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Part of the success of cable giants like Rogers Communications Inc. and Shaw Communications Inc., was due to that fact that if people wanted to watch TV, the cable companies were pretty much the only game in town. But with the advent of Internet-based video streaming services, that changed, and it happened almost overnight as huge numbers of once loyal cable subscribers abandoned long-time habits and signed up with companies like Netflix.

“We’re living [the transformation], it’s exploding,” said Charlotte Burke, chief marketing officer for QuickPlay Media, a video software provider.

A key industry metric once touted as evidence of the cable industry’s sunny future, gross profit per subscriber has for the first time started to drop.

Netflix is now the second largest source of Internet traffic in the U.K., according to Sandvine Inc., a networking equipment company based Waterloo, Ont. Another fast rising contender is Twitch.tv, which now generates more traffic than HBO’s online platform.

“If you ask kids today what sports they watch on the Internet, it’s Twitch.tv,” Dave Caputo, chief executive of Sandvine, told the panel discussion at the Canadian Telecom Summit in Toronto.

Cable companies need to defend against the onslaught from streaming video but in the rapidly changing landscape they’re struggling to figure out how to do that. Part of the problem is that their ability to fight back is hurt by what they see as excessive regulation by policy makers in Ottawa, who seem determined to push them in the wrong direction.