Want to Understand Television’s Troubles? Look at AMC.

Actors wearing fangs and fake blood roamed the basement of the Roxy Hotel in September in an ornate celebration of a new AMC Networks show, “Interview With the Vampire,” based on the wildly popular 1976 Anne Rice novel. Hopes rode high. Executives at AMC Networks — vaunted home of “Mad Men,” “Breaking Bad” and “The Walking Dead” — thought they had a hit for the streaming era.

They were right. The show became one of the most popular programs in the United States, according to data from Parrot Analytics, a research firm.

But that is not enough to solve a bigger problem: The money that the company makes from its streaming business, including AMC+, is not making up for the loss of revenue from its traditional cable channels, as people abandon their cable subscriptions and advertisers pull back on spending.

Late last month, James Dolan, the company’s chairman, made clear how troublesome that was for the company. He announced that there would be “large-scale layoffs” of 20 percent of the staff, because the “the mechanisms for the monetization of content are in disarray.”

It was a surprising admission for Mr. Dolan, whose family controls AMC Networks. The company has spent the last several years introducing a fleet of streaming services, including AMC+ and the horror-focused Shudder, and trumpeted their growth quarter after quarter on earnings conference calls.

“It was our belief that cord cutting losses would be offset by gains in streaming,” Mr. Dolan wrote last month. “This has not been the case.”

Those same forces are rattling the entire industry, hitting companies including Warner Bros. Discovery, Paramount and Disney. The number of adult scripted series ordered by TV networks and streaming companies fell this quarter, compared with the same period a year ago — a reflection of the new financial reality.

AMC Networks’ troubles give a particularly clear illustration of the pressures facing the industry because, unlike those other giant companies, it doesn’t have profitable theme parks or a major movie studio to help offset declines from cable subscriptions and advertisements.

Though AMC Networks doesn’t tell investors how much of its profit comes from traditional television, the media analyst firm MoffettNathanson has estimated that about 30 percent of the company’s roughly $3 billion in revenue last year came from fees paid by traditional TV distributors, including cable and satellite companies. About 12 percent came from the fast-growing streaming business, according to MoffettNathanson, with advertising, content licensing and other businesses making up the rest.

Traditional TV advertising is waning, too: In November, AMC Networks reported that its third-quarter U.S. advertising revenue was about $180 million, a drop of about 9.9 percent compared to the same period last year. It attributed the decline to a variety of factors, including lower ratings. AMC+, which costs $8.99 a month for a subscription, does not run ads.

Rich Greenfield, an analyst for LightShed Partners, estimated that AMC Networks had about 1,800 people working in its core business, which is waning.

“AMC Networks is the walking dead,” Mr. Greenfield said.

In some ways, AMC Networks is a holdover from an earlier media age. The U.S. media market was once populated with dozens of smaller companies like AMC Networks, which was founded as a joint venture among several TV companies during the cable boom of the 1980s. But as the cable business matured, deal-making became the surest path to growth, and rivals began swallowing one another.

AMC Networks responded with a different move. Rather than selling out to a big rival with a general-interest streaming service, AMC Networks struck deals to acquire smaller companies and started niche, targeted services. In 2014, the company introduced Sundance Now, a streaming service that now offers prestige dramas. The horror-focused Shudder came the next year. By 2021, AMC Networks executives were comparing the company’s services to boutiques in a world of department stores.

The strategy won some converts. MoffettNathanson said in November 2021 that AMC Networks’ streaming revenue growth would outpace declines in traditional television, adding that the network had a “clear (and realistic) path forward.” Last month, Christina Spade, the company’s chief executive, said on a conference call that AMC Networks had attracted 11.1 million subscribers for its bundle of streaming services, which include Shudder, AMC+, Allblk, Acorn TV and Sundance Now.

But three days after the call, MoffettNathanson warned that the traditional TV business was declining faster than expected, saying that AMC might never return to the free cash flows it once generated. Then, on Nov. 29, AMC Networks said that Ms. Spade had stepped down, about three months into her tenure as chief executive. The board concluded that she wasn’t the right leader to steer AMC Networks through the turbulent period ahead, according to a person with knowledge of the decision, and gave her a separation package worth about $10 million.

Ms. Spade did not respond to requests for comment.

AMC Networks’ next moves will be determined by Mr. Dolan, who on Dec. 5 became executive chairman of the company, giving him latitude to work directly with AMC Networks’ management team. In a statement, AMC Networks said that it would continue distributing its shows and movies across multiple platforms, emphasizing advertising-supported streaming and making its traditional TV business more profitable with targeted advertising.

“The cost measures we are taking are focused on helping us navigate the current challenges being felt across the media industry as well as the broader economic outlook,” the statement said.

As Mr. Dolan contemplates the future of AMC Networks, industry speculation will inevitably turn to whether he will join his peers in considering a sale to a bigger rival. But it’s an inopportune time for that. Share prices are down across the media industry, as investors become increasingly skittish of unprofitable streaming services and declining cable TV businesses. And the ad market has soured, threatening to depress valuations further.

Complicating matters, AMC Networks doesn’t own some of the shows that it made famous, including “Mad Men,” which is owned by Lionsgate, and “Breaking Bad,” which is owned by Sony, according to people with knowledge with the matter. But AMC Networks does own “The Walking Dead,” and it has already begun to promote new shows from the Anne Rice Immortal Universe franchise. The company’s library value could weigh on any price that the company is able to command in a sale.

“Scary to be a buyer of AMC Networks as their channel portfolio is no longer must-carry by distributors,” Mr. Greenfield said.