This post is part of a longer e-book. Get it today!

This post is part of a longer e-book with updates for 2013. Get it today!

This week MediaShift will be doing a special in-depth report on cutting the cord to cable TV — who’s doing it, why and how. For background, we’re updating our special guide to cutting the cord we first published in January 2010. That post has been viewed more than 58,000 times, proving that there’s an intense interest by the public in this subject. Stay tuned all week to MediaShift for more on cutting the cord!

Background

Anyone who gets cable TV or satellite in the U.S. has noticed a pronounced trend over the years: Their monthly bill keeps going up. Sure, you can get lots of channels, plus HD channels and DVR functions, but those usually cost extra. According to research from Centris (PDF), the average digital cable bill was nearly $75 in 2009, and the average monthly satellite TV bill was $69.

However, those prices have finally started to come down a bit. According to Centris, the average cable TV bill dropped 1 percent in 2011, reaching $69.70 per month. Still, satellite TV was up 12 percent to $76.80 per month and fiber optic services were up 15 percent to $99.67 per month. Because of the growing interest in cord-cutting, cable companies have had to offer cheaper packages to keep people from jumping ship.

Still, there remains a lack of competition among cable and satellite providers, and the costs of programming keep going up. The most recent programming dustup caught NBA sensation Jeremy Lin in the cross-fire. Time Warner Cable stopped carrying the MSG Network in New York, so millions of Knicks fans couldn’t watch Lin play on cable TV. While the dispute festered, people were stuck with Time Warner Cable, because in parts of New York getting satellite service is difficult because of the tall buildings, Bloomberg reported. It took the governor of New York and the NBA commissioner to step in and finally force Time Warner and MSG to make a deal.

While there have been raging arguments over whether cord-cutting is just a techie fantasy or a real movement, Nielsen recently reported that 4.5 percent of U.S. households had only broadcast TV and broadband — without cable or satellite connections. That number rose 22.8 percent from the previous year. “Whether they’re cord-cutters or former broadcast-only homes that upgraded to Internet service, these homes represent a very small but growing group of U.S. consumers,” Nielsen reported.

Thanks to the rise of Netflix, Hulu and hardware like the Roku box and Apple TV, cutting the cord to cable TV doesn’t mean cutting yourself off from your favorite shows and channels. While past experiments at bringing together the web and TV (such as WebTV) have failed, the recent recession has pushed people to pursue their own convergence projects that enable them to watch web content on their TV. Depending on various living room setups and viewing habits, making the changeover from cable to online TV can be complex and maddening. But you’re sure to save a bundle of money.

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Hardware and Services

The first thing to do when cutting the cord is list the shows you watch regularly, and your favorite TV channels. Next, do a little online research to find out whether those shows appear on the channel’s streaming sites (such as NBC.com, CBS.com, etc.) or on Hulu, Netflix, Amazon or YouTube. Many shows on pay channels such as HBO don’t appear until much later, and usually must be bought via a service such as iTunes.

In addition to what’s available online, you might be surprised at the quality of over-the-air broadcast channels since the digital switch-over in 2009. Many newer TVs only require an antenna to get local broadcast channels, while older TVs need a converter box, which runs from $40 to $80. Plus, some of the programming includes HD content. To find out which digital channels you can get over the airwaves, input your location at the AntennaWeb site. Plus, many new HDTV sets now come with Internet connections built in (“Internet-enabled” TV), so you might not even need extra hardware such as a Roku box or Apple TV.

Below is a rundown of some of the more important elements to enjoying TV content via the web. You won’t need to get all of them, but you can mix and match those that will get you what you need. Most cable quitters find they can get about 95 percent of the TV content they used to watch on cable via the various services below.

Hardware

Roku
This is the box most cable quitters seem to like. It connects to your TV and computer network and let’s you watch Netflix, Hulu and Amazon and offers some free and pay options for additional content. Models range from $49.99 to $99.99, depending on your needs.

Apple TV
It’s basically a front-end device to iTunes, letting you download movies and music and play them through your TV. Problem: No TV tuner or DVR functionality. However, it now connects to Apple’s iCloud service so you can view your media much easier.

Viera Connect Panasonic TVs
From 32” to 65”, these TV sets come with Internet access built in. All you need to do is connect them to your WiFi network, and then you can bring up extra content through the TV remote. Content and services include Netflix, Hulu, AP, Skype, YouTube and more. Learn more about Viera Connect and its apps here.

Samsung Smart TVs
Samsung even has a Samsung App Store for all the services it offers for its line of Smart TVs. That includes Netflix, Blockbuster, Hulu, YouTube, Pandora and even Facebook and Twitter.

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Boxee box

Boxee
Boxee is a box from D-Link that lets you organize all your shows and media and watch them on your TV. You pay for the box and get the service, without a monthly fee, similar to the Roku box and Apple TV. Boxee also offers a Live TV antenna to bring in broadcast TV, as well as apps, files and web access. D-Link box is $167.99.

