These are definitely not happy days for legacy pay-TV providers. While they are still the dominant force on the video landscape and will likely remain so for years to come, the traditional pay-TV business is shrinking and will keep shrinking over the next few years as OTT video and other streaming video options keep surging in popularity, according to a new wave of industry studies and forecasts.

Leading the latest drumbeat of bad news for pay-TV operators, SNL Kagan predicts that traditional multichannel video subscriptions will accelerate their decline over the next four years because of stiffer competition from the growing crop of new video providers. In a new forecast released this morning, Kagan predicts that legacy US pay-TV providers will lose 10.8 million subscribers between now and 2021, reducing their collective total to 82.3 million.

At the same time, Kagan projects that the number of US households relying solely on OTT delivery of "self-aggregated content" will climb to nearly 18 million, or 14% of occupied households by 2021. Plus, Kagan figures that such skinny bundle, or virtual multichannel video programming distributors (vMVPDs) as Sling TV, Sony PlayStation Vue, DirecTV Now, YouTube TV and Hulu Live will claim nearly another 11 million homes four years from now. As a result, subscribers to such "alternative" video services will exceed one quarter of occupied households by the end of this year and climb as high as one third of all homes by the end of 2021.

More bad news for pay-TV providers comes from comScore Inc. In its latest presentation on the state of the OTT business last week, comScore estimated that 3.1 million US homes already subscribed to a skinny bundle service at the end of April, before the national rollouts of YouTube TV and Hulu Live took effect. Sling TV led the way with more than 2 million subs, followed by PlayStation Vue and DirecTV Now.

The comScore research also found that vMVPD customers use their new services plenty. Skinny bundle subs watch their programming for an average of 5.3 hours per day.

As if pay-TV providers didn't face enough new competition from the growing crop of vMVPDs and more established OTT services like the ones from Netflix Inc. (Nasdaq: NFLX), Amazon.com Inc. (Nasdaq: AMZN), Hulu LLC and YouTube Inc. , they now face the prospect of competing head-to-head with Facebook . In a story reported first today by the Wall Street Journal, Facebook is talking to Hollywood studios and agencies about producing scripted, TV-quality series for the social networking website. With a reported budget of up to $3 million per show episode, Facebook is aiming to start airing the original programming on its site by late summer.

As its ambitious video strategy evolves, Facebook's programming push is reportedly part of a two-track effort to flood the site with higher-quality video content. Besides funding such high-end, cable-like productions as Strangers, a relationship drama targeted at millennials, and Last State Standing, a game show, it is also seeking short-form, largely unscripted videos that would run about ten minutes in length. Not too surprisingly, Facebook is aiming its programming at viewers between the ages of 13 and 34.

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All these developments come as cord-cutting by consumers continues to climb. In the first quarter of the year, for instance, the US pay-TV industry shed 762,000 video subscribers, making it the worst first quarter ever for the business, according to figures compiled by Wall Street analyst firm MoffettNathanson LLC . Even heavier losses could be coming in the second quarter, which is typically a weak period for subscriptions because of seasonal disconnects by college students and families on the move. (See Cord-Cutting Hits New Heights.)

But, even in the spate of these depressing reports, there are still some glimmers of hope for pay-TV providers. In yet another recent forecast, Strategy Analytics predicts that pay-TV providers will continue to dominate the US TV/video market for the next few years despite a steady decline in subscribers. In fact, Strategy Analytics Inc. projects that such big pay-TV players as Comcast Corp. (Nasdaq: CMCSA, CMCSK) and AT&T Inc. (NYSE: T) will control 82% of the revenues in the $126 billion market in 2022, while Netflix, Amazon and crew will account for less than 20%. (See Why You Can't Quit Cable TV.)

— Alan Breznick, Cable/Video Practice Leader, Light Reading