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Streaming isn’t just hurting cable companies anymore

The rise of streaming is no laughing matter for the company that owns Comedy Central and a slew of other cable channels.

The rise of streaming is no laughing matter for the company that owns Comedy Central and a slew of other cable channels.

Investors have punished Viacom after saying the company expects a decline in revenue in the next few months from licensing shows by company-owned outlets like Comedy Central, MTV, and Nickelodeon to third parties.

Viacom’s woes are the latest sign of damage spreading among traditional TV players from the exploding popularity of streaming.

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The weak outlook was part of the company’s latest quarterly profit report, which showed solid earnings for the recent period from April to June. But no matter. The glum forecast of what’s to come was enough to send Viacom shares plunging 14 percent on Friday.

It’s no secret that cable systems — the companies that run wires into your house and send a monthly bill — have taken a hit from increased competition due to streaming. But Viacom’s shaky outlook underscores how price pressure is rippling through all corners of the TV industry, causing some traditional content producers to suffer as well.

Consider:

  • The cable system Charter Communications earlier this year moved several Viacom-owned channels to its top premium tier for customers, rather than the basic tier. That will likely help customers save money on their bills, as it makes it easier to opt out of the channels. But it means less reach and licensing revenue for Viacom.
  • Viacom competitor Disney has also shown signs of struggling in the cable arena. Its ESPN network, previously considered an unstoppable goliath among cable channels, laid off 100 on-air personalities and writers this spring.
  • In its own recent profit report, hailed by Wall Street, Netflix noted that it’s producing more content in-house these days. That gives the company greater negotiating leverage over third parties like Viacom from which it also licenses content to flesh out its lineup.

The Silicon Valley upstart has long been frank about its aims in that regard. In a letter to shareholders last year, Netflix’s top executives wrote that they want to “own more of our original programming to allow for greater creative and business control.”

Now, we have a clearer answer to the unspoken question: Control over whom?