Media companies try to spend their way out of cable TV crunch

Los Angeles

MEDIA companies have settled on a strategy to combat declining viewership at their TV networks: spend, spend, spend.

Discovery Communications Inc, Viacom Inc and Starz have all said in recent weeks that they must spend more on programming. While that's good for viewers - who get to watch an unprecedented number of new TV shows - it's worrisome for investors who have already sent media stocks tumbling over concerns about shrinking TV audiences and slumping advertising sales.

"All these companies have been raising the amount they're spending on programming pretty consistently," said Doug Creutz, an analyst with Cowen & Co. "TV is losing audiences, and you're trying to have new stuff to keep audiences engaged with your p…