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Earnings season is upon us once again, and you know what that means for the pay TV industry, right? Yep, it’s time to count the cord-cutters—and to acknowledge the growing importance of the virtual pay TV services like YouTube TV and Sling TV.

Cable and satellite pay TV services like Comcast (ticker: CMCSA), Charter (CHTR), AT&T (T), and Dish Network (DISH) have been flat-out hemorrhaging subscribers in recent quarters, as consumers opt to shift their entertainment budget to subscription video services delivered over the internet. And there’s no reason to think the trend will change soon. AT&T’s second-quarter earnings report, expected Wednesday morning, is likely to show another quarter of big subscriber losses, extending a recent trend in which the company has lost hundreds of thousands of DirecTV and U-verse video subscribers quarter after quarter. Comcast’s results on Thursday should show a similar pattern.

UBS analyst John Hodulik notes that the U.S. pay TV business lost 2.3% of their subscribers in the 2019 first quarter alone. He projects the loss of another 3.4% of the subscriber base in the second quarter. Hodulik sees traditional TV subscribers falling steadily to 66.8 million by 2022, down from 100.9 million as recently as 2015. Virtual cable customers, however, will grow to 17.8 million in 2022, up from less than 1 million in 2015, he predicts.

Read more:Cable Companies Are Building New Bundles, but a 5G Threat Looms

Indeed, more cord-cutters have been opting for virtual cable bundles from services like Alphabet’s (GOOGL) YouTube TV, Dish Network’s Sling, and AT&T’s DirecTV Now. Offered separately from internet access, those services offer bundles of local TV stations with a selection of cable news, sports, and entertainment channels, at prices generally well below those of typical pay TV services. (Prices range from $25 a month for the thinnest version of Sling TV to as much as $85 for some bundles with high-end premium services. YouTube TV is priced at $50 a month after a recent price increase.)

According to UBS, these virtual cable bundles—sometimes awkwardly called virtual MVPDs (the acronym stands for multichannel video programming distributor, i.e., pay TV services)—had about 9% of the U.S. pay TV market in the first quarter. He thinks their market share will shoot up to more than 20% by year-end 2022. While those services help soften the blow to the cable channel operators from cord-cutters, it’s only a partial solution, since not every cord-cutter chooses to pay for the virtual cable services.

The virtual MVPD market is a crowded place, with seven major players. In additional to the services mentioned above, there’s AT&T’s Watch TV, Sony’s PlayStation Vue, Fubo TV, and Philo. Many of the services have recently raised prices, and their ability to cover programming costs has long been questionable.

There have been noteworthy shifts in market share—minimal consequences for switching have meant the market hasn’t been especially sticky. Leading the market is YouTube TV, with 42% of the market; with Sling at 16%; AT&T’s DirecTV Now at 15%; and Watch TV at 9%; with smaller share for the other players.

To look at it another way, Google suddenly finds itself as one of the country’s most important distributors of cable TV content—and barring any reversal of the trend, YouTube TV’s position likely will only strengthen over time. That might give them room to improve profitability, especially as Google upgrades the advertising experience on YouTube TV, which sometimes features blank unsold ad units. (Disclosure: I cut my Comcast video service last year and signed up for YouTube TV, which has proven to be a reasonable, but not perfect, substitute.)

AT&T stock fell 1.2% to $31.74 on Tuesday morning, while Comcast edged 0.6% higher to $44.11.

Write to Eric J. Savitz at eric.savitz@barrons.com