Making the Choice – Satellite Or Cable TV?

With the move to Digital TV, right around the corner, many are making a decision regarding upgrading their TV service. The question now is what. Satellite or Cable. We here at Digital Landing try and answer some common question for those ready to make the leap

Q: What is satellite TV service? How much does it cost?
Satellite TV service gets its TV signals from satellites in geosynchronous orbit. Because they stay in the same position relative to the earth’s surface at all times, once a satellite antenna (usually, a dish of some kind) is properly aimed, it can be left as-is thereafter. Satellite signals are broadcast from a ground station to multiple satellites, which then broadcast those signals back to the earth across huge expanses of territory. Anybody with a satellite dish (the antenna), plus the proper signal processing gear (a set-top box of some kind, usually called a satellite receiver, is required for each TV set on which you want to watch the provider’s programming) that can “see” a satellite can pick up the signal. A single antenna can feed multiple satellite receivers, but a physical cable is routed from the antenna to each receiver (inside the house, both cable and satellite TV require cables for each TV set).

Satellite providers control access to their networks by including special encryption and encoding in their signals, and tightly controlling the equipment that can read and play back those signals, to prevent unauthorized users from tuning in and obtaining free TV service.

Satellite TV service costs vary, primarily according to the channels that subscribers elect to pay for. That said, both DirecTV and Dish Network (the two primary satellite providers in North America) offer basic packages for $20 to $25 per month. Add-on options for HDTV, sports channels, movie channels, and so forth usually cost anywhere from $8 to $25 per month each (or come in season-long subscriptions for sports such as NFL football, NBA basketball and so forth). Lots of bundles are available in the $30 to $55 a month range, but it’s easy to spend $100 a month or more on satellite TV services, especially if you like sports or movies, or both.

Dish Network offers equipment to subscribers at no charge, including DVR (digital video recording) or HDTV (high-definition television) receivers. DirecTV charges $99 for SDTV DVR receivers, and $299 for HDTV DVR receivers (check for rebates).

Q: What is cable TV service? How much does it cost?
Cable TV service basically entails running a physical broadband cable into your household, usually some kind of high-bandwidth coaxial cable (though some fiber-optic-based offerings are starting to become available in some markets). Cable TV companies operate various types of broadcast equipment that essentially combine hundreds of analog and digital TV channels into a single cable that can be decoded and interpreted when passed into the right kind of set-top box. Cable companies monitor the hardware attached to their networks very closely, and permit only devices with known physical hardware addresses to access their signals. Though you can buy your own cable equipment in some markets, you can’t use that equipment until the provider reads its hardware address and enables it to work with their signals. As with satellite TV, a set-top box is generally required for each TV set on which you want to watch cable TV signals, and a physical cable hook-up for each such box is also required. Most cable providers also have to ensure that individual hook-ups are “digital ready” before they can accommodate digital set-top boxes and HDTV signals.

Basic cable TV costs are generally in the same league as basic satellite TV costs–again $20 to $25 a month–but cable TV providers are subject to local fees and taxes (satellite providers are not), and you must generally rent set-top boxes from cable providers for anywhere from $3 a month per device (more for those with digital, HDTV or DVR capabilities). In general, the cable company not only controls but also owns the equipment you use to watch their programming. So, basic cable generally costs anywhere from $5 to $10 a month more than satellite for similar service, plus $3 a month and up for each set-top box you have installed. You can omit the set-top boxes on the additional TVs, but you will probably not be able to receive all the cable channels you pay for on those sets.

Q: How do the costs for cable and satellite TV service compare?
Most experts generally rule the cost equation slightly in favor of satellite, even when you have to buy the equipment you use to receive (and sometimes, to record) TV, be it standard television or HDTV. That’s because the costs of renting cable equipment generally exceed those for buying satellite equipment over time, and because the regular monthly fees and taxes that get tacked onto cable TV charges also add to the overall cost. That confers only a slight edge, however, and shouldn’t be the only factor involved in your selection.

Q: How do costs of equipment purchase compare to rental costs?
When satellite providers offer equipment at no charge, they generally require at least a one-year subscription commitment or a contract of similar duration. When they charge for the equipment, it usually costs anywhere from $49 for a basic standard TV set-top box, to as much as $299 for a set-top box that can record HDTV signals.

Cable operators generally charge $3 per set-top box per month ($36 a year) for basic standard TV devices, and up to $10 a month ($120 per year) for set-top boxes that can record HDTV signals. If you stay with either provider longer than two or three years, the satellite service costs come out somewhat lower than the cable service costs because you’ll typically pay off that equipment somewhere in the second or third year of ownership, as compared with cable TV costs. But such equipment generally needs to be replaced every five to seven years (if not more often for real equipment aficionados), so equipment costs do continue to factor into the overall burden for either type of service.

