Things are about to get real tough for media companies.

Yesterday, media stocks got killed as more doubts about the TV industry’s ad-supported business model surfaced.

Todd Juenger, an analyst at Bernstein Research, downgraded prominent media stocks Thursday, including Walt Disney and Time Warner, after concluding that TV advertising is undeniably in decline and affiliate fees from pay-TV providers are increasingly at risk.

“The market is now valuing U.S. ad-supported TV businesses as structurally impaired assets. We believe this is fair and warranted,” he wrote. “We have come to believe the affiliate fee revenue stream deserves a higher risk premium than it did before.”

With viewers flocking to online streaming options and skipping ads on their DVRs, the decline of cable or satellite TV customers is widely expected to accelerate, which would lower affiliate fees and advertising rates. And media stocks have been struggling since a flurry of recent industry earnings, most of them released in the last 30 days, underscored the concern.

Viacom fell 6.3% Thursday to end at $40.42. Disney, which lowered its cable network’s profit outlook in early August, was down 6% to $100.02.

Keep your head down gang, look for pink slips to start flying.

H/T USA Today