The U.S. pay TV sector collectively dropped 113,000 subscribers in the third quarter — capping the worst 12-month period of losses for the industry — but the pace of consumers cutting the cord has slowed down, according to Wall Street analyst firm MoffettNathanson.

The Q3 decline represents a 0.2% drop in pay TV households year over year, with cable operators sustaining the biggest hit with a net loss of 687,000 video customers, analysts Craig Moffett and Michael Nathanson estimated in a report.

The contraction could have been worse: In the third quarter of 2013, housing starts decelerated with 366,000 fewer new occupied dwelling units than a year earlier, according to the report. “What is perhaps more interesting than the fact that pay TV declined is that it didn’t decline more than it did,” Moffett and Nathanson said.

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At the same time, pay TV revenue rose 5.1% in the most recent quarter — even as subscriber rolls have shrunk — and that points to long-term problems for the sector, the analysts wrote.

“Rapidly rising prices are squeezing lower-income consumers out of the ecosystem,” Moffett and Nathanson said. Programmers’ expectations of consistent high-single-digit growth “threatens the balance of the whole media ecosystem.”

Both DirecTV and Dish Network posted higher-than-expected subscriber gains in the quarter, of 139,000 and 35,000 respectively. The satcasters likely benefited from Time Warner Cable’s standoff with CBS over retransmission fees, which resulted in a monthlong blackout of the Eye in major TW Cable markets while the MSO’s subs nationwide lost Showtime and other cablers. Time Warner Cable dropped a record 306,000 video customers in Q3, and execs acknowledged the CBS spat was a key factor.

Meanwhile, AT&T and Verizon’s TV services continued to steal share from cable, with AT&T U-verse adding a net 265,000 subs and FiOS TV capturing 135,000 net new video customers in the period.

As pay TV growth has stagnated, some operators are signaling that they’re willing to let price-sensitive customers leave. New York-area operator Cablevision Systems, which dropped 37,000 video subs in the third quarter, said that it is no longer offering price discounts as a way to retain customers.

“The customer that’s been bouncing from one company to another on promotional discounts, back and forth, has hit a dead end with us,” Cablevision CEO James Dolan said on the earnings call last week.