While this week may not have been able to compete with the moon landing, the finale of MASH, or the outcome of the first season of Survivor, it was still an incredibly significant week for the television industry.

The parade of second-quarter earnings reports from the major showbiz conglomerates made it crystal clear that there was no getting around the 800-pound gorilla on the balance sheets of major media outlets. It was long overdue for the ratings that had long been reserved for old-fashioned cable channels to be cut by double digits.

And that’s exactly what happened this week, when Warner Bros. Discovery took a staggering $9.1 billion writedown on the value of its core cluster of ad-supported channels (think TNT, TBS, Cartoon Network, Discovery, Animal Planet, Food Network). Paramount Global did the same a day later, slashing $6 billion from the value of its MTV group of channels (think MTV, VH1, Comedy Central, Paramount Network). AMC Networks ended the week Friday with a $97 million writedown to account for decreased earnings from BBC America and its international cable channels.

To be clear, the decision to impose these fees doesn’t mean that these channels incurred billions of dollars in losses during the March-June period of the quarter. To use WBD as an example, it means that $9.1 billion is the calculation made to reconcile previous earnings projections with the harsh reality of revenue and profits actually generated. The level of profits these channels can reasonably expect to make has evaporated in recent years, so the write-down lowers everyone’s expectations. It’s bitter medicine for competitive C-suite types, as it’s a form of admitting defeat. But now there will be far less pressure to find ways to shore up ailing assets or convince Wall Street that cable TV cancellations really aren’t a big problem. Because they are. Every time a customer cancels traditional video service from Comcast or Charter or another MVPD (multichannel video program distributor), Hollywood feels the loss. It’s simple math – MVPDs pay channel owners a monthly carriage fee based on the number of subscribers paying them for the service. Fewer cable subscribers overall means lower affiliate fees.

In other words, Hollywood’s traditional media conglomerates need to face reality. They can’t air episodes of “Ridiculousness” on MTV all day long and expect Comcast, Charter, DirecTV, YouTube TV and others to pay Paramount Global the same fee that MTV charged to sustain its success with original series like “The Osbournes” and “The Real World.”

The impact of these lower valuations is significant in many ways for the ongoing functions of the company. They affect the company’s share price and market capitalization. They affect a company’s ability to take on debt, its creditworthiness and interest rates, and the extent of its mergers and acquisitions ambitions.

The reckoning that began this week will undoubtedly affect other media giants as well. Disney, which also announced earnings this week, did not take a formal write-down of its cable television assets. The Mouse House provided investors with a much more positive picture of the finances of its direct-to-consumer unit. Building Disney+, Hulu and ESPN+ has cost Disney about $7.1 billion in losses since January 2022. The low point came in the fall of 2022 with the $1.4 billion quarterly loss that led to the firing of Bob Chapek and the return of Bob Iger as Disney CEO.

But even after streaming losses were trimmed to $19 million in the quarter and there were new signs of life at the box office (thanks, “Deadpool and Wolverine” and “Inside Out 2”), Iger still had to face tough questions from Wall Street about flagging activity at its theme parks. The resilience of Disney’s experience businesses has boosted Disney’s numbers in recent quarters. The concerned tone of analyst questions about the demand horizon on Disney’s earnings call said it all. Streaming is growing, but not fast enough to offset the decline in traditional linear cable channels that once seemed to have a license to print money, namely ESPN and Disney Channel.

The financial adjustments to WBD and Paramount’s linear assets are the long-awaited second blow after Hollywood recognized the streaming channel’s growth potential and shook the industry two years ago. The shock came in April 2022, when Netflix’s dizzying subscriber growth came to its inevitable end. When Netflix seemed to stagnate at around 230-250 million subscribers worldwide, Disney, WBD, Paramount and Comcast were forced by the force of business to temper their lofty ambitions of amassing over 500 million paying customers worldwide.

With the cable TV write-offs, Hollywood now faces the reality that the good old days of double-digit growth in advertising and affiliate fees are not going to return. So the sobering news of the Paramount write-off came with the sad news that another 15% of the company’s U.S. workforce, or about 2,000 employees, will be laid off. Paramount can no longer justify incurring such high overhead costs on assets that are melting away — assets that are still profitable, but are shrinking rather than growing.

The perfect storm of bad news surrounding the pay-TV sector has also been compounded by the fact that merger and acquisition activity is not a solution to the problem. The 2022 merger of then-WarnerMedia and Discovery was a big bet that both companies would fare better in tough times by amassing more market share on cable, rather than less. But after eight straight quarters of double-digit advertising declines across the combined WBD cable group, as MoffettNathanson’s Robert Fishman noted this week, hopes for a significant turnaround have evaporated. “Advertisers’ willingness to spend money on linear cable networks outside of sports (and to a lesser extent news) has simply disappeared as viewers leave the ecosystem and digital alternatives gain sophistication and reach,” Fishman wrote in a note after weak Q2 results pushed WBD’s stock price to an all-time low.

Paramount Global’s recent decision to accept Skydance Media’s takeover offer came after the company ran out of time to build out the Paramount+ platform to offset a decline in its cable business. Some of the layoffs announced this week were in preparation for the Skydance transaction, which is expected to close next year. But even without a looming merger, Paramount would have little choice but to cut jobs after drastically slashing prospects for channels that are traditionally labor-intensive to operate.

The changing fortunes of the pay-TV industry were also reflected in the news that Broadcasting & Cable magazine will soon cease operations (in full, not just in print) after more than 90 years as a weekly business magazine. (Full disclosure: I was proudly on the cover of B&C from 1995 to 1997.) The end of the magazine, which had been a radio and TV station staple for years, sparked a wave of nostalgic “remember those days” thoughts in the tight-knit community. So many people found their first job in TV by looking through the job ads in the back pages of B&C.

It was not difficult to predict the dramatic turnaround for cable television. diversity said it four years ago with our cover story “RIP Cable TV” in June 2020. But seeing the numbers crunched out in dollars and cents still feels like a moment of mourning for a once proud sector.

There is much to study and learn from this turbulent time in media. In the 1990s and early 2000s, the cable business seemed invincible as it brought the multi-channel revolution to America’s living rooms. During my time at B&C, the “broadcast” side of the house was considered a dinosaur, an outdated medium that would eventually be completely replaced by cable.

Nearly 30 years later, ABC, CBS, NBC and Fox are in better shape than TNT, USA Network and other former cable pillars. Of course, it is the strong sports rights that keep them healthy. Another important reason the Big Four are not going away is that they still benefit from the uniqueness of the broadcast network model. As in the days of William Paley and David Sarnoff, broadcast television is based on a local-national partnership between the networks and their 150-plus affiliate stations across the country. The local stations air local news and programming during the day and switch to network programming in the evening. The distribution of all these affiliate stations across the 210 Nielsen-measured U.S. television markets means that you can get ABC, CBS, Fox and NBC for free virtually anywhere in the country if you have a TV with a digital antenna.

The 180-degree turnaround in cable television in recent years is a good reminder that the invisible hand of the market is constantly moving. Nothing stays the same for long.

When AT&T made its ill-fated deal to acquire Time Warner in 2016, TNT and CNN were high-profile assets of the Turner division, which was then valued more highly overall than HBO. Indeed, cable channels, especially those offering general entertainment, were easily replaceable by streaming platforms once consumers got used to the technology and the on-demand format. The construct of local and national broadcast networks—with their enviable reach and regional specificity—is not so easily replicated. There are lessons to be learned from this in measuring staying power and lasting value.