Cable, satellite and internet TV providers collectively lost 2.3 million customers in the first quarter of 2023, as streaming continues to dominate the subscriber landscape, Variety reports.

“We are watching the sun beginning to set” on the pay-TV industry, Craig Moffett, SVB MoffettNathanson senior analyst, wrote in a report released Friday.

According to Moffett’s calculations, total pay-TV penetration of occupied U.S. households dropped to 58.5% with the Q1 decline. This figure includes internet services like YouTube TV and Hulu, and is the lowest point since 1992 — two years before cable TV challenger DirecTV launched. U.S. pay-TV services were down nearly 7% on an annual basis, by the end of Q1, and had 75.5 million customers.

The rate of decline in Q1 for cable TV providers sank -9.9%, year over year, while satellite companies DirecTV and Dish Network dropped -13.4%. Multichannel video programming distributors, also called “virtual MVPDs,” reported one of the worst quarters to date, shedding 264,000 customers in Q1.

“The picture is not one that suggests that a plateau in the rate of decline is coming any time soon,” Moffett said.

The largest pay-TV provider in the country, Comcast, lost 614,000 video customers by the end of Q1 — the most of any company. On an earnings call, Comcast Cable President and CEO David Watson recognized the inevitability of cord-cutting and said the company’s strategy is “to not subsidize unprofitable video relationships.”

“We’ll fight hard, whether it’s acquisition, base management or retention,” he added. “So it’s important to us, but we have figured out a way to manage it financially.”

The problem with pay TV, according to Moffett, is that retail prices have been driven higher by higher sports-broadcast fees, forcing distributors to increase prices and fueling the cord-cutting movement.

Once a mainstay of the legacy ecosystem, even ESPN has admitted that a day will come when a la carte streaming is viable, Moffett said.

“We haven’t really changed our position regarding basically migrating ESPN’s flagship service as a direct-to-consumer or streaming platform,” Disney CEO Bob Iger said on a May 10 earnings call. “We think there’s an inevitability to that, but it’s a huge decision for us to make. And we know that we’ve got to get it right, both in terms of pricing and timing.”

According to MoffettNathanson, the “pay TV floor” is 50 million to 60 million American homes. “As things stand, we expect cord-cutting to grow even worse and the long-theorized ‘floor’ to be breached,” Moffett wrote in the latest report.

The only provider tracked by MoffettNathanson that gained subscribers in Q1 was YouTube TV, which added an estimated 300,000 subscribers in the period, to reach approximately 6.3 million.

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