Viacom (VIA, VIAB) is no stranger to bad news. The cable network has reported bad quarters many times in the past, which is partly why the stock is down 16% over the last five years. But it’s rare for the stock to plunge 8% in a day—yet that’s exactly what happened when the company reported its last earnings results.

If you just looked at the headline numbers, you might be confused. Revenues rose 8% to $3.36 billion—which missed expectations by a mere $50 million. Furthermore, EPS of $1.17 was 11 cents higher than expected. So why did the stock tank so much?

This is where professional analysts need to dig in. The headline numbers tell one story, but it’s a shallow and often inaccurate one. When we look more closely, we see a lot of troubling signs.

Movie releases were a headwind, but advertising revenues were very disconcerting—and that’s been the flash point for Viacom’s future for a long time. Domestic advertising revenue fell 2% on a year-over-year basis, which was offset by a 14% increase in international advertising revenue. Still, Viacom’s international expansion potential isn’t really where Wall Street is focused; they want to see Viacom improve its growth in America. But, as the company admitted, ad revenue fell because of lower impressions.

In other words, people are watching less Viacom.

And if they’re watching less Viacom now and they continue to watch less, there will be less ads to sell in the future. This has been happening to Viacom for years now, so there’s been hope that the decline in viewership would eventually stop. It hasn’t—at least not yet. And that leads investors to ask if Viacom will eventually shrink into non-existence.

Thus the selloff isn’t really as much of an over exaggeration as it might seem. Missing revenue estimates by $50 million when your revenue is $3.36 billion seems trifling. It’s barely a 1% miss. But when Viacom has extremely easy comparable figures from a year ago, this continued downward spiral of lower viewership and ratings is a really big problem. Compound this by the fact that Viacom has given no evidence that it’s making up for the lower T.V. viewership by making savvy digital deals, and you have a real recipe for disaster.

Of course, we might see the market forgive Viacom soon and see its stock price rise. We may also see the death spiral of lower ratings stop. For now, the market has low expectations. And that means analysts need to go in and see if there’s any reason to think the market might be wrong—and now may be the time to bet on an improvement for the network.

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