Q: What kinds of equipment are required for cable service? For satellite service?
For both services, each TV set on which you want to watch provider programming requires a set-top box of some kind, which may or may not include any or all of the following: analog TV signals (satellite is all-digital, so this applies only to cable), digital TV signals, HDTV signals, plus digital video recording for standard TV (less expensive, more hours of TV recording per device) and HDTV (more expensive, less hours of TV recording per device). Note that all HDTV programming is digital, and an increasing number of standard television channels are also digital; the FCC mandates that all U.S. TV broadcasts will be digital by February 9, 2009.

Q: What are the primary differences between cable and satellite TV services?
That’s tough to say, because the hundreds of cable TV providers that exist all have somewhat different offerings, and because even the offerings from the two primary satellite providers also differ substantially. Conventional wisdom is that satellite TV offers more and better for-a-fee sports and entertainment packages, and a broader selection of HDTV channels, while cable TV offers more and better local stations (they will often rebroadcast all of the OTA channels in a viewing area on cable, and usually operate one or more stations of their own including news, weather, and public access programming).

Look closely at the stations included in their packages, and weigh the importance of the availability of local channels when choosing between the two offerings.

Q: How many channels are typical for cable offerings? For satellite offerings?
Basic satellite offerings typically include 40 to 50 channels, and premium offerings usually include 140 to as many as 250 channels. Cable offerings typically include at least 20 basic channels, and another 50-60 standard channels, with as many as 200-300 more channels available in family, lifestyle, news and entertainment bundles, plus additional channels for HDTV, movies, sports and more.

Q: What offerings differentiate cable and satellite services? What kinds of advantages result on each side?
Satellite usually takes the edge when it comes to entertainment (movies, live concert simulcasts, and special programming) and sports (especially for “season pass” offerings for all games in sports such as football, basketball, hockey and NASCAR). Cable takes the edge in on-demand programming because the providers’ equipment infrastructure makes it easy to deliver rebroadcast of free and for-a-fee programming on demand, and to deliver pay-per-view services for movies and other premium programming.

Q: What kinds of bundled services are available from cable providers? Satellite providers? Who else gets involved?
When it comes to channel lineups, both satellite and cable providers apparently compete on the same playing field. Both offer all kinds of family channels, lifestyle channels, sport channels, news channels, movie channels and HDTV packages. Generally, cable takes the edge on local channel offerings and on-demand services, and satellite takes the edge on sports and movie packages, as well as for high-ticket pay-per-view and entertainment offerings.
These days, both cable and satellite providers offer bundles of a different kind as well. Cable companies invented the so-called “triple play” terminology, wherein they deliver television, telephone and Internet access to households on a single bill, usually at a discount from individual items on this list. Satellite companies will gladly provide the same combinations to their customers, though they must usually partner up with communications carriers for Internet and telephone services. You can get a true “triple play” from cable companies such as Time Warner or Cox, for example. If you turn to Dish Network or DirecTV for triple play, a company such as AT&T or Sprint/Nextel is also likely to be involved in delivering those services to you.

Q: Do satellite or cable providers require service contracts or commitments?
Sometimes. Satellite companies require commitments, and cable companies sometimes do. If you are simply signing up for cable TV, you most likely will not need to sign a contract. But if you bundle another service into the deal, such as phone or Internet hookup, then the company will likely have you sign a contract.However, even for satellite where a commitment is required, you can often talk your way out of contractual commitments if you can make a substantial case that you’re not getting the services you paid for, or you have legitimate reasons to be profoundly dissatisfied with those services.

Q: What happens to the provider equipment when you cancel your service?
Generally, you will be held responsible for the safe return of equipment in situations where the provider has furnished you with set-top boxes, remote controls, and so forth that it owns and you do not. That usually means you must return the equipment to them yourself, or pay for a service call to have their field service personnel come and pick the equipment up at your house. Otherwise, you will receive a bill from the provider for that equipment, and it generally includes enough zeroes to command serious attention and swift action (Author’s note: I moved recently and had to return the equipment from the old house, although I stayed with the same provider. Thirty days after the move, a bill for $700 for a digital and an analog set-top box and remotes showed up, and spurred immediate action to avoid potential credit problems that might have otherwise resulted).

Q: How does service availability differ for cable and satellite? What effects does this have on my TV signal?
The biggest difference between cable and satellite is availability. Cable is available only in neighborhoods where the provider can run a cable into your home. Satellite is available anywhere you can put an antenna that can “see” one of the satellite provider’s satellites in orbit (this does require a line of sight to that satellite). In most metro areas, cable is a viable option and worth comparing to satellite. In most rural areas, satellite is the only option, because cable isn’t available.

Whether you set up your satellite dish in an urban, suburban or rural setting, a clear line of site to the satellite from the dish is an absolute must. In some cases, trees or other buildings may partially obscure that line of sight, and will have a negative effect on signal quality. That can be particularly vexing when the weather gets bad, and high winds move trees into the line of sight when they’re not ordinarily a problem. Be sure to get the dish situated with the clearest possible line of sight to the satellite, to minimize the effects of weather or obstructions, occasional or otherwise.