Digital converter box
If you want to get the digital over-the-air stations in your area, you’ll likely need an antenna for newer TVs or this box for older TVs. Cost: $40 to $80.

WD TV Live box
This small box connects your TV to an external hard drive, letting you play movies, TV shows, photos or music you have downloaded. WD TV Live comes in a regular $99 model, or a $199 model with a 1 TB hard drive included.

eyeTV hybrid
It’s a TV tuner for a Mac, letting you watch digital over-the-air channels on your Mac, or even on your iPhone with an extra $4.99 app. Cost: $149.95.

Game consoles
Netflix will let you play movies through your XBox 360 or PlayStation 3. There are also a wide variety of TV tuners and other devices that can turn game consoles into home entertainment systems.

Note: If you prefer simply connecting your computer directly to your TV set without any other hardware, you can do that, too. Here’s a great video explaining how:

Services and Sites

Netflix
The granddaddy of the DVD-by-mail services, Netflix has also become a huge entryway for people who want to dump cable and get TV shows later when they’re available on DVD. Netflix also offers unlimited streaming of some movies and TV shows, which works well with a Roku box or other Netflix-ready devices. They took a lot of flak for splitting up the streaming and DVD service, and raising the price by 60 percent, but have apologized and are ramping up original content such as new “Arrested Development” shows. Cost: $7.99/month for unlimited streaming, and $7.99/month for 1 DVD out at a time, up to $29.98/month for 4 DVDs and streaming.

Hulu
The free U.S.-only TV show service is a joint venture between NBC Universal, Fox, and Disney. You are forced to watch commercials before and during TV shows and movies. There are still commercials (you can’t skip) on its Hulu Plus premium service, which costs $7.99 per month, and has no contract. Hulu Plus includes content that’s hard to find elsewhere, like “The Daily Show” and “Colbert Report.”

iTunes
Apple’s poorly named digital media buying service started out selling music downloads. Then it added a podcast directory, and now sells TV shows and rents/sells movies. Downloading TV shows at $1.99 per episode can get pricey, though there are discounted “Season Passes” and some limited free TV show offers.

YouTube
The most popular video site on the web also can be accessed through various devices in order to view its content on your TV. These devices include the Nintendo Wii, PlayStation 3 and TiVo. Plus, now YouTube has created original content channels to keep people on the site longer.

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Amazon’s video pitch

Amazon Instant Video
Trying to compete with Netflix and iTunes, Amazon offers quick downloads of various TV shows at similar prices to iTunes. They are playable on Macs or PCs, or on devices that connect your computer to your TV. You can rent or own content for a fee, or stream it instantly. Streaming is free for Amazon Prime members who pay $79 per year, which includes free shipping from Amazon for all online purchases.

Blockbuster
The old chain of video stores has mostly moved online, and is now owned by the Dish Network. It now offers rentals by mail, in-store exchanges and some movies before you can get them on Redbox or Netflix. Plus, they also offer Blu-Ray discs and games. Cost is $9.99 for 1 DVD at a time; $14.99 for 2 DVDs at a time; and $19.99 for 3.

PlayOn
Windows software that lets you play Netflix, Hulu, YouTube, etc. from your computer on your TV via a PlayStation 3, Wii or XBox 360. Cost: $39.99 after 14-day free trial.

BitTorrent
Popular free file-sharing software for people who trade TV show and movie files. You’ll need to search your own conscience to decide whether to download copyrighted material from sites that utilize the torrent system.

Aereo
Innovative service that sets up your own mini-antenna on their servers to receive over-the-air broadcast signals, then streams them to your TV, tablet or smartphone device. Even has a “cloud DVR” so you can watch later. For now, limited to New York City, starting in March, and only offers broadcast shows. Will cost $12 per month, and has no boxes, apps or anything similar to set up.

The Public Library
As a commenter, Prashant Shah, said on the previous version of this guide: “The missing option is the public library, where I’ve always found not-so-recent shows. Newer shows you need to wait a bit, but then I’m in no hurry.” True enough. The public library in many communities offers up free borrowing of TV shows and movies on DVD. The selection can vary from library to library, but the price is right: free, as long as you return them on time.

Sample Setups

Here are a few sample setups of people who get TV content without subscribing to cable.

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Shea Rosen

Net-enabled TV + Netflix + independent ISP

Who: Shea Rosen, food technologist, Berkeley, Calif.

Setup: Panasonic Viera Connect TV; Netflix streaming; Sonic.net independent ISP

Quote: “I saved about $100/month by going from Comcast to Sonic.net; we weren’t really watching that much TV anyway. Sonic has not given me any buffering issues with Netflix and I’m able to download big files reasonably fast. It does, however, have slower uploading speeds so I have had problems (very slow) saving files to the cloud.”

eyeTV + Mac Mini

Who: Dan Milbrath, product manager, San Francisco

Setup: eyeTV hybrid to get broadcast; 2 Apple TVs; projector for movies; Netflix.

