« JC Penney’s = Perpetual SALE! | Main | Introducing the AllFinancialMatters Blog Post Directory »
Rent or Own? The New Cable Dilema
By JLP | June 7, 2007
I saw this article (free) in today’s WSJ.
Come July 1st, cable companies will be required to only offer cable boxes that accept cablecards. The cablecard will then determine the programming level for each subscriber. The reason for all ths is that the FCC wants people to be able to buy their own set-top boxes (or TVs that can use the cablecard) if they choose instead of renting them from the cable company.
I just looked at my cable bill and noticed that I am paying $7.95 per month or $95 per year for my digital box. According the article, a new box will likely retail for around $130 (the article does not specify if this is a digital box or not). Based on $130, it would take 16 months for me to break even by buying my own box instead of renting. On the other hand, a box with built in recording capability will retail for around $700, which puts the break even point even higher. I have no idea what my cable company charges for a DVR box. I’m sure it is more than $7.95 per month.
Anyway, I’ll probably continue to rent for three reasons:
1. The new boxes are hard to find won’t be available for a while.
2. If something happens to my current box, I can call Time Warner and they’ll get me a new one.
3. I have no idea how long a box should last. If a box only lasts a couple of years, it would be silly to buy one. However, if a box lasts for several years, it would make it more advantageous to buy rather than rent.
Topics: Budgeting | 18 Comments »
June 7th, 2007 at 11:01 am
The big question for me is whether a cable box with one provider will work with another if I happen to move or switch providers.
June 7th, 2007 at 11:05 am
Flexo,
According to the article, the real change is the cablecard which can be inserted and removed so it really shouldn’t matter which company you are with. You could be living in New York and move to Los Angeles and the only thing you should have to change is the cablecard.
June 7th, 2007 at 11:12 am
I will also continue to rent for the interim, but I like this idea. It would be nice to have some choice. I currently have an HD set-top box with DVR, and while it performs its basic tasks just fine, Time Warner disables some of the more advanced option.
Of course, I think the above is a sign that I’m a little too serious about my TV watching…
June 7th, 2007 at 12:11 pm
See, and that’s why I canceled my cable 5 years ago. I was too busy to watch more than a couple of shows a week. It just isn’t worth $500/year for that.
I quit cable and now I buy any movie I think I’ll watch more than once. If I don’t think I’ll watch it more than once, I don’t even bother with it. I’m thousands of dollars ahead, substantial money.
June 7th, 2007 at 12:16 pm
I’ll offer a third option: neither! A DVR is a nice piece of equipment to have, but I can’t imagine why you would rent one. Is the subscription to record from the menu really that important? Why not just set it to record at a certain time, when you know your show is on? Renting a DVR in my opinion is like renting a VCR. I’ve had my VCR for over a decade and it still works great, and I would expect my DVR to do the same (otherwise I wouldn’t buy one).
As for the cable boxes themselves, I do not have a cable box. I just plug the cable right into my TV. I get the cheapest most basic cable, yet I still get about a hundred channels that my tuner (and if I had an HD TV, my HD tuner) can accept fine. Aside from the real-time menu, I really don’t see any benefit of the box – at least not a benefit that can justify me paying extra for it. Having 200+ stations seems more like a hassle to me, as it just takes longer to find something to watch. TV doesn’t exactly put out quality material anyway, so having 200 channels compared to 100 channels doesn’t make much sense to me.
June 7th, 2007 at 12:26 pm
The HD DVR that I rent from TimeWarner (soon to be Comcast in my area) has 2 tuners that can record simultaneous premium content channels in HDTV while simultaneously allowing me to watch pre-recorded programs- something I couldn’t do without a cablecard-capable box.
I will continue to rent, because as sure as I buy one, they’ll either come out with a better box with more features or they’ll do something like switch to fiber and my box won’t be compatible without renting an adaptor.
June 7th, 2007 at 1:47 pm
Time Warner and Comcast charge the same for a regular digital box and a DVR. I just switched all (3) mine out for DVR’s.
June 7th, 2007 at 3:07 pm
I agree with Chris that the best option is to just not even get cable (I think that’s what he said). We have the most basic cable, which runs about $20 per month. Right now we have 12 months digital cable for free, but it’s worthless without the extended cable package. All we get is 10 PBS or junk channels with this box. It’s not even a regular size box.
However, doesn’t the government mandate of all cable companies on digital (not analog) mean we won’t be able to just plug the coax into our TV unless our TV has a digital converter? If it comes down to me needing to spend more just to watch what I could have gotten free (after buying a cheap antenna), then I think we’ll be renting our shows when the season is over and not paying for ANY cable TV.
June 7th, 2007 at 3:16 pm
Comcast charges me $10 extra for DVR. I think it’s a great bargain as buying the DVR capability would probably cost me about $700 (for two tuners and high definition ability).
Chris mentioned the VCR option. It’s really not comparable.
- I get a phone call, I can press pause. With a VCR it’s fumble for a blank tape, record, and then call that person back. When done talking, you need to rewind to that spot. You just lost 10-20 minutes of your time.
- VCRs don’t record high definition TV in high definition (at least none that I’ve seen do), so it wouldn’t even work in that case.
- Shows change their timeslots all the time, my DVR adjusts for that.
- VCRs will tape repeats, my DVR can skip those.
