Time Warner’s leverage during the CBS fight, which included a 31-day blackout of CBS programming for its subscribers, probably was stronger then that it ever will be again. Some 92 million households see the programmers’ content via cable and satellite television subscriptions. CBS needs pay TV subscribers to build ad revenues and audiences that will watch even more episodes on Internet outlets like Amazon.com (AMZN) and Netflix (NFLX). That’s why CBS didn’t get everything it wanted from Time Warner when the dust settled.

But Time Warner, like all cable companies, needs programming even more. Without popular content, it can’t continue to sell cable subscriptions. NFL games, “Under the Dome,” “Big Bang Theory” — some of the most popular programs on air now – are provided by CBS through channels that include Showtime, TMZ and Smithsonian. That’s why Time Warner mostly caved to CBS demands, reportedly roughly doubling the fee-per-subscriber it paid CBS. It’s also a reason that Time Warner shareholders were more shaken up by the blackout than CBS shareholders.

NYSE:TWC data by YCharts

The results of this incident don’t bode well for traditional pay television outlets like Time Warner, Directv (DTV), Comcast (CMCSA), DISH Network (DISH), and Charter Communications (CHTR), who will almost certainly see their bargaining power erode further in the future. Even before the Time Warner/CBS brawl, these program buyers were acknowledging in regulatory filings that negotiations over programming fees are likely to get more difficult and disruptive in the future.

It’s hard to exaggerate the problem this presents for cable and satellite companies and their shareholders. Winning the fee wars – or at least minimizing their damage — is one of the most important jobs cable executives do to keep shareholders happy. Programming fees represent the single biggest expense for most traditional pay television companies. If Time Warner, one of the largest cable companies in the country, couldn’t wrestle CBS down very far, its competitors won’t likely fare well either. Rising programming costs is one reason the industry’s costs have been growing.

TWC Cost of Goods Sold TTM data by YCharts

Programming companies like CBS and Walt Disney (DIS) have the advantage of a growing market for their content outside of cable and satellite TV. Apple (AAPL), Google (GOOG) and Intel (INTC) all scramble to get into TV series streaming over the Internet along with Netflix, Amazon and Hulu.com. While TV series streaming isn’t a huge market yet, it’s certainly where the growth is. Netflix has trouble with rising content fees too, but its revenues are running up fast enough to keep the share price rising quickly.

NFLX Revenue TTM data by YCharts

Cable and satellite TV subscriptions, on the other hand, have been falling off steadily since about 2006. They’re down some 769,000 subscribers in the second quarter alone, according to a report in The Hollywood Reporter Wednesday.

A more devastating blow may come later from HBO. Traditionally, cable and satellite companies could rely on HBO to trap customers for them, as HBO has steadfastly refused to stream its programs for viewers that do not subscribe to traditional pay TV. However, HBO reportedly is in negotiations with Apple and Google. For the first time, viewers may be able to bypass those cable and satellite bills to watch “Boardwalk Empire,” “Game of Thrones,” and HBO’s other wildly popular content.

For now, the markets are viewing the Time Warner/CBS settlement as a reprieve for the cable and satellite companies. Cable shares, in particular, remain popular because of the fast growing businesses they are building in selling Internet connections.

NYSE:TWC data by YCharts

Internet services have a long way to go before they replace traditional pay TV. But a transition is on the way, and the programmers see it coming. For cable and satellite investors, the situation is disturbingly reminiscent of another industry that found itself split between new technology and old. Telecom companies like Verizon (VZ) and AT&T (NYSE:T) found their traditional landline subscribers falling off more than a decade ago. They still struggle from the drag of those divisions even while their mobile technology divisions go great guns. As their meager share price gains over the years show, one declining old school business can dampen the joy of investing in a company for a very long time.

Dee Gill, a senior contributing editor at YCharts, is a former foreign correspondent for AP-Dow Jones News in London, where she covered the U.K. equities market and economic indicators. She has written for The New York Times, The Wall Street Journal, The Economist and Time magazine. She can be reached at editor@ycharts.com. Read the RIABiz profile of YCharts. You can also request a demonstration of YCharts Platinum.