Rumors of the death of pay TV have been slightly exaggerated.

There's no denying that pay TV, a category that includes traditional cable, satellite as well as bundles such as Verizon's (VZ) - Get Report FIOS or AT&T's (T) - Get Report Uverse, has been on the wane in recent years. It's also true that streaming video on demand (SVOD) services are rapidly proliferating -- Disney+ (DIS) - Get Report , WarnerMedia's HBO Max and Apple (AAPL) - Get Report TV+ are going live in the coming quarters, joining competitors Netflix (NFLX) - Get Report , Hulu and Amazon (AMZN) - Get Report Prime Video.

But it's not so easy to draw a straight line between the two trends. Nor is the "cord cutting" phenomenon a simple matter of consumers flocking to SVOD providers because of cheaper pricing and better content.

As of late 2018, 78% of U.S. households still subscribed to pay TV, while 69% subscribed to an SVOD service, according to Leichtman Research Group, which analyzes the broadband, media and entertainment industries. And in recent quarters, the majority of losses in pay TV subscriptions have been driven by losses in satellite subscribers -- from one provider in particular, said LRG founder Bruce Leichtman.

"AT&T had a dramatic change in plans, focusing much more on profitability and margins, so that led to this idea that they're not going to chase low-value customers the way they used to," he said, referring to AT&T's DirecTV service. "Since their strategy change three quarters ago, they've represented half of all industry losses."

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Put another way, losses in satellite subscribers and gains in streaming have as much to do with provider strategy as consumer choice. And there's also a lot of overlap between households that subscribe to pay TV and at least one streaming service -- suggesting that when it comes to home entertainment, many people are perfectly comfortable shelling out $100 or more on a monthly basis.

"Everyone is looking for value --- it doesn't matter where you are as far as your income," Leichtman added.

As the streaming market heats up -- Netflix, Apple, Amazon and others have collectively spent billions producing or acquiring premium content -- it's easy to frame it as, fundamentally, a war for the best content at the best price. Netflix analysts, for example, have suggested that subscriber growth is closely tied to the quality of the original content slate in any given season, driven by certain premium shows such as Stranger Things,Orange is the New Black, Ozark, or BoJack Horseman. Others following the forthcoming Disney+ launch note that its biggest strength is its vast catalogue of intellectual property, from Star Wars to Pixar and National Geographic.

But where the industry goes from here won't just be dictated by whether consumers prefer to kick back with Marvel movies, Game of Thrones or old episodes of Friends. At low price points relative to pay TV subscriptions -- WarnerMedia's HBO Max, which could be priced as high as $17 per month according to reports, is poised to be the most expensive of the standalone SVOD services thus far -- there's room for many players to succeed.

There's an important caveat, however. Per Sjofors, founder of Atenga Insights and a specialist in how prices affect behavior, said that there's a psychological "wall" at $15 where many consumers won't sign up in the first place. With one exception.

"Those who are interested in sports are willing to pay an insane amount of money to see the teams they follow, on whatever channel it shows up," he said.

That's a key factor in the staying power of pay TV for many consumers -- even as SVOD services have risen, too. And it's likely one of the main reasons why in promotional materials for Hulu or YouTube TV -- two services that include live TV and live sports for between $40 and $51 per month -- you'll typically find access to live basketball or football placed front and center.

Pay TV is still "highly likely" to lose subscribers in the coming years, Leichtman noted, though the pace is difficult to predict: "How the industry will further progress has as as much to do with provider strategies as consumer behavior," he said.

As for what will fill the void for the cord-cutters of the future, it might be wise to (pun intended) keep your eye on the ball. 

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