In its infancy, streaming video service from names like Netflix (NFLX -0.83%) wasn't a replacement for cable television as much as it was an add-on. The Netflix content library was respectable but modest, and there was no live broadcast feed.

As time has marched on, however, things have changed on this front. Streaming still isn't quite cable, but it's getting closer. The cord-cutting movement has become palpable now that streaming platforms like Sling TV from Dish Network (DISH) and Alphabet's (GOOG -0.02%) (GOOGL -0.09%) YouTube TV are viable alternatives to conventional cable. Each offers live network programming in addition to on-demand options.

The impact of live-streaming on traditional cable is only about half-realized right now though, according to numbers from Screen Engine/ASI's research arm The Diffusion Group (TDG). Another huge chunk of current cable customers is expected to shun traditional TV service and instead opt for streaming in the very near future.

Woman watching streaming TV with remote in hand and socked feet propped up

Image source: Getty Images.

One or the other, but not both

All things considered, cable names like Comcast (CMCSA -0.02%) and Charter (CHTR 0.81%) had a pretty good run. As of mid-2018, 37% of consumers subscribed to a virtual multichannel video programming distributor's (vMVPD) service like Sling TV also subscribed to a conventional cable service. It suggests that even those so-called streaming skinny bundles weren't quite enough for consumers. In fact, Sling TV was the top name in that small sliver of the video entertainment market.

That's changed dramatically in just the past couple of years. As of right now, TDG estimates that only 23% of virtual -- or streaming -- cable subscribers are also still paying for TV from a conventional cable provider.

Sling TV is no longer the sole power player in the arena, for the record. MoffettNathanson estimates that, as of the end of Q1, Walt Disney's (DIS 0.09%) Hulu + Live TV boasts 3.3 million paying customers. Tied with Sling TV for second is the aforementioned YouTube TV from Alphabet, each with an estimated 2.3 million members. Sling TV seems to have led a net loss in the world's total number of vMVPD subscribers though, with only YouTube TV and Hulu + Live TV able to add customers on a net basis.

It should be noted that TDG's research doesn't wholly point to a loss in the total number of linear cable customers. A sheer increase in the number of virtualized cable TV customers among consumers who didn't or will never have a conventional cable service could also drive the total percentage of dual subscribers lower.

But the takeaway is still the same. That is, people are increasingly finding skinny bundles to be an acceptable alternative to conventional cable, and that paradigm shift is only likely to carry on. TDG estimates that by 2022 only 10% of vMVPD subscribers will still also be traditional cable customers.

No going back now

This is of course an expanding challenge for cable companies like Charter and Comcast, the latter of which is answering back with a stand-alone streaming product of its own. Peacock doesn't quite qualify as a skinny bundle akin to Sling TV or YouTube TV, as its video library is limited to NBC and Universal content, both of which are owned by Comcast. Still, Peacock is something of a step up from Disney+ or Netflix in terms of entertainment content, as it will offer some programs in an on-demand format at almost the same time they're being aired to linear cable customers. In the meantime, both Charter and Comcast provide lots of on-demand content to current customers or their respective linear cable offerings.

Nevertheless, TDG's numbers underscore what investors might already innately suspect -- consumers are increasingly shunning conventional cable now that cheaper, comparable, viable streaming alternatives are available. It's possible TDG's expectation that only 10% of virtualized cable customers will also still be paying for linear cable in 2022 actually overestimates traditional cable's hold on its current customers.