“Whoever is winning at the moment,” George Orwell noted, “will always seem to be invincible.”

For years, the pay-TV biz was an unassailable empire, impervious to encroaching internet invaders. Now it’s on the verge of what could end up its worst quarter yet — and just as rumblings grow louder regarding consolidation among media companies looking for greater scale and negotiating power against distributors.

The extent of the damage to the pay TV ecosystem in the quarter will become apparent with earnings reports starting to arrive this week. On Tuesday, AT&T posted a record loss of 351,000 traditional TV subs, including 156,000 DirecTV satellite customers. The telco also netted 152,000 subscribers for DirecTV Now, but the internet-delivered service is sold in cheaper, smaller bundles — and with the rise of over-the-top TV, many networks are getting left out.

If other operators report similarly ugly results, the urge to merge could intensify as media companies look to increase shareholder value.

Scripps Networks Interactive, home to lifestyle channels including Food Network and HGTV, has held discussions exploring a merger with both Discovery Communications and Viacom, according to reports last week. Meanwhile, John Malone may be in the mix: Univision Communications held early talks with his Liberty Media after the mogul indicated he was interested in acquiring a stake in the Spanish-language broadcast giant, per The Wall Street Journal.

The prospect of consolidation in the sector should boost investor confidence in media stocks because mergers and acquisitions always trump fundamental challenges, says Tuna Amobi, a senior equity analyst at CFRA Research. “Expect M&A on the content side to return as part of the conversation,” he adds.

M&A can’t come quickly enough considering how bad those fundamentals are looking going into the second quarter, a seasonally weak period. Cable, satellite and telco ops will shed upwards of 1.6 million subscribers in the quarter given current trends, RBC Capital Markets estimates — nearly double the amount lost in the previous quarter and year-ago. Even factoring in virtual providers like Hulu and Sling TV, the sector stands to drop 1.1 million customers. That could make jittery investors flee, conjuring memories of the meltdown that flattened media stocks two summers ago, triggered by a downward revision of Disney’s affiliate-fee projections.

“This acceleration in cord-cutting is precisely what media investors fear most,” RBC analyst Steve Cahall wrote in a research note last week.

What’s worse, the overall shrinkage doesn’t even tell the whole story, says BTIG Research analyst Rich Greenfield, because individual networks are increasingly getting stripped out of cheaper skinny bundles. In the first quarter, “you started to see declines for ESPN and others that hit 3%,” he says. “The question for everyone is: Is there any reason to believe it’s going to stabilize?”

In short, the value of the 100-plus pay-television package is on the wane. Ratings continue to drop, and TV advertising is stagnating (notwithstanding the strong results networks have touted coming out of the 2017 upfronts, which analysts interpret as a shift in spending from scatter into upfront markets). The vicious cycle is fueled by more affordable alternatives: You can buy CBS, HBO, Showtime and other networks a la carte online. Monthly bundles from Hulu and YouTube TV, priced at $20-$35, debuted in the second quarter.

The shift to smaller TV bundles has forced the biggest pay-TV distributors to hammer together their own skinny offerings.

The faster subscriber numbers dwindle, the less traditional operators are going to care about their video businesses, says Greenfield: “You’ve got more and more bundles without sports [networks], smaller bundles developing at both existing operators and new players — it’s really spooking investors.”

There’s also the growing bucket of exclusive content procured by Netflix, Hulu and Amazon — providing more entertainment bang for the buck among a growing number of consumers. Hulu, for one, last week unveiled a massive new agreement with 20th Century Fox Television Distribution that will add nearly 3,000 episodes to the streaming service, including every episode of “How I Met Your Mother,” “Burn Notice,” “Bones” and “Glee,” as well as exclusive rights to all 11 seasons of “MASH” and the full “NYPD Blue” library.

Netflix extended its hot stock streak last week on its big second-quarter numbers, and shares shot to record highs — giving the streaming giant a market cap of more than $80 billion and making it bigger, for the first time, than Time Warner. Jeff Bewkes once dissed Netflix’s chances of domination as being as likely as “the Albanian army” taking over the world. Today Netflix, which streams content in 190 countries, is more valuable than the house that Bewkes built.

“I don’t think the sky is falling,” says Amobi. “But traditional TV is still losing subscribers to online video.”

Pay TV’s downward spiral is renewing chatter about consolidation. Discovery, Scripps and Viacom are in particularly difficult positions to navigate the changing TV tides, according to Brian Wieser, senior research analyst at Pivotal Research Group, especially relative to conglomerates that own broadcast networks, including Disney, Fox and CBS. “Discovery, Scripps and Viacom each lack sports programming or much in the way of other high-end original content on their core U.S. networks,” Wieser wrote in a note to clients last week.

UBS analysts say a Discovery-Scripps tie-up would have significant synergies, resulting in $150 million to $250 million in annual savings while potentially enhancing the combined entity’s leverage with distributors.

M&A action could also get a kick once AT&T’s takeover of Time Warner closes; analysts say there’s a good likelihood it will go forward. Time Warner was the biggest media stock gainer in 2016: Its share price increased 52% last year, versus 12% for the S&P 500, largely because of the AT&T deal.

For traditional media companies, says Amobi, “2017 has been about resetting expectations. You don’t get a sense of the euphoria that has driven these companies in years past.”