For all the talk about cord-cutting over the years, the most important trend in pay-TV these days isn’t consumers dropping out entirely, but rather shifting from traditional multichannel services to lower-priced virtual MVPDs or “skinny bundles.”

The trend of skinny bundle gains offsetting  multichannel losses continued again in Q2 ’18 where, according to Leichtman Research Group, the top traditional services lost approximately 800K subscribers. But just the 2 publicly-reporting skinny bundles, Sling TV and DirecTV Now, gained 383K (with the latter accounting for 342K).

Unknown is how many subscribers YouTube TV, Hulu Live, PlayStation Vue, FuboTV and other skinnier bundles (e.g. Philo) also added in the quarter. Given historical growth rates of YouTube TV and Hulu Live, it’s likely that they and the others combined to add upward of 400K - 500K subscribers in Q2. Add that to the 383K and skinny bundles additions of nearly 800K - 900K in Q2 matched or outpaced multichannel’s loss of approximately 800K, meaning the overall pay-TV industry may have actually grown a bit in Q2.

The rise of skinny bundles is clearly one of the biggest twists in the ever-changing TV landscape. I was a steadfast skeptic of skinny bundles as they were initially presented by Sling TV (whose weakness is now on full display with its anemic 42K sub add in Q2). Sling TV glaringly decided not to include the pivotal broadcast networks from its lineup and still does not. Yes, Sling TV’s low cost was appealing, but requiring an antenna is a high hurdle for many people, its service tiers are confusing and its numerous add-ons maddening.

That brings us to why Google, AT&T and Disney are now the most important players in pay-TV. With Google’s massive checkbook underwriting its losses, YouTube TV prioritized obtaining broadcast channels for its service. AT&T made the same decision for DirecTV Now as did Hulu’s owners for Hulu Live. As a result, mostly they’re now covering the top 100 U.S. markets. That’s no doubt come at a huge cost; carrying ABC, CBS, Fox and NBC likely costs $15 or more per month.

But as I’ve written previously, Google and AT&T have done so because their skinny bundles serve larger strategic purposes (for Google, it’s getting into the TV ad business, for AT&T it’s supporting their wireless business with the “video as bait” approach). Now, as Disney takes control of Hulu, it too has a highly strategic reason for supporting Hulu Live: to use it to promote the 2019 launch of its entertainment SVOD service. Including broadcast channels has made the 3 services very viable replacements for many lighter TV viewers, especially those who watch a lot of SVOD, but aren’t ready to give up on linear TV altogether yet.

Across the media business, those broadcast and cable networks that have carriage agreements with YouTube TV, DirecTV Now and Hulu Live are much more insulated from consumers dropping multichannel service, because many of them will pick up a skinny bundle instead of dropping out entirely. Even cord-nevers will be giving a second look at pay-TV given the strong promotional offers in the market, how they complement SVOD services, the lack of cumbersome equipment/rentals, and ease of subscribe/un-subscribe.

Of course, it’s unclear exactly how committed Google, AT&T and soon Disney all are to their respective skinny bundles. But to the extent that they continue to invest in them and abide monthly losses, these 3 companies are going to be the ones most responsible for powering the shift from multichannel bundles to skinny bundles, which I believe is going to be a highly significant trend as many viewers adopt the “TV as an app” lifestyle for convenience and to save money.