Digital TV Cost Cutting

It can be made to sound almost beautiful, “the box in your home that's a window on the world”, yet multi-channel TV is usually under-utilised and over-expensive. With this five-step plan Sky and cable users may be able to retain currently watched channels, yet save £100s annually by speedy package switching and price haggling. This is more art than science, yet huge potential savings make it worth a try.

• Step 1: Calculate the real cost
• Step 2: Do a channel audit
• Step 3: Automated Comparison
• Step 4: Haggle
• Step 5: Ditching & Switching
• Other articles/discussion

Step 1: Calculate the real cost

Multiply your package's monthly cost by twelve to establish the annual cost. Unpleasantly, it's likely to be £300 to £600. This isn't churlish anti-TV sentiment, but an elbow in the ribs to consider whether this huge sum represents good value. For some it does.

My inspiration for this comes from filming Make Me Rich for ITV. Repeatedly I saw families unconsciously accede huge chunks of income for ‘access' to channels. ‘Access' because many channels are unwatched, one home had £800/year almost unused Sky and NTL (now Virgin Media) packages.

The costs don't stop there

Many people, especially Virgin Media users, also get a phone package with their TV, often a penalty not a bonus. These can be monumentally expensive, substantially more costly than the cheapest providers (see Cheapest Home Phones article).

For example a 10 minute daytime Virgin Media call to a mobile averages £1.60 (with the exception of Three); £1.30 on BT, and just 60p on call18185. So don't believe the ‘digital TV free with a phone service' line hype, effectively you're paying.

Step 2: Do a channel audit

The formal approach to examining your usage should be a sofa-side notebook, detailing the times and lengths of watched channels; yet that's rather nerdy.Just scanning through the channels (with the family preferably) should let you know which are important and which aren't.

Remember real past viewing habits are a better guide than guessing at future preferences. Most important is how often you really watch the premium sport and or movie channels.

Step 3: Automated comparison

TV provider's leaflets and brochures aim to corral you into a narrow range of categorized packages, designed to make you pick multiple (and therefore more expensive) options. Yet there's more flexibility on both price and package than they let on.

Yet before pushing for a better deal, those online can arm themselves via a useful tool from web price comparison service Uswitch*. Here you enter the channels you're looking for (as established in step 2) and it shows the alternatives available in your area. The results are very helpful, but treat it only as a benchmark, as the comparison doesn't include the myriad of special offers pushed through our letter boxes (worth watching for).

Step 4: Haggle

At digital TV's birth, the aim was to recruit as many viewers as possible. Yet the market's increasing maturity means retaining existing customers is ever more important.

The obvious haggle start-point (you've little choice) is with the customer service operatives. Ask about the cost of your package (or reduced package if the channel audit meant you're overusing) and see what deals are available.

Ensure they realise you've the opportunity to shift to a more competitive package elsewhere, such as Tiscalli (previously Homechoice), which is rolling out in many areas and is very price competitive or Freeview; yet give them a hope with “can you offer me a deal? I'd much prefer to stick with you”.

If they're not willing to play ball, the powerhouse maneouvre is threatening to leave. Remember the departments we think of as ‘disconnections' are often internally named ‘customer retention' as that's their business aim, thus they've much wider discretion to give better deals than main customer services, as ultimately their job is to keep your custom.

Stories from the chat forum: two real examples of digital TV haggling

“I rang Virgin Media as I was being charged £38 month for Broadband, TV and phone before call charges. I mentioned a family member had signed up to all three for only £30 a month. It immediately reduced my broadband costs by £10 a month, saving £120 a year.”

“Call Sky to cancel, it'll give you 3 months at half price, so the top package is £20 instead of £40/month, a saving of £60.”

Discuss what you've been offered, to help others in their haggling

Sky

Over the last year it's become increasingly diffcult to haggle down the cost of digital TV with Sky, but to gauge how it works behind the scenes, read this Insider's Note to arm yourself with insightful tips.

Don't be ruled by pride

Remember this is a haggling not a leaving exercise. One danger is you posture leaving, it doesn't improve the offer, and you feel embarrassed into actually leaving. Don't do this. Buy time to reconsider by saying “right I'll think about this and get back to you”.

Step 5: Ditching and Switching

If you don't get a price reduction, and aren't getting good value consider ditching or switching, utilising the comparison service to help inform your choice.

By far the cheapest multi-channel operator is Freeview; it's now easily possible to get a Freeview box for £20 (see Great Freeview Hunt, for discussion of the cheapest and best). This then gives access to all eight BBC TV channels, digital radio and others such as E4, Film4 and ITV2 without a monthly fee. An alternative is Sky's No Commitment Package at Dixons* which has a different selection of channels available for a one off £75, or for a slightly cheaper version try the Free to Air Kit.

It's always important to check you're not locked in to a package and can cancel without paying more. Also check the lock-in when it comes to signing up for a new package arrangement.

A bonus saving for Sky customers

If you're signed up to Sky and have friends or relatives that are considering the same make use of Sky's recommend a friend scheme. Recommend a friend and it'll give you £30 in M & S vouchers; just logon to Sky* and enter their details or after it's been installed just call them up and give both parties details. Even better, there's no limit to the number of people you can recommend!

Switching from Sky/Cable to Freeview will save many £400 plus a year, enough to supplement the loss of movie channels with lots of DVD rentals! However even without ditching, the savings can be huge. During the filming of Make Me Rich one family who followed this five step technique cut their bill for Sky from roughly £50 to £25 a month, without losing any of the channels they watch regularly, and pushing hard on the phone for a better deal. That's £300 a year.