John Brillhart started a company to help people cut the cord from cable and satellite providers. He thought he’d found a perfect niche as TV habits changed.
Now, two years later, Brillhart is surprised things aren’t going better for his Fridley company, Cable Alternatives. “I thought we’d be twice the size we are,” he said.
TV viewing is in decline, but the so-called “cord cutting” phenomenon isn’t growing as quickly as predicted. Cable TV firms, which provide TV to two out of three U.S. homes, are losing only about 1 percent of customers a year to internet streaming services, which were expected to be a serious threat to all forms of pay TV.
Turns out that it takes a triggering event to get people to make the cut from cable or satellite, such as a bill that exceeds a family’s budget, a service cutoff due to an unpaid bill or a terrible customer service experience.
“Most people consider the hassle of cord cutting to be too great,” said George John, professor of marketing at the University of Minnesota’s Carlson School of Management.
That may be because canceling cable or satellite service is rarely easy or quick. You could encounter an aggressive company rep who keeps sweetening the pot to prevent losing you as a customer. If you have to return set-top boxes and modems, you could find yourself standing in line. And then there’s the learning curve for new antennas, streaming devices and remotes.
Chris Marpe of Fridley said she and her family considered cutting the cord but decided against it. Instead, she negotiated a lower price of $180 a month for Comcast high-speed internet, cable, DVR rental and phone service.
“I like the easy access of turning on the TV instead of going to Hulu or Sling,” she said. She also likes recording shows on the DVR. “It’s much faster to pull them up on the DVR than on Netflix,” she said.
Telecommunications companies such as Comcast and CenturyLink also have made switching more onerous with bundling. Brillhart said many consumers mistakenly think if they drop cable, they have to change internet providers, too. They can drop any or all of the services (internet, cable, phone), but the unbundled price is likely to rise. Still, Brillhart said, subscribers can usually ask for a lower promotional rate within 90 days, and he does the negotiating at the customer’s request.
Costs vs. complaints
When Nancy Garcia and her daughter Angie of Roseville cut the cord this year, Nancy was nervous. “I’ve had cable since it first came out,” she said. “This was a big change.”
Angie encouraged her to switch after they both complained about paying more than $100 a month for TV access but rarely finding anything they wanted to watch.
Brillhart added a TV antenna to their roof, faster internet speed for streaming and monthly Netflix service, cutting their bill by more than 50 percent. “I wish we would have done it sooner,” Nancy said.
But cutting the cord has upfront costs. Twin Cities area cord cutters can pay $300 to $700 for the cost of the antenna and roof installation before they add in monthly costs for streaming or new devices. Although the initial expenses usually are offset within eight to 24 months, that leaves some consumers wary of making the change.
“A lot of people who cut the cord don’t want to pay $700 for a rooftop antenna and installation,” said Gary Uecke of Lifestyle Electronics in Chanhassen. “They see a $7 indoor antenna at Menards and don’t realize how difficult antenna installation on a roof can be. It’s an art.”
Options for sports fans
Rich Halvorsen of Plymouth cut the cord a couple of years ago, got an antenna and subscribed to Hulu and Netflix. But when he realized he couldn’t watch some programs live — especially sports — he went back to cable. “Not being able to watch the Twins was tough,” he said. He’s back to Comcast, but still not happy. “I would love not to give Comcast a dime, but I’m between a rock and a hard place,” he said.
Some sports fans can get their fix, including the Twins, with PlayStation Vue subscriptions for about $30 to $45 a month. Available in the Twin Cities area since March, it includes Fox Sports North, Fox Sports Network and several ESPN channels. But the packages still aren’t as comprehensive as Comcast’s sports offerings.
Executives at Comcast, which is the leading provider of cable TV and internet service in the Twin Cities area, say the company has made significant investments to improve its products and customer service.
“We’re on a mission to make customer service our Number 1 product,” said Jeff Freyer, Comcast’s regional vice president for the Twin Cities area. More than 300 additional customer service reps have been hired in St. Paul in 2016, and most calls are now answered in less than 30 seconds, he said.
Comcast’s chief rival, CenturyLink, is adding TV service called Prism TV in the Twin Cities area. Competition is always welcome news for consumers, but CenturyLink’s expansion has been bumpy. The Better Business Bureau of Minnesota has logged 1,150 complaints against CenturyLink in Minnesota since 2015, compared with 450 for Comcast, 300 for DirecTV and 170 for the Dish Network.
Asked about the complaints, CenturyLink spokeswoman Molly Clemen said in an e-mail, “We are committed to providing the best quality experience and will continue to work to meet and exceed our customers’ expectations in our markets.” The company also offers a 30-day money-back guarantee if a new customer completes an online form.
Brillhart estimates the average consumer can save $1,200 a year by switching from a pay TV service to on-air antenna reception and a streaming device. Even so, he’s not optimistic that the future holds a way to make cord cutting simpler.
“Cord cutting is very individualized,” he said. “What works for you to cut the cord may not work for your neighbor.”