Walt Disney Co. (DIS) investors may be focused on the struggles at its sports network ESPN, but ratings at some of its biggest networks are also declining, raising concerns about its future prospects in cable TV.

The Wall Street Journal, citing show ratings data from Nielsen, reported the viewership at Disney Channel, its kid-focused cable TV channel, and Freeform, formerly ABC Family, which is geared toward teens and young adults, are seeing huge declines in ratings. Meanwhile, SNL Kagan, an industry consulting, firm told the paper the two Disney-owned channels each lost around 4 million subscribers during the past three years.

Young viewers, many of whom grew up watching YouTube and streