Time Warner Cable is awaiting FCC approval in regards to its approval with Charter, but the biggest risk to the company is not regulatory risk. Source: Time Warner Cable.

According to analysts compiled by financial news site Bloomberg, things are looking up for the pay-TV industry -- sort of. Projections are that the greater industry will lose between 280,000 and 360,000 users. While that may sound ominous, and it is on a long-term basis, it's an improvement over the second quarter, in which the industry lost more than 600,000 subscribers.

Although the report isn't great, it puts to rest concerns that the second quarter was an "inflection point," according to Evercore ISI analyst Vijay Jayant. Instead, Jayant points to a merger-focused second-quarter where operators were more concerned with approval from the federal government than with growing their businesses.

Still, the trend is decidedly in the wrong direction. According to the article, cable analytics firm SNL Kagan reported that 189,000 customers cancelled service, making this year's estimate of losses nearly 70% higher on a year-on-year basis, at the midpoint of estimates. This trend has the potential to hurt both operators and content providers.

Will mergers offset subscriber losses?
Recently, it seems as if major pay-TV operators are operating under the assumption that if you can't beat 'em, join 'em. As a response to the conditions on the ground -- alongside cheap money -- many have turned to acquisitions to boost shareholder returns in a mature and declining industry.

After the federal government essentially shot down the Comcast/Time Warner Cable (NYSE: TWC) merger, the latter quickly found a suitor in Charter Communications, with the company paying $100 in cash and 0.5409 shares of Charter per share of Time Warner Cable, valuing the company at $78.7 billion. The new deal fell firmly within the Federal Communications Commission's 180-day "shot clock," but analysts expect an easier path to approval than with the Comcast debacle.

In addition, Brussels-based Altice, and its acquisitive CEO, Patrick Drahi, purchased a controlling stake in the seventh-largest cable operator Suddenlink for $9.1 billion, followed by the fifth-largest provider, Cablevision, for $17.7 billion, in a move to become a major player in the U.S. cable markets. The FCC is currently reviewing these deals, but the bigger risk to all these mergers could be a shrinking subscriber base more so than regulatory risk.

High-cost cable channels are hurt as well
Also hurt in the crossfire is high-cost cable channels. And there's no bigger poster child for high-cost content than The Walt Disney Company's (NYSE:DIS) ESPN. An earlier Nielsen report by way of The Wall Street Journal (subscription required) found the company has lost about 7.2% of its subscriber base over the past four years, going from roughly 100 million subscribers to its current total of 92.9 million at the time of report -- and that matters to a company whose top and bottom lines are driven by its Media Networks business.

As a hypothetical, these lost 7.1 million users represent more than half a billion dollars on an annual basis, as each user is worth $6.55 monthly, according to SNL Kagan's data. In addition to cord-cutting, ESPN also suffers from the trend of cord-shaving, in which subscribers are trading down from high-end and expanded packages to slimmer basic ones in an attempt to save money.

The biggest risk for these companies is accelerating subscriber losses -- Bloomberg's compiled data suggests that last quarter wasn't an inflection point, but 70% greater subscriber losses on a year-on-year basis isn't too encouraging, either.