It’s shaping up to be grim quarter for the pay-TV biz, as the drip-drip-drip of cord-cutting continues to put pressure on the fat traditional channel bundle.

Verizon reported a net loss of 18,000 Fios Video customers (versus a gain of 36,000 in the year-earlier period) for the third quarter of 2017. That reflects the “ongoing shift” from traditional linear video to over-the-top services, CFO Matt Ellis said on a call with analysts, as well as competitive offers from rivals. At the end of the quarter, Verizon had 4.6 million Fios Video connections. The telco gained 66,000 Fios Internet subs in the period, to stand at 5.8 million total.

As a hedge against declining pay-TV numbers, Verizon is looking to launch its own OTT television service, similar to Dish Network’s Sling TV and AT&T’s DirecTV Now.

Verizon is negotiating rights with programmers to deliver such an online-TV service, Ellis told analysts. The company expected to have those completed by this time — but those deals are taking longer than expected to finalize, he said. The telco has delayed the launch of the internet TV service launch to the spring of 2018, Bloomberg reported; Ellis declined to comment on the timing.

“This is a space where we think there’s an opportunity for us to play, but we don’t want to launch just a me-too product,” Ellis told analysts. Verizon’s OTT offering will “probably” be geared around live TV programming, but “how and when we launch something will be TBD.”

Ellis, echoing past comments by Verizon execs, added, “The traditional TV bundle is not long-term sustainable.”

The rest of the industry is feeling the heat as well. Both Comcast and AT&T, the two biggest U.S. pay-TV providers, have warned that they’re expecting sizable pay-TV losses in Q3. AT&T’s DirecTV traditional satellite service shed 390,000 customers in the quarter, partially offset by a gain of about 300,000 DirecTV Now OTT subscribers. Comcast has forecast a net loss of 100,000-150,000 video subs for the quarter. AT&T reports Q3 earnings on Oct. 24, followed by Comcast on Oct. 26.

Verizon is mounting its “virtual pay-TV” push and is continuing to integrate AOL’s and Yahoo’s teams in the Oath digital-media division while it’s losing its top media exec: Marni Walden, Verizon’s EVP and president of global media, is stepping down from her day-to-day duties at the end of the year, staying on as an adviser until next February.

Ellis, in his comments to analysts, said that no matter what happens on the subscription-TV front, Verizon is well-positioned for the OTT shift with its Fios broadband network. “When you move to over-the-top for your video entertainment, the quality of that broadband connection becomes more important than ever… and a fiber connection is the best connection for that,” he said.

Indeed, “Verizon appears to be pivoting towards embracing standalone (single-play) broadband subscriptions,” MoffettNathanson analyst Craig Moffett wrote in a research note, citing the telco’s better-than-expected Fios Internet adds in Q3.

Overall, Verizon met Wall Street expectations on earnings and topped revenue forecasts. It posted net income of $3.62 billion for Q3, or 98 cents per share (excluding one-time costs, including those related to the Yahoo acquisitions). Quarterly revenue was $31.72 billion, slightly higher than analyst expectations of $31.25 billion.

In its wireless business, Verizon’s Q3 results showed sequential improvement in revenue and subscriber trends, said Mark Stodden, Moody’s lead telecom analyst. However, he added, Verizon’s long-term growth potential remains uncertain, as its investments in new business platforms are still nascent and its vision for 5G is developing.”