The slow-motion crumbling of pay TV has suddenly started to look like a looming avalanche. The unprecedented surge in cord-cutting during the first three months of 2017 has heightened Wall Street fears that the industry’s enormously profitable big bundle of channels is coming apart at the seams — for real this time.

Add to that the debut last week of Hulu’s internet TV service — priced at a low $40 per month for some 50 channels — which excludes cable programming groups like Viacom, AMC Networks and Discovery Communications. The cheap bundle, along with similar offerings like DirecTV Now, Sling TV and YouTube TV, will roil the sector more massively if consumers decide that they can live without 300-plus channels.

The first quarter’s estimated net decline of 762,000 traditional U.S. cable, satellite and telco TV customers was the worst to date, analyst firm MoffettNathanson noted. Since the first quarter of 2014, distributors have lost a cumulative 6.55 million customers. Even factoring in the growth from virtual skinny internet bundles, the sector has declined at an annual rate of 1.3%.

The numbers are too big to dismiss, and media stocks were punished last week as investors concluded that pay TV’s best days are probably behind it. Less diversified programmers like Viacom, AMC Networks, Discovery Communications and Scripps Networks Interactive are considered the most at risk.

“This was supposed to be the quarter that media bounced back,” noted analyst Craig Moffett. Now that the long-held expectation that pay TV subscriber losses would turn into a serious problem has finally come to pass in the first quarter, he opined, “the industry can’t resist change anymore. The future has arrived.”

Lars Leetaru for Variety

The dramatic acceleration of subscriber losses in the quarter exacerbated existing concerns over worsening TV ratings declines this year, UBS analyst Doug Mitchelson wrote in a research note. He theorized that price hikes by traditional providers at the start of 2017 — a nearly annual rite for cable and satellite operators due to escalating programming costs — might have had a significant effect on cancellations.

The internet, of course, is responsible for this overdue disruption of the cable and satellite TV biz. Netflix says that it streams 250 million hours of video daily, and YouTube users consume some 1 billion hours per day. That already siphons off loads of time normally spent watching the traditional tube, reducing the overall value of cable and satellite TV. And with several networks — HBO, Showtime and CBS among them — already offering their own Netflix-style over-the-top services, millions have realized they don’t need to pay for a big bundle.

Programmers had hypothesized they could make the leap to the internet TV era through existing OTT providers, enabling them to reach the portion of the populace that has never paid for television or had cut the cord.

But that’s not really how it’s playing out: The new skinny bundles have mainly been luring customers away from older distributors. “My belief is that OTT [services] will take share away from pay TV,” Dish chairman and CEO Charlie Ergen told analysts last week. “So satellite and cable will be smaller five years from now than they are today.”

Ergen also pointed out that the strategy of skinny-bundle providers has been to undercut the retail pricing of the incumbents, taking far lower margins — or a loss — to gain traction. “I think the OTT model probably initially is going to be a license to lose money for people as they price things below cost,” he said. “Eventually, it’ll sort its way out.” But if the virtual pay TV guys decide to jack up their prices, they’ll potentially lose those price-sensitive customers they were aiming for in the first place.

Even if sales of skinny bundles skyrocket, it would mean lower affiliate fees for programming groups that either don’t have distribution deals in place with such suppliers or have licensed fewer channels.

That said, it’s not clear how attractive the virtual TV bundles will prove to be even at their current price points; they may fail to keep people from abandoning the pay TV universe — or fail to motivate consumers who already don’t pay for television from buying in. “How many people will still feel they need live TV, versus saying: ‘We’re done; we’re not sports fans; we’re totally fine with all the choices subscription offers?’” said VideoNuze analyst Will Richmond. “It’s just not clear [skinny bundles] will have as big an impact as many expect. It’s totally uncharted territory.”

One big disadvantage of the internet-delivered TV services is that they don’t offer a full complement of live-broadcast networks nationwide. In the age of Peak TV, broadcasters continue to have the most popular content. The Hulu Live TV service, for example, offers local affiliates of ABC, CBS, Fox and NBC initially in Los Angeles, New York, San Francisco, Philadelphia and Chicago; YouTube TV is available only in those same five markets. There are similar gaps with DirecTV Now, Sling TV and Sony’s PlayStation Vue — nobody has anything close to national coverage.

Setting aside what happens in the virtual pay TV horse race, the internet isn’t finished chipping away at pay TV by a long shot.

The winds of cord-cutting are whipping up amid new competition for eyeballs from online heavyweights that are trying to become more TV-like. Snapchat has lined up more than a dozen deals with TV programmers and studios for original short-form shows, and Twitter unveiled 14 new or renewed live video deals, including with BuzzFeed News, Live Nation and the WNBA. Facebook execs last week reiterated that the social giant — with nearly 2 billion monthly users — is looking to invest in long-form content.

Does all this mean the TV industry hits the panic button? Planning is well under way for a future in which the bundle has all but disappeared. AMC, NBC,Viacom, Discovery and others are all contemplating launching new direct-to-consumer subscription VOD services. And Disney is mulling its own OTT gambits; the Mouse House paid $1 billion for a stake in Major League Baseball’s BAMTech streaming-video division.

Whatever happens, the disturbance in pay TV’s force field could open opportunities for other players to jump in — like Apple. The tech giant has been slowly investing in original content, and CEO Tim Cook sees the decline of traditional TV as Apple’s potential gain.

“Where cord-cutting has been happening on some kind of basis, we think it’s accelerating massively,” Cook said in an interview last week with CNBC. “The trajectory is [under] debate. But we’d like to play in this.” He added: “We’re learning, and we’ll see where this takes us.”