Why I cut the (cable) cord

March 20, 2012: 11:23 AM ET

Watching TV and movies at home doesn't mean having to shell out a lot for cable. At least, not anymore.

FORTUNE -- For years, access to a large selection of TV and movie content meant shelling out for cable. If you wanted premium content from channels like HBO or Showtime, there were extra fees, and if you sought to record those shows via DVR, you paid more still. When all was said and done, a cable subscription with all the fixings could cost well over $100 a month, upwards of $1,200 a year, or -- if we're talking long-term -- $12,000-plus over the course of a decade. Just for some perspective, that's dangerously close to the price of a budget car like the Kia Rio.

It should come as no surprise then that some people are kicking the cable habit altogether and seeking cheaper ways to get their content. These so-called "cord cutters" remain a small group, but they may be growing. According to a recent report from Nielsen, the number of U.S. homes that rely on the Internet and/or free, basic TV to watch video content rose nearly 23% over the past year to 4.5% -- or 5.1 million -- of all U.S. households. Conversely, the number of homes with cable dropped by more than a million during that same period. Those aren't huge numbers, but they're indicative of a subtle shift, likely due to the rise of online video streaming.

When I lived on the east coast, my monthly cable bill was absurd, swelling to more than $150 a month for features I thought I needed. A Triple Play package gave me hundreds of TV channels in standard and high-definition, a telephone land line, and broadband Internet access. I also spent on extras like HBO and DVR. But Internet aside, I didn't use some of those features enough to warrant the money, and I never watched many of the channels I paid for month-to-month. (No offense, HGTV.)  I did however, already get a lot of content from streaming services like Netflix Instant.

MORE: The mistake Netflix is making now

That's why when I moved to San Francisco last June, I cut the cord. There would be no Triple Play: no telephone landline and no cable TV. Instead, I would make a go of getting all that video online.

These days, I look to a mix of services. For TV and older movies, I use Netflix Instant and Hulu, and for newer movie releases, I go to iTunes, Amazon Instant Videos, and Vudu. Until a few weeks ago, I streamed video to my TV from my PlayStation 3; now I use the $99 puck-shaped Roku XS streaming box.

MORE: Is Amazon getting into original TV?

In some ways, I couldn't be happier -- I spend $80 less a month compared to when I had cable. I still have access to thousands of hours of movies and shows, and I can view them whenever I want. The image quality is often good, and in some cases high-definition, and I can often also watch on mobile devices like my iPhone and iPad.

I'm not going to pretend it's the ideal situation, however, because it's not. Streaming boxes like Roku, video game consoles like the PS3, and newer Web-based TV solutions like Aereo help offer cord cutters like me a vague semblance of what we gave up. Gaping content holes do remain, a problem that would likely drive avid TV watchers nuts. Maybe a particular service isn't supported on a particular box like Hulu for Apple TV. In other cases, the service itself is throttled by licensing restrictions enforced by Hollywood. Episodes don't go live on Hulu when they air: users have to wait a day, and in the case of Fox TV shows for free users, up to eight days. Meanwhile recent episodes of popular cable shows like AMC's Mad Men and HBO's Game of Thrones can only be viewed and bought a la carte or with an expensive iTunes "season pass."

MORE: 11 streaming services that want to take Netflix's crown

Whether cord cutting is a viable option all depends on how much people are willing to give up in order to save money. It doesn't mean jury-rigging a TV with a wire hanger to catch basic programming, but at the very least, there's a sacrifice in sheer convenience. If you're an avid TV watcher used to watching all your shows as they air, chances are cord cutting isn't for you. But if you're like me, and usually wait a day or two to catch up on TV, saying goodbye to cable is certainly an option. The current landscape of online streaming services still doesn't quite make up for plain old cable, but it's enough to get by.

And besides, whether cable companies like it or not,  they'll only get better.

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About This Author
JP Mangalindan
JP Mangalindan
Writer, Fortune

JP Mangalindan is a San Francisco-based writer at Fortune, covering Silicon Valley. Since joining in 2010, he has written on a wide array of topics, from the turnaround of eBay to the evolution of net neutrality. A graduate of Fordham University, Mangalindan has also written for GQ, Popular Science, and Entertainment Weekly.

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