How consumers are cutting out cable, and saving cash - FOX 10 News | myfoxphoenix.com

How consumers are cutting out cable, and saving cash

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TAMPA (FOX 13) -

Mary Feeney Mikula has pulled the plug for good.

"I don't miss cable, I'll never go back," she said. "Never."

Mikula has joined the ranks of many others who are shedding their monthly cable bills for free over-the-air television and or streaming video over the Internet. Mary's living room setup does both.

A wall-mounted indoor antenna brings in networks affiliates, such as Fox, ABC, NBC, and CBS the old fashion way, while a tiny black box called a Roku just a few feet away streams other channels, including Showtime and HBO, via the Internet.

"I dropped everything except for the Internet, and I'm saving $110 dollars a month," she said. "It's one of the best decisions I've ever made."

Although it was just a decade ago that cable was a seemingly impenetrable force in entertainment, it is no longer alone in the video entertainment marketplace. Gobs of companies are rushing into the Wild West of Internet video and channeling subscribers away from cable.

Since reaching a peak in 2009 cable subscribership has begun to decline, according to 2012 data from the Cable and Telecommunications Association.

Still, cable is far from dead.

There were 103.5 million cable television subscribers in the United States in 2012, according to the Cable and Telecommunications Association. On its website, the cable industry's lobbying group says cable television remains a better entertainment value per hour than live concerts, movies, and sporting events.

Competition for video-watching eyeballs has heated up, especially as more and more homes install high speed Internet that is capable of delivering high quality HD video. The blossoming market is crowded.

Even the infomercial guys at Telebrands Co. have a new gadget. It's called the Rabbit.

"We know how expensive cable television is," said Telebrands' Giuseppe Landolfo.

Landolfo said the Rabbit, a USB device that costs $10 per month, scours the Internet for free video and pools it into a TV guide of sorts. The Rabbit, which connects to a computer (and in turn can be displayed on a television), then directs a user to the website where the movie or show is legitimately free.

After a few seconds searching, Landolfo finds the latest episode of Fox's "New Girl." He clicks.

"It's directing you to the Fox website that has the free programming," he said. We asked whether it's stealing, like Napster of TV. "Not at all," he responds.

The Internet video revolution has its foibles. Chief among them is the lack of live broadcast television. As-it-happens network TV is the Achilles heel of the web's video rebellion. And that's where Aereo steps in.

"It's a huge shift," said Aereo founder Chet Kanojia, a former cable executive who has shaken up the industry with a brilliant and controversial solution for watching the broadcast networks over the Internet.

Kanojia says Aereo installs thousands of tiny TV antennas in a chosen city, all in one place – likely near clusters of TV station transmitters. Then, via the Internet, subscribers "rent" that antenna for a little as pennies a day. They can ever record programs they wish with a virtual DVR.

"It really changes the equation," Kanojia said. "You really just pay for what you want, as opposed to paying for 500 channels."

Newly-formed Aereo has already been forced to defend its business practices in court. And that legal battle is likely to continue in these topsy-turvy TV times.

"We think this is the starting point of something very substantial," Kanojia said.

Cable companies, which once had zero competition and therefore no pressing need to advertise, are now aggressively marketing to both keep existing customers and win back those who have cut the cord. The ads are everywhere – especially in Mary's mailbox.

"They still send me the monthly offers," she said. But Mikula said there's no way the cable company will compete with her $110 per month savings – at least not yet.

"They weren't willing to negotiate whatsoever," she said.

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