It’s been a year-and-a-half since Viacom’s television channels increased their viewership. And Paramount, Viacom’s movie studio, is on track to have its worst year since 2009. The main problem is the that in the age of the Internet and distributed media, the company that created MTV and Terminator, and launched the careers of Jon Stewart and Stephen Colbert, is having a much harder time being the arbiter of cool.

But this isn’t a new problem for Viacom (VIA). The company has been in a revenue slump for more than three years. Sales at Viacom peaked in 2011 at $14.6 billion. They fell to $13.5 billion in the past 12 months. Until recently, though, that didn’t seem to matter.

That’s because CEO Phillippe Dauman, who took over from Redstone as CEO in September 2006, has done a masterful job making relatively blockbuster bottom lines out of the company’s receding sales. EBITDA margins have jumped from 27% when he took over the company to 32% last year.

Viacom’s profit performance has been far better than its rivals. Time Warner’s margins slumped from the high 20s to a recent 24% during the same time. Margins at 21st Century Fox (FOX) are up, but at 21% the company remains far less profitable than Viacom.

But there are signs that Viacom’s profit star may be dimming. As Comcast and other cable providers get bigger, it is going to be easier for them to squeeze price cuts out of Viacom and others if they don’t get big as well. That was the logic behind Fox’s failed bid last year to buy Time Warner (TWX). And Viacom is by far the smallest of the three major media players.

Even if it strikes a decent deal with the cable companies, Viacom, like all media companies, has to deal with the fact that more and more viewers are being entertained without paying for what they are watching.

That’s probably why the market’s reaction to Viacom’s recent profit slide has been so severe. The company’s stock is down 37% this year, and it has dropped in half in the past year. Its stock now has the lowest price-to-earnings ratio of the big media companies, a sign that investors expect Viacom’s profits to bomb.