While traditional pay TV subscriber bases continued to decline in 2017, the five biggest virtual MVPDs added an estimated 2.6 million subscribers for the year.

According to MoffettNathanson analysts Craig Moffett and Michael Nathanson, YouTube TV, Hulu Live, Sony PlayStation Vue, DirecTV Now and Sling TV together added nearly 800,000 subscribers in the fourth quarter of 2017, bringing the total to about 4.6 million. This figure doesn’t account for the dozens of smaller players like Philo TV and fuboTV.

The fourth quarter saw a 126.5 percent spike in vMVPD subscriber growth year over year, according to MoffettNathanson estimates, compared to a 3.4 percent decline in total traditional pay TV subscribers. Traditional pay TV distributors together lost 621,000 subscribers in the fourth quarter of 2017, compared to 396,000 in the year ago period.

The analysts estimate that since 2010 the cumulative number of cord-cutter and cord-never households has reached roughly 13.5 million households, but vMVPDs have so far re-captured only about a third of that loss. 

There are a number of unknowns, MoffettNathanson analysts acknowledge, when it comes to forecasting where the pay TV industry will go.  

“Is it the case that the current uptake of vMVPDs is boosted by the pent-up demand of the thirteen million? Or, alternatively, have many of these 13 million been lost to the category forever, happily making do with SVOD and other non-live alternatives, while the current cord-cutters are overwhelmingly leaving for vMVPD alternatives,” the analysts wrote in a research note. “We don’t know…but it makes a huge difference in forecasting what happens from here.”

One thing that is clear is that the satellite TV segment is “in free fall,” with subscribership down 4.7 percent year over year, and continuing to accelerate.

Dish Networks for example lost more than 1 million satellite TV subscribers in 2017, while DirecTV lost 212,000 in the last three months of 2017.

Meanwhile, Dish’s vMVPD Sling TV added an estimated 160,000 in the fourth quarter, bringing the total to about 2.2 million. Overall the five big vMVPDs added 772,000 subscribers in the period.

And vMVPD are poised to continue growing because they are willing to sell their service at or below cost, and as long as customers can continue to save a lot of money by going virtual, they will, MoffettNathanson analysts noted.

However, they also point out that, “being a vMVPD will remain a truly lousy business.”

Overall, including estimated additions from vMVPDs, total net pay TV subscribers grew by 151,000 in the fourth quarter, representing a 0.7 percent decline in year over year growth.