U.S. consumers continue to cancel their conventional cable services. The nation's six biggest names in the business (which Leichtman Research says accounts for about 95% of the market) collectively lost a little over 1.1 million customers during the three-month stretch ending in June, slowing down Q1's cord-cutting pace of more than 1.5 million, but continuing the bigger-picture cord-cutting cadence that's been a problem for the industry since 2014.

A red falling chart compared to a green rising chart.

Image source: Getty Images.

AT&T (T 1.33%) led the way with its loss of 443,000 subscribers as its flagship platform DirecTV undergoes the major disruption of changing ownership hands, although the satellite-based service was bleeding customers well before the sale of DirecTV was even considered. No outfit gained subscribers, though, even including the better-established cable television brands like Comcast's (CMCSA -0.82%) Xfinity and Charter Communications' (CHTR -1.46%) Spectrum.

It's becoming crystal clear, however, these cord-cutters aren't giving up on TV. They're just watching it in a different way.

An undeniable migration

The graphic below plots the country's biggest six cable names' collective customer base going all the way back to early 2018. It was then that 83.1 million U.S. consumers were paying for conventional cable. Now, only 65.5 million households are doing so. We saw a clear bump in cord-cutting when the pandemic took hold last year, although the streak of losses has actually been pretty consistent when considering the entirety of the past 3.5 years.

The United States' linear cable business continues to shrink, losing 1.1 million households in Q2 of 2021.

Data source: Corporate filings and press releases. Chart by author.

And don't look for the downtrend to abate anytime soon. Market research company eMarketer estimates the number of conventional cable customers in the U.S. will continue to slide at least through 2024 when the number of non-pay-TV households is likely to eclipse the number of pay-TV households.

As was noted, though, people aren't spending less time in front of their television sets. They're just watching in a different way. Streaming is quickly becoming the preferred way of consuming video.

That comes as no surprise to anyone that's kept their finger on the pulse of this market. Netflix (NFLX -1.56%) began making a noticeable dent in cable's resilient growth back in 2013, just a few years after it began offering programs via streaming in addition to DVDs by mail. The 2008 launch of Hulu, now mostly owned by Walt Disney (DIS 0.01%), helped Netflix chip away at the idea of how TV programming can be marketed and consumed.

It's not a stretch to say, however, the streaming industry's been through an enormous evolution in just the past couple of years. Disney+, AT&T's HBO Max, and Comcast's Peacock are all newcomers, while ViacomCBS (PARA 0.83%) (PARA.A 1.20%) has of course offered Paramount+ (formerly known as CBS All Access) for some time but is also behind young cable-like streaming platform Pluto TV. Fox (FOX 0.56%) (FOXA 0.43%) owns ad-supported streaming service Tubi, and regularly serves around 40 million viewers. Even Discovery Communications (DISC.A) (DISCK) and AMC Networks (AMCX 8.61%) are now wading in streaming waters.

And they're all finding a shocking degree of success with these efforts. Last quarter, streaming services of all ilks added on the order of 44.7 million active users/subscribers.

Worldwide streaming subscribers continue to grow, adding 44.7 million watchers to the mix last quarter.

Data source: Corporate filings and press releases, media and analyst estimates. Chart by author.

Take that number with a grain of salt for a couple of reasons, the biggest of which is it's a worldwide number and not just a U.S. figure. The other reason to not read too much into this number is it requires multiple streaming services to fully replace a canceled cable package. Recent data from Parks Associates indicates around half the U.S. households that have cut the cord now pay for four or more streaming options.

Still, in that the United States remains the key market for most of these streaming brands -- like Disney+, Discovery+, Pluto TV, and HBO Max -- it's difficult to not connect the clear demise of conventional cable television with popularization of streaming alternatives.

Change has to happen

It still doesn't point to the inevitable end of cable television. Curiously, Dish Networks' (DISH) skinny streaming bundle, SlingTV priced between $35 and $50 per month, added 70,000 paying customers last quarter. Sports-oriented fuboTV's (FUBO -2.38%) streaming cable service picked up another 91,291 paying customers during the second quarter despite its monthly cost of between $65 and $80. Consumers will obviously pay something of a premium for the right cable package, even if it's one they've pieced together. The aforementioned Parks Associates survey points out that consumers who have cut the cord are spending about $85 per month on streaming services, more or less in line with the typical monthly cost of traditional cable service.

Whatever the case, there's no way of denying the advent of streaming isn't at least a major disruption for the traditional cable media model.

There's also no reason to think the trends indicated in the two charts above won't persist until the major cable players like Charter's Spectrum and Comcast's Xfinity rethink their current bundling and pricing approach. Networks and cable channels are also going to have to get on board and stop forcing cable platforms to cram all of their content together in one package.