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Earnings reports this week show the pace of decline in the pay-TV business may not be as worrisome as feared. And for pay-TV operators, the attractions of internet services is allowing broadband operators to make pricing adjustments on the road to increasing profits.

Charter Communications Inc. (CHTR) - Get Charter Communications, Inc. Class A Report reported half as many cable TV subscriber losses in the second quarter than the totals projected by Wall Street analysts. Subscriber declines at Verizon Communications Inc. (VZ) - Get Verizon Communications Inc. Report and AT&T Inc. (T) - Get AT&T Inc. Report also were less than expected.

Charter's shares soared 5.2% following the release of its earnings Thursday. Verizon shares added 7.7% Thursday, and AT&T got a 5% boost Tuesday.

"Traditional pay-TV providers may have lost fewer subs than anticipated," Wells Fargo Securities LLC media analyst Marci Ryvicker wrote in an investor note on Friday, July 28. Ryvicker estimated the total decline would run to 1.04 million rather than the more than 1.2 million analysts had projected once other operators including Dish Network Corp. (DISH) - Get DISH Network Corporation Class A Report and Cable One Inc. (CABO) - Get Cable One, Inc. Report report their earnings over the next two weeks.

By another estimate, the total decline could actually be as low as 605,000, Barclays Capital media analyst Kannan Venkateshwar said in an investor note on Friday.

Charter, which completed its acquisition last year of Time Warner Cable Inc. and Bright House Networks LLC, reported losing 90,000 pay-TV subscribers in the quarter, a surprise to analysts who expected a decline twice as large. Charter, which includes billionaire John Malone among its largest shareholders, has transitioned 43% of Time Warner Cable subscribers into its Spectrum pricing packages.

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While the decline in pay-TV subscribers remains a concern, Charter is more than making up for the loss by adding broadband customers. Illustrating the overarching trend to online video and away from pay-TV, Charter added 231,000 broadband users in the second quarter. Adjusted earnings for the quarter jumped 8.6% to $3.8 billion.

Comcast Corp. (CMCSA) - Get Comcast Corporation Class A Report , the largest U.S. pay-TV operator, continues to have success with its X1 Infinity set-top box, widely considered the industry's best cable TV device. Comcast reported a decline of 34,000 subscribers, just a shade higher than analyst expectations for a loss of 28,000. Similarly to Charter, Comcast added 175,000 broadband customers in the quarter, boosting revenue for a business that is far more profitable than selling pay-TV subscriptions.

Pay-TV subscriber losses at AT&T were the largest among the top providers, a result of discounts aimed at boosting its wireless business in conjunction with DirecTV Now, its internet pay-TV platform. While AT&T reported losing 199,000 TV subscribers in the quarter, it added 152,000 customers at DirecTV Now.

The quarterly results show that even as the pay-TV business shrinks, however slowly, broadband operators still have a number of ways to compensate for those losses. The decline in subscribers, though, is likely to have a greater negative impact on cable network owners, who may have less leverage bargaining with pay-TV operators for carriage fees even as programming costs continue to rise.

Network owners begin reporting their earnings next week, starting with Time Warner Inc. (TWX) on Wednesday, with AMC Networks Inc. (AMCX) - Get AMC Networks Inc. Class A Report and Viacom Inc. (VIAB) - Get Viacom Inc. Class B Report following on Thursday.

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