How to Make the Switch to Internet TV

You may have pondered the notion of dropping your cable TV service in favor of obtaining all of your TV through Internet-based services.

It seems pretty attractive, particularly when you see subscription fees for some services running around $8 to $10 a month, and your cable TV bill is at $60 to 80 a month -- more if you like premium services. But what exactly is involved in cutting the cable? Is it really going to deliver the same TV experience you want with a real savings in your pocketbook?

This experience is something that I recently walked through with my own household. Based on what I learned, here are steps to take to see if cutting the cable is right for you.

Determine Your Viewing Habits

Researching your viewing is going to help you in two ways: first, it will help you determine which Internet services offer the shows you want. Second, it will let you figure out the cost of an Internet-based offering and figure out just how much money you will spend.

Are you someone who enjoys movies and longer forms of entertainment? Then you should have no problems with making the switch. Many of the service providers offer a wide variety of movies, and it's usually easy to find an old favorite or something new to watch.

If you're an avid sports watcher, you may have more bumps to endure. In the US, professional baseball, football, basketball, and hockey all have subscription-based seasonal passes, but unfortunately blackout rules can apply, so if you live in-market for a particular team, you could find your viewing blocked. There is also the very real problem that not all of these services are available on every device on the market, and you may have to watch games on a computer. Other sports, such as NASCAR, golf, or soccer, may have to be viewed via broadcast TV or (for larger events) with a web browser.

Somewhere in between are those viewers who watch their favorite TV shows, with perhaps the occasional foray watching a premiering show or a show that their friends have recommended. Internet television is well-suited for this type of user, too, with only the occasional set of episodes unavailable for immediate viewing.

The best way to organize your research is to build a spreadsheet, listing all of the TV shows you and your family members like to watch. All of them. If your secret guilty pleasure is Cake Boss, put it on the list. If you like a particular sport, put it on the list, too. Don't track movies, however. So many services offer movies both new and old, this should not be a deciding factor.

In my spreadsheet, I set up these columns:

· Show

· Service

· Cost per season

· Cost per episode

Once each show was listed, then came the legwork. Go through all of the major services (Hulu Plus, Amazon, iTunes, and the like) and find out if episodes for that show are available and when.

"When" is very important. Because of various licensing agreements each network and production company sets up with the Internet TV services, you may get to watch a current season's episode of a show the day after it airs on cable/broadcast TV. But sometimes licensing prevents the availability of a show for weeks or months later, such as when the DVD for the whole season is released. This must be taken into account in your research. Waiting a day, or even a week, might be acceptable, but not months.

In our house, there was a bit of a split. My wife and older daughters tended to like current prime-time shows, while our youngest daughter liked kid-oriented shows like those on Nickelodeon and Disney Channel. Viacom and Disney don't run new shows in near real-time, but you can find many archived shows on Netflix. After a discussion with our daughter (for whom we are trying to limit TV viewing anyway), we all agreed that the delay would be acceptable for her.

As you discover which services offer what shows, list the services on the spreadsheet that carry the show. If the show is not available on one of the flat per-month rate services (Hulu Plus, Amazon Prime, or Netflix), then make a note of how much the show costs per episode and per season (which is often cheaper) if you buy it a la carte.

Once you have all the shows located and priced, hopefully you will have all the shows you like available on common networks. Sometimes, sadly, you won't. The CBS network, at time of press, has historically stayed away from services like Hulu PLus (though that may be changing), so if you have a favorite show on that network, you will have to wait and watch the show later on Netflix or Amazon Prime when the DVD for that season is released.

My wife's and my one guilty reality-TV pleasure has always been The Amazing Race, so this one would have to be written off.

Once the show information is gathered and your decisions made, now you can start looking at the services and their prices to see which is right for you.

When choosing your services, you must come at the problem with this goal in mind: use as few services as possible. It's the opposite approach to cable, when usually you are looking for as many channels as you can get for the lowest price.

With Internet TV, the more shows and movies you can get on a group of services, the lower your total bill will be. In my case, I was fortunate that Hulu Plus covered pretty much all of the shows my family and I liked to watch, with Netflix carrying nearly all the rest. So, that made the decision pretty simple when it came time to buy a device, since I only needed something with these two channels.

How the Services Stack Up

Hulu Plus

Price: $7.99/month

By far, Hulu Plus offers the widest selection of television shows I have seen from the major services. While CBS shows are absent from the content thus far, most of the other major networks are available, offering shows one day after they air.

This might have been a problem before the era of the DVR, when you would have to plug your ears around the water cooler to avoid spoilers, but now watching day-later episodes is not such a hassle.

There are some things to watch out for with Hulu Plus. When you research the shows you like, make sure they are not "Web Only." Some shows prevent Hulu from offering their content on set-top boxes, which means you will have to use a computer with a browser (and no, tablets and phones don't count). If that's no big deal, fine, but if you really want to watch shows on the big screen, make a note of this before you subscribe.

