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Posted: 6:00 a.m. Wednesday, Jan. 9, 2013

Ways to cut the cord on pay TV

DirecTV is raising rates by 4.5%. Will others follow suit?

By Clark Howard


Have you cut the cord from pay TV yet? There's increasingly more action on that front than you might think.

The latest numbers from Nielsen indicate that 5.1 million households are getting over-the-air reception and supplementing it with Internet-delivered pay programming. That trend is up by roughly 25%, according to The Wall Street Journal.

Meanwhile, the average American household pays about $800 annually for cable and around $1,000 for satellite.

Our house is like ground zero for the idea of getting rid of pay TV. We're with an expensive satellite player. I've floated the trial balloon with my wife and kids about cutting the cord entirely and they're not having it.

For me, it would be no big sacrifice because the only thing I watch on TV is the NFL. I would lose a handful of Monday night and Thursday night games, but the rest of the games are on regular network TV. I could always befriend somebody who has the NFL pay TV ticket for those Sunday games!

So people talk about cutting the cord, but it is still a trickle, not a torrent.

Pit the providers against each other

It's similar to when cell phones became ubiquitous some 10 years ago. There was a lot of talk about people cutting the landline, but it was more like a drop here and a drop there of people actually doing it. However, now that it's 10 years later, you have monopoly local phone companies reporting big loses in customer numbers every quarter.

I think it will be a similar slow progression with pay TV. For many, the process starts with cutting back on your package. It's also a great idea to shop your plan. Many people now have access to four providers --  two satellite companies, one cable company and a monopoly phone company providing TV. Pit them against each other and let them slug it out so you can get the best deal.

And remember, loyalty hurts. A new customer at any pay TV provider can get an introductory deal with a contract. But that same customer will be charged more once they're out of the promo period. So it behooves you to take your business and hop around from provider to provider.

Alternatives for a new generation

The alternatives are there. Instead of paying for TV, people who are under age 35 tend to watch Hulu, Netflix or Amazon Prime, often via a Roku player, in addition to using Redbox and Blockbuster Express for DVD rentals.

Did you know it's not uncommon for your local network affiliates offer as many as 5 different channels of programming at a time? It's not unusual for people to get 40 or 50 channels for free through the thin air using an antenna that may cost as little as $15. Visit AntennaWeb.org to check out the reception in your neighborhood.

Think about what you can do to stretch your wallet. It's entirely possible to get enormous programming plus your locals for $16 or $20 a month.