If you accept the notion that the video entertainment subscription business has reached, or passed, the peak of its product life cycle, the obvious question is what product might arise next to take its place.

Most any answer is going to involve Internet delivery, in some way and major potential repercussions for revenues earned by content owners and distributors alike. For the moment, about all one can say is that cable TV and satellite TV are facing rather steady “drip, drip, drip” market share loss to telco providers.

To be sure, market share shifts alone are not direct evidence of a product reaching the peak of its life cycle. In a strict sense, market share shifts only are a measure of competition in a market.

Dish Network fourth quarter 2011 results, especially related to subscriber loss, were worse than ISI Group analyst Vijay Jayant had predicted, for example.  The company lost 1.3 percent of its subscribers in 2011, ending the year with slightly less than 14 million users and added only 22,000 net new subscribers in the quarter.

Credit Suisse analyst Stefan Anninger does note that in the third quarter 83.2 percent of U.S. households bought a video subscription from some provider, down less than one percent from the third quarter of 2010.

The immediate problem is new demand.  While there were 1.8 million households formed in 2011, only 16.9 percent of them signed up for such services. At the margin, for whatever reason, new households are simply exhibiting radically new behavior where it comes to buying of TV entertainment subscriptions.

It might be overreaching to argue that the maturation of the legacy subscription TV business means an immediate or near term shift to new online forms of consumption.

Consumers are turning to their iPads, laptops and mobile devices to watch video on the web rather than on TV. But so far that has been largely supplemental to traditional consumption, as Netflix and Redbox, Hulu (News - Alert) and YouTube have shown.

Still, only about nine percent of U.S. respondents to a Deloitte survey say they have stopped buying video entertainment subscriptions from cable, telco or satellite providers, while another 11 percent report they are considering doing so.

Perhaps the important finding, which suggests why virtually everybody believes some form of over the top Internet delivery is the inevitable replacement product, is why people are considering doing so. The 11 percent who report they are considering abandoning subscription TV services say they now can watch almost all of their favorite shows online.

One would guess that, as typically is the case when product substitution occurs, that the first “switchers” are users for whom the existing solutions have low value, compared to product price.

If you really care about ESPN (News - Alert) or other video subscription channels, you cannot easily replicate the experience online.

The classic example of an early “cord cutter” is the person who doesn’t watch much television in the first place and does not have children or other family members who do enjoy television, making a $100 a month fee “high” in relationship to value.