You should also be aware that Hulu episodes do carry advertising. Not a lot, typically 4 to 5 minutes scattered across the whole show, but it's not commercial free. (And the commercials tend to repeat a lot, which can drive you crazy.)

Finally, be sure you don't just sign up for the free Hulu service. It's okay for very casual TV watching, but for the $7.99/month, Plus is a very good value for the upgrade.

Netflix

Price: $7.99/month

The king of Internet TV streaming, Netflix pretty much catches all of the shows that Hulu Plus doesn't. In conjunction, these two channels cover nearly 90 percent of my family's TV watching.

There is, for TV shows at least, a catch. While there's a huge library of shows to watch, many are only going to be available at the time of DVD release. This sets up a small conundrum: wait and get it for free, or pay extra to watch it now?

For example, I can watch How I Met Your Mother on Netflix but it will only be the seasons up to the season that just aired. If I want the current season now, I have to purchase a season pass on Amazon or iTunes. Or wait, and it will eventually show up on Netflix as part of the subscription cost.

This decision is really up to you, but you will need to factor in the cost of your decision when you put your spreadsheet together.

Amazon/Amazon Prime

Price: Per Item; Prime $79 per year

Amazon actually offers two key Internet TV services. Anyone with a normal Amazon account can use the service to rent or buy movies and TV shows in an a la carte fashion.

But, if you opt in for the Amazon Prime service, you will have access to a fairly decent library of television shows and movies to stream free of charge. The television content works with the same kind of timing as Netflix, but if the all the shows you want to watch are on Amazon Prime's service, the $79 annual fee will save you a little money over Netflix ($16.88).

Amazon Prime's free content is still rather limited compared to Netflix, so it may not be worth the savings. If you are a big Amazon buyer, though, Prime gets you all sorts of other benefits, such as the free two-day shipping, so it could still be worth your while.

And I will confess that sometimes I will just outright rent a movie from Amazon's wide rental selection if I want to watch something newer that hasn't rolled to Netflix yet. Not great for the budget, but sometimes you gotta splurge.

iTunes

Price: Per Item

Thanks to the perseverance and legacy of the iTunes service, there is a lot of TV and movie content on the iTunes platform -- easily on a par with Amazon's digital content (and way more than what's available on Amazon Prime).

But there are two big catches here: all the content is only available on a per-item basis, so if you want it, you're buying or renting it. That can add up in a hurry.

Another big issue is the fact that you can only watch this content on iTunes-capable devices. That means Apple and Windows computers, iPhones, iPads, iPod Touches, and Apple TV. That's it. If you are a Mac household, or plan to watch the content on the go more than on TV, that may fit nicely within your lifestyle, but it is pretty limiting if you want services like Hulu Plus, which isn't available on Apple TV.

Other Considerations

First, there's the cost of the device itself, which usually ranges from $49 to $199, depending on the unit. Internet TV devices can range from dedicated set-top boxes such as the Apple TV, Boxee, or Roku; gaming consoles like the PlayStation 3 or Wii; or many "smart" TV and Blu-Ray DVD machines.

Choosing a device is going to depend on one big criterion: does it have the services you need to get the content you want? If so, then you can start comparing and price shopping. Other features to use when looking at streaming devices:

· Connectivity to the Internet. Is it WiFi-only or Ethernet? WiFi works pretty well, but there's nothing better than streaming multimedia content over a dedicated Cat5 cable.

· Capability to play other content. Some devices have a USB port and software that will let you play additional content, such as home movies, on your TV.

· High definition/Sound. This is almost a given these days, but not always. Make sure the audio and visual quality is a good as your system can handle.

One thing you may also want to purchase, if you don't have one already: a good digital antenna. If you need to watch local channels (for news, weather, or sports), it's a must. These run around $100 to $150 for a good indoor antenna.

And then there's the almost invisible cost: the subscription for the broadband Internet service itself. You're going to need at least a mid-range broadband option to bring decent streaming into your home. If the cost of better Internet service will be more than the cable company charges, then all of this is for naught. Pay very close attention to the terms of service, too. If your Internet provider has any sort of a data cap on the monthly service, you could very well find yourself TV-less around the end of the billing period.

Once you have all the costs in hand, use the spreadsheet to add them all up. Don't worry that you will have an initial outlay for the new equipment you will be buying: focus on the cost per month.

If it's under the monthly cost of your cable bill, and you can watch most if not all of your existing shows, then cutting the cable may work for you. Go out and buy the devices you selected and get started. If there are monthly savings, then you can use those to figure out how fast your equipment expenses will be offset.

If the cable bill is still more of a bargain, or if you find there are too many shows you will lose, then don't worry, because this exercise hasn't wasted your time; it's proven that cable TV will work for you and you aren't losing any savings.

Either way, it's a win.

(Author's Note: Due to several inquiries in the comments, I have added an addendum detailing my own decisions and savings in my "Open for Discussion" blog.)

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