Cable and satellite providers like Dish have gained power while Viacom has lost it.
You can tell how badly things are going in a disrupted market when the various players start attacking each other, trying to win even a small advantage as the landscape around them continues to heave and crack. And that’s exactly what we see happening today in the conventional TV business between Dish Network and Viacom.
The tensions between the satellite-TV provider and the entertainment conglomerate have actually been ramping up for some time, but they only recently spilled over into public view, with Viacom warning viewers via a dedicated website that channels like Nickelodeon, Comedy Central and MTV could go dark for Dish subscribers as soon as Wednesday night.
Viacom is trying to get consumers to lobby Dish to continue carrying its content, but Dish CEO Charlie Ergen seems adamant that he wants a much better deal than the one Viacom is currently offering. During the company’s earnings conference call on Wednesday, he said that there was still some room for an agreement, but that if a blackout of Viacom channels does take place, it “could be permanent.”
Why is all of this happening? In many ways, it’s a classic supplier-distributor disagreement, in which Viacom and Dish are re-negotiating the terms of their relationship. Viacom VIAB wants the satellite company to pay more for the right to carry its channels, and Dish is balking at the price. But the fight is also a microcosm of what’s happening in the conventional TV business as a whole, and the struggle to cling to whatever shreds of power remain.
In the past, cable and satellite companies relied heavily on a favorable relationship with suppliers of content like Viacom, because without access to those channels, they wouldn’t be able to attract new subscribers or keep existing ones. At one time, MTV and Comedy Central were among the main reasons people signed up for networks like Dish.
Over the past few years, however, the power that this gave companies like Viacom has dissipated, thanks to the rise of streaming services such as Netflix NFLX and Hulu and other alternative sources of entertainment. Some “cord cutters” are getting rid of cable altogether, and younger millennial consumers aren’t even signing up for those services when they move into their own homes.
For Viacom, this means the company is in a significantly less dominant position when it comes to negotiating a new contract with a distributor like Dish VIAB . The existing deal between the two was signed seven years ago, before Netflix even existed, and has been extended through a series of short-term agreements since January.
Watch: Microsoft really wants to help Yahoo get sold
When the Dish Network looks at Viacom, all it sees is a company whose channels aren’t as popular as they used to be, but that is still asking Dish to pay higher rates because the original contract was signed so long ago. In a statement, Dish said Viacom “is asking hundreds of millions of dollars in increases, despite the changing landscape that includes drastically reduced viewership of Viacom channels.”
Viacom, meanwhile, is arguing that since Dish is no longer as big a player as it used to be either, it should be grateful for whatever it can get. On its website, the company says the most recent rate it offered the network was “the same privileged rate the biggest distributors receive, even though DISH is less than half their size.”
There’s an added level of urgency to Viacom’s dispute with Dish, because if it agrees to accept lower rates from the satellite company, that could have a ripple effect on the deals it has with other satellite and cable distributors. In many cases, such contracts have “most favored nation” clauses, which force Viacom to offer its content at whatever the lowest rate is across all of its distribution agreements.
Sign up for Data Sheet, Fortune‘s technology newsletter.
While the Dish Network’s reach and power have weakened over the past few years just as Viacom’s have, the satellite company is still in a somewhat stronger position than it used to be relative to the entertainment giant, because it knows that Viacom is already suffering from low viewership numbers, and that impacts its ad revenues.
The reality is that distributors like the Dish Network are arguably far more important to a company like Viacom than Viacom’s content is to them. If all of Viacom goes dark on the Dish Network, some subscribers might be upset, but likely not too upset—but for Viacom, a Dish black-out means it loses almost 14 million viewers overnight, which helps explain why its share price dropped almost 10% on Tuesday.
Dish hasn’t been shy about using its new muscle against other content providers either: It has taken recent disputes with both CBS cbs and 21st Century Fox fox to the point where both removed their channels from the network, but ultimately signed new agreements at what Dish felt were more favorable rates. Whether Viacom eventually folds its hand as well remains to be seen, but at this point Dish holds most of the cards.