or tablet apps. Specific streaming devices, like Apple TV, Google TV, Nvidia Shield, Roku, and most 4K TVs, come with internet streaming software built into them.

However, subscription tiers vary depending on whether you're willing to deal with commercials or not. For example, Amazon's streaming service is included in its Prime membership; that's $14.99 a month or $139 a year. To make it add-free, it costs an extra $2.99 a month. Similarly, Disney Plus offers its basic service subscription for $9.99/month with ads or Disney Plus Premium without ads. And, though Disney Plus bundles other programming packages together at higher costs, these cost lower than the average savings from cutting basic cable TV.

With streaming service costs in mind, it's important to point out that 34 states and the District of Columbia now impose a streaming services sales tax on service subscriptions. This came about because so many local governments are receiving less revenue through their cable provider franchise fees as more consumers shift the TV/video viewing choices. In a recent development, the U.S. Conference of Mayors asked the FCC to modify the "mixed use" rule to tax broadband revenue. Recent rulings have prevented it so far.

How Much Can Cutting the Cable Cord Really Save You?

Overall, we determined that cutting the cable TV cord for basic service currently saves the average U.S. consumer enough money to help cover the costs for one or two other video streaming services. In all but four states (Alaska, California, the District of Columbia, and Montana), basic service cable TV subscribers can save at least $25 a month when they sever their basic cable TV service.

However, the FCC found the average 2024 monthly cost for the expanded basic service tier ran about $108.41. In that case, those customers in all states see much higher savings by cutting their cable TV cord.

That all said, we did find some cost trends that consumers need to watch as the TV/video eco-system continues to evolve.

As more consumers turn to streaming, broadband costs will undoubtedly rise, particularly in high demand areas. We found that states with lower broadband costs per month tended to see some of the best savings in cable cord cutting, ranging from $39.12 to $72.04 per month. It is significant to note that almost all of the top 20 cheapest broadband states were in the upper mid west and northwest.

States with the highest broadband costs tended to be in high population areas causing highest demand: the northeast corridor states and California. So far, savings from cord cutting in these places seems to be a mixed bag. Savings ranged from $2.81 per month in the District of Columbia (highest broadband cost), to $25.92 in New York (third highest broadband cost), and on upwards to $63.65 in New Hampshire (seventh highest broadband cost).

Top Ten Cheapest Broadband States

Top Ten Most Expensive Broadband States

Methods

We determined the average basic cable TV rate for each state by subtracting its 2024 average monthly broadband costs from its average 2023 cable and internet prices. Differences in 2023 cable tv and 2024 broadband rates proved negligible for most customers because of cable-internet provider package tiers. This is evident in the wide range for basic service costs in each state.

Therefore, savings are based on cancelling the average basic cable TV monthly rate for each state. We then compared them to the monthly streaming subscriptions rates for the four leading services: Amazon Prime, Disney Plus, Paramount +, and Netflix.

References

Utility Bills 101: Average Monthly Cost of Utilities by State and Nationally

https://www.move.org/utility-bills-101/

Federal Communications Commission (FCC) 2024 Report On Cable Industry Prices

https://docs.fcc.gov/public/attachments/FCC-24-136A8.pdf

U.S. Cable & Internet Market Size and Household Spending Report 2021

https://www.doxo.com/w/insights/united-states-of-bill-pay-doxoinsights-cable--internet-report/

Cable provider coverage information and basic service price ranges from CableTV.com and BroadbandNow.com

Chicago’s Streaming Tax Is A Bad Tax But It’s Not A “Netflix Tax”

https://taxpolicycenter.org/taxvox/chicagos-streaming-tax-bad-tax-its-not-netflix-tax