Quote: “I have made a number of updates to my setup — not all of them have worked well. I still refuse to pay for cable. I’ve got a couple of Apple TVs which seem to work pretty well for bouncing media around the loft. There are a few challenges — my over-the-air HD isn’t working at the moment due to some conflict I’m having with my iPad and the eyeTV software on it…Bottom line: my fiancee doesn’t love the fact that I have all this freakin’ technology hooked up and she still can’t watch TV. This results in my frequently sucking it up and dropping $1.99 per episode [at iTunes].”

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Dan Milbrath’s setup with eyeTV

Apple TV + Netflix + Hulu + iTunes

Who: Patrick Thornton, online journalist and editor of the Interchange Project

Setup: Apple TV, TV, streaming services such as Netflix, Hulu and iTunes.

Quote: “We cut cable a few years ago, briefly went back and got rid of it again. It’s just not worth it. Not having cable frees me up to do a lot more things in life. When I have cable, I sometimes find myself mindlessly watching it. Now all the TV I watch is done mindfully. I use a combination of Netflix, Hulu and iTunes through the Apple TV to do most of my TV watching. I love the money saved, and I love being able to watch TV on my schedule.”

Hulu + Netflix streaming + laptop

Who: Carla King, author and tech editor, Pt. Richmond, Calif.

Setup: Laptop watching Hulu; uses projector for some movies on Netflix or iTunes.

Quote: “The availability of content of all kinds on the Internet is a terrible distraction for me from tasks at hand and health in general. Whereas before I could cancel my magazine subscriptions and choose not to buy cable TV to keep myself on task with personal and professional goals, I find that today I need to develop my willpower to the utmost — especially now that they offer cheap unlimited streaming on Netflix, so I’ve been staring slack-jawed at seasons of ‘Breaking Bad’ and ‘Mad Men.’”

What’s Missing

For many people, the biggest barrier to canceling cable is the loss of live sports. While MLB.com has a package of games you can stream online, and CBS has offered a popular March Madness on Demand stream (though cable games will require authentication this year), many other leagues have been slow on the uptake. Plus, there are often restrictions and blackouts with some online season pass deals. For example, the NBA League Pass Broadband does not include nationally or locally televised games. So if you’re living in Boston, you won’t be able to see Celtics games online if they are also on TV at the same time (whether they are home or away).

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Leo Prieto

The same goes for other live events, such as awards shows. “Mainly, live TV content is impossible,” said Leo Prieto, who gave up cable in 2005. “And most of that live TV content isn’t available to download on iTunes later — for example, the Oscars or some sports event. In that case I have to go to BitTorrent and get the show afterwards. I would love iTunes or YouTube to offer live content.”

This year, the Super Bowl was offered free over streaming online, and served up millions of streams to football fans. But the experience wasn’t as good as expected, especially because the ads weren’t streamed along with the action.

In many cases, people who have canceled cable still get to see their favorite TV shows, but often much later than those with cable. If they can deal with being a bit behind, and don’t mind the tech hassle of setting up a Net-to-TV connection with gear, they’re often happy to save money and watch what they want.

More Reading

If you want to read more about cutting the cable TV cord, check out these sites and stories:

Over-the-Air TV Catches Second Wind, Aided by Web at WSJ

YouTube’s Missing Monetization Makes Its Internet TV Prospects Patchy at PaidContent

Hulu Plus Claims More Than 1.5 Million Subs; Commits $500 Million To Content In 2012 at PaidContent

Challenges Ahead Before 2012 Is The Year Of Connected TV at PaidContent

Aereo Is Not Quite Ready for Prime Time at Forbes

What Is an Internet-Enabled TV? at About.com

Cable Is Holding Web TV at Bay, Earnings Show at NY Times

5 Steps to Cutting the Cord: A Guide to Canceling Cable at GigaOm

Cord Cutters Video Show on GigaOm

The children are our future, and they don’t pay for TV at GigaOm

Time Warner Cable Loses More TV Customers, Says Web Still Can’t Substitute at AdAge

Wired’s Guide to Picking Your Perfect TV Setup at Wired Magazine

CancelCable.com

Cable Freedom Is a Click Away at NY Times

You Don’t Need Satellite TV When Times Get Tough at News.com

Cancel Cable and Save with Free Internet TV at Digital Trends

Turn On, Tune Out, Click Here at WSJ (paid subscription required)

Cancel Cable TV by Paul Kedrosky

Cable TV’s Big Worry: Taming the Web at NY Times

Who Will Win the Cable Wars? Not You. at Slate

More Fees For Broadcasters Could Hurt Cable Networks’ Growth at Dow Jones

Why the Roku Netflix Player Is the First Shot of the Revolution at NY Times

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Have I missed any important elements to cutting the cord? Have you cut the cord and if so, what’s your setup? Share your thoughts in the comments below, and I’ll update my story with any gear or services I missed.

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.