Q: How do high-definition TV (HDTV) offerings from satellite and cable providers compare? Who’s got the edge?
For both types of providers, you must usually obtain HD-capable set-top boxes to permit you to view HDTV signals in the first place. This will usually add to your recurring monthly equipment costs (cable or satellite) or equivalent purchase costs (satellite). Then, you must sign up for one or more HDTV packages so you will have some HD programming to watch. From both types of providers, you can sign up for various types of HD programming (basic HDTV package, HD movies, HD sports, on-demand or pay-per-view HD programming). Generally, most cable stations top out on HD channels somewhere between 80 and 120 stations; both major satellite providers offer 140 HD stations or more. Note that these stations are split among various channel packages, so there will be extra fees to obtain most or all of them). Therefore, satellite has the HD edge right now.

Q: How does installation compare for cable versus satellite?
When it comes to cable, installation generally comes as part of initial account set-up. The cable company generally sends an installer out to make sure the cable is hooked up and working properly at all outlets when you establish your account. Generally, there is no extra charge for that service. You can return to a local cable provider office to swap out equipment after the initial set-up.

Satellite can be a different matter. Though most account set-ups have an option for professional installation, charges can be associated with that service. Still, it is strongly recommended to have antennas, cables and set-top boxes professionally installed, charges or not. Sometimes, satellite providers waive installation fees as part of promotional campaigns, or in return for longer-term account commitments. Check the terms and conditions carefully, and ask about installation and set-up as part of your overall background research before making any account commitments. If anything, installation is even more important for satellite than for cable; proper antenna positioning and aiming is key to obtaining the best possible signal.

Q: How do service and support compare for satellite vs. cable? Which of the two experiences more outages?
According to JD Power and Associates, satellite customers consistently rank both major satellite providers as among the best of all companies when it comes to service and support. Cable providers fare worse, typically receiving grades in the fair to poor range from the majority of customers. Also, cable operators report outage rates of 3 percent nationwide, while satellite providers report outage rates of less than 1 percent. Most experts agree that satellite beats cable when it comes to customer support and service and in terms of overall uptime and availability.

Q: Does digital TV matter more for cable or satellite service?
Because satellite TV is all digital, and cable can deliver both digital and analog TV across its broadband infrastructure, you might say that digital TV matters more for satellite. Also, FCC requirements that all broadcast signals be digital by February 9, 2009, don’t apply to cable because cable signals aren’t broadcast over the air in a conventional sense. Most cable companies are converting aggressively anyway because of the higher quality and easier manageability of digital as opposed to analog technologies. Because HD is digital by definition and most of the growth and innovation is occurring in this area, the marketplace is driving cable companies to be as capable and competitive in digital programming as the satellite companies.

Q: How does local channel access compare for satellite versus cable?
Normally, cable companies make arrangements with all local broadcast television stations to carry their signals on cable wherever they offer cable services to their customers. Local access on satellite varies to a great extent, so that you can expect access to local channels in most metropolitan areas, but station availability in rural areas will depend on what stations are active in the broadcast area, and whether or not the satellite company has made arrangements to pick up and include the signal feed from those stations in the satellite feed available through your antenna. Often, local channel access will be same for both systems; in some cases, cable may carry more or all of the local channels, whereas satellite may carry only a few or some of those same channels.

Q: What does it cost to add sets for cable TV service? For satellite TV service?
Most cable TV service offerings add an additional charge for each set-top box you use, and additional costs apply for digital signals (including for HDTV channels) and for DVR capability. Costs start at $3 a month or so for set-top boxes, and go up as you add features and digital support. Most satellite TV service offerings include up to four hook-ups in the basic service cost. Often, that’s because you must purchase your own set-top boxes and/or DVRs (see question #2).

Q: What if I want to use a digital video recorder with cable service? With satellite service?
Generally, you can either rent a DVR from your cable provider or purchase a standard or HDTV DVR from a third-party company such as TiVo. Purchasing can be expensive: Standard TV TiVo models start at approximately $300 and HDTV models at roughly $800 and also come with monthly service commitments.
With satellite service, you can often buy your own DVR right from the provider instead of going to a third party. Third-party offerings such as TiVo are also available at the same prices as their cable counterparts. Given the relatively high cost of such equipment, it’s often less costly to rent rather than buy in this case.

Q: Overall, which type of service has the edge: cable or satellite?
Because of more and better HDTV offerings, more sports and interesting entertainment offerings, and a better record for service and support, most experts give an edge to satellite over cable. But for those to whom “triple-play” packages (TV, phone, and Internet service) are appealing, or for whom access to local channels or on-demand services is important, cable pulls ahead of satellite. Both will certainly do the job, and neither has an absolute edge over the other.

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