The U.S. pay-TV business keeps shrinking, albeit slowly — but for the first time ever, the sector dropped a net number of subscribers in the first three months of a year, during Q1 of 2015.

The industry is contracting at a 0.5% annual rate, with a net loss of 31,000 customers in Q1, according to MoffettNathanson analyst Craig Moffett. Traditional subscription television providers face an array of Internet competitors, ranging from Netflix and Hulu to YouTube and other digital-video sites, that are discouraging consumers from signing up for cable or satellite TV or prompting them to cancel service.

“Cord-cutting has finally accelerated,” Moffett wrote in a research note Monday. “It’s not too early to get worried.”

Q1 is typically a strong quarter for pay-TV operators, but it’s seasonally weak for household formation, Moffett noted. In the first quarter of 2015, occupied household net adds were down 407,000, according to the U.S. Census Bureau — but over the last 12 months, the U.S. has added 1.26 million households which “are nowhere to be found in the most recent pay-TV data,” according to Moffett. That suggests a significant number of “cord-nevers” who are shunning traditional subscription television.

“To investors, the question of whether all that licensing of content to Netflix and Hulu and other online venues would hurt or help the pay-TV ecosystem seems painfully quaint (of course it will hurt),” Moffett wrote.

The decline in Q1 2015 comes after about 1.4 million households over the course of 2014 either canceled existing pay-TV service or were new households that didn’t sign up at all, according to Moffett’s analysis.

Comcast, the No. 1 cable operator, shed 8,000 video subscribers, while Time Warner Cable — the now-aborted takeover target of Comcast — actually gained a net 33,000. DirecTV, the largest satellite provider, added 60,000 and Verizon FiOS and AT&T U-verse added subs as well. But overall, the gains were offset by customers dropping service with other companies.

Dish Network suffered the biggest losses in the sector, dropping 134,000 satellite-TV subs in Q1. The satcaster blamed that largely on programming spats, including with 21st Century Fox for Fox News Channel, in which Dish dropped the network; Dish restored Fox News in January, but the blackout had a carry-over effect into Q1.

On a call with analysts Monday, Dish CEO Charlie Ergen said that his general sense was the pay-TV business peaked a few years ago, “and is in slight decline in terms of households willing to take the big bundle… but it’s not declining as fast as I thought it would.” He took issue with Moffett’s cord-cutting thesis, arguing that Dish’s sub losses in the quarter went to the satcaster’s competitors. But at the same time, Ergen cited Dish’s Sling TV OTT service as a way to reach younger consumers who aren’t subscribing to traditional pay television.

Dish in February launched Sling TV, aimed at so-called cord-cutters (and cord-nevers) who are averse to paying for big traditional channel bundles. The company did not disclose how many Sling TV users it has signed up so far, with execs saying only that the majority were consumers who did not previously have pay-TV service. In any case, those customers represent a shrinking of the overall pay-TV ecosystem given Sling TV’s stripped-down 20-channel baseline bundle.

Ergen likened the shift from conventional pay-TV to Internet-delivered TV service to Netflix’s shift from DVD-by-mail subscriptions to streaming. “I’m not saying that will happen (with Dish and Sling TV),” he added. But “Sling TV is a different dynamic” in terms of the economic model and the type of consumer it’s aimed at, Ergen said.