- If you tape a week’s worth of shows on a VCR, it can be difficult to watch them in the order that you want. Maybe my favorite show is on Thursday, followed by a show on Monday, etc… You find yourself jumping all over the tape. DVRs just go straight to that show.
- A player makes a great play in the football game I’m watching. I can rewind and watch it again with a DVR. With a VCR, you hope that you can catch it on YouTube in a couple of days – if you can remember to look for it.
That’s off the top of my head, but there are probably even more reasons that I missed.
As far as skipping the cable box, you might be able to get away with plugging directly in the TV. If you are in Boston and want to watch the Red Sox for the 130 games that are on NESN on Comcast, you’ll need to get a cable box. I can see why some people can skip some of the obscure channels in the 200+ range, but not getting the Red Sox in Boston? Crazy! It’s like one of the top 2-3 channels whenever a game is on.
June 7th, 2007 at 4:44 pm
Who give’s a crap about these set top boxes… what they need to do is give us the option of choosing our own programming. More that 3/4 of the programming/channels I (and even YOU!) have subcription for that we don’t care about, but ends up paying for. We need to be able to pick and choose, ala carte style, what fits out lifestyle.. and not the cable companies.
June 7th, 2007 at 5:11 pm
I know this doesn’t work for everybody, but I actually converted an older PC into my own DVR. For $150, I bought a TV Tuner and some software (in a bundle at http://www.snapstream.com) and I can set up all the shows I want to record and watch them when I want. You can set priorities so if two shows are on at the same time, it will pick one over the other, and it even can skip commercials if you’re not watching in real time. If you hook up 2 tv tuners I think you have the capability that one user mentioned where you could watch one channel and record another.
I haven’t hooked it up to a tv yet other than my 23″ LCD monitor, which it looks great on. But I don’t see why you couldn’t hook it up to a TV that accepted DVI input.
Anywho as far as renting goes, I think I’d do some homework on this one. Like you mentioned, it pays for itself in 18 months. If the models don’t change that often and you think you’d keep cable forever, it sounds like a good investment to me.
June 7th, 2007 at 7:52 pm
There’s another option outside the bounds of renting or owning a cable box.
Many new TVs have slots for CableCards — no box required. Right now, it prevents you from doing things like On Demand, but you can get all the cable channels and premium content.
June 7th, 2007 at 10:24 pm
I’m fine with “renting” our cable box since it is only $4.95 a month so I just consider it part of the overall cable price. The problem with buying your own box is that technology advances far too fast to try and save money by buying your own.
This isn’t the same as an argument between buying a home and building equity versus renting. But aside from the person with very basic cable and limited functionality needs from their cable box the technology in these things advances to the point where you can literally upgrade to something newer every six months or so.
When you get into the DVR type of boxes you are at a huge disadvantage to buy outright since storage capacity in these things is increasing significantly from year to year. If you were to spend even just $500 on a DVR box now while your cable company charges 10/month to use one of theirs, you would need to keep your box in operation for nearly 5 years in order to pay for itself. And 5 years from now who knows what kind of insane storage capacity or other features will be available.
So, I do see this move could be a disadvantage for some people with basic needs, overall I think the benefits of renting a box outweighs that of purchasing one for most people.
June 8th, 2007 at 1:21 am
oh boy…
Determining whether DVR is necessary or not is like deciding whether spending $50 on a dinner is necessary or not.
I love my DVR. Yes… It is basically like renting a VCR, but much better. It is a personal choice, and as such, I think we own have different opinions about it. You can still be frugal as long as you keep your “not necessary” expenses under a budget. Whether you spend it on movies or more cable channels or DVR boxes… It’s your choice.
June 8th, 2007 at 8:19 am
I am using Panasonic DVD recorder for 80GB drive and I pre program to record shows. If I like something I can burn a DVD also. I am using this for over 5 years and this is the best way to go. Price for this has come down to around $400 now.
June 8th, 2007 at 10:27 am
test
June 9th, 2007 at 7:25 am
We own our satellite receivers up until 2 years ago. We have a large, diverse family so we have 4 receivers. That lets us have sports, movies, cartoons and HGTV going at the same time.
The satelite company charge $5 a month access fee for the 3 extra receivers that we own. The forth owned receiver we traded for a DVR plus paid a $69 upgrade fee. We thought since we owned the first box, that the $69 would mean we own the DVR. But we now have $29 a month charges which added about $350 a year to our TV programming costs plus the $60 access fee for each of the other 3 boxes we own. The only charge I feel is fair on the DVR is the insurance on the receivers.
Can anyone tell me if it is legal to charge those access fees on owned boxes? We pay a DVR NETWORK access fee of $5, plus a leased receiver fee of $5 and a programming access fee of $5.
We have called and tried to get this straightened out and it does no good. It is like they set at the computer and come up with all the extra charges they can.
June 9th, 2007 at 11:03 am
Mark’s option is the most economical and best solution in my opinion.
I have a one time cost of ~$200 and I have a HTPC (Home Theater Personal Computer) that does everything a DVR does and then some. I currently run Microsoft Windows Media Center Edition 2005, but you can run cheaper or free alternative in Linux (Ubunutu is my fav).
Bought $40 worth of cable and connected the TV to my PC and viola!
Sure, it can’t record HD, but I’ll stomach the “normal” picture so I can save a few hundred dollars … I’d rather spend the money on something else.