Due in part to the rapid changes that have occurred in the way we consume media, Ten Network Holdings Limited (ASX: TEN) and Nine Entertainment Co Holdings Ltd (ASX: NEC) have had a miserable time. Since Netflix launched in Australia on 31 March 2015 their shares have dropped by 37% and 20%, respectively.

Through its Netflix competitor Stan – a joint venture with Fairfax Media Limited (ASX: FXJ), Nine Entertainment is at least trying to combat this. Things have looked promising for Stan so far, with the company expected to have increased its total subscriptions to 700,000 this month. This is still some distance behind Netflix which had over 1 million subscriptions in Australia as of the quarter ending in December 2015.

If this wasn’t bad enough for the two companies, things may be about to get even worse.

Facebook announced their quarterly earnings this week and beat analysts’ expectations hands down. For their latest quarter advertising revenue grew by 57% year-over-year to a massive US$5.64 billion. In this increasingly digital world it seems as though advertising on television could be about to take a rapid decline in a similar way that newspaper advertising did.

This does make sense when you think about it. Television advertising cannot narrow down and target different demographics as precisely as Facebook and Google can. The television networks do the best they can do with what they have got available to them, but the return on investment for advertisers is increasingly better through digital advertising. Facebook and Google know an awful lot about its users and can use this to deliver relevant advertising on behalf of their clients.

While this isn’t necessarily going to happen overnight, if the newspaper industry is anything to go by it can happen quicker than you’d expect. According to Morgan Stanley, newspaper advertising in Australia dropped from $4 billion per year to just over $1.6 billion a year in the space of 7 years.

With digital advertising finally overtaking television advertising in Australia this year, the television networks will hope this isn’t the start of what many see as an inevitable decline. If it does eventually happen it will be difficult to see how Ten Network, Nine Entertainment, and Seven West Media Ltd (ASX: SWM) will all be able to remain profitable.

Foolish takeaway

On paper some of these media companies may appear to be very cheap, but due to their uncertain futures I would be hesitant about investing in them and I wouldn’t be surprised to see the shares dragged even lower. I believe that Netflix, Google, and Facebook have the potential to shake up the media landscape in Australia considerably and to a point where it might become unrecognisable in a decade.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.