Legacy media companies like Paramount are increasingly weighed down by their traditional TV businesses, as declining cable revenues and accelerating cord-cutting continue to erode earnings in a shift toward streaming dominance.
In the fourth quarter of 2025 (reported in early 2026), Paramount's TV Media unit—which includes its linear cable networks—saw revenue drop 5% year-over-year to $4.71 billion. The decline stemmed primarily from softer advertising demand (down 10%, partly due to the absence of 2024's political spending and events like the Big Ten championship) and a 7% fall in affiliate revenue from shrinking pay TV subscriber numbers. Despite these pressures, the unit's adjusted operating income before depreciation and amortization (OIBDA) rose 15% to $1.1 billion, thanks to aggressive cost management.
This performance reflects broader industry challenges for legacy media. Cable networks' share of total U.S. TV viewing has plummeted to just 21.2% in January 2026, down sharply from 35.6% in January 2021, according to Nielsen data. Streaming now commands around 47% of viewing time. Cord-cutting continues at a rapid pace, with millions of households abandoning traditional pay-TV packages annually in favor of on-demand streaming services.
Paramount executives acknowledged the ongoing headwinds, stating they expect some revenue decline in the TV Media unit throughout 2026, "mostly in line with the industry headwinds around pay TV."
While the company anticipates overall revenue growth of 4% to $30 billion for the full year—driven largely by streaming gains at Paramount+ (which added subscribers and saw 17% revenue growth in Q4)—the legacy cable segment remains a persistent drag.
Management noted that advertising declines should moderate somewhat compared to 2025, aided by potential political spending cycles, but affiliate revenue pressures from pay-TV subscriber losses are expected to persist.
Overall, these trends highlight a pivotal transition in the media landscape: legacy linear TV operations are becoming a growing liability for earnings, even as companies like Paramount pivot toward streaming to offset the declines and position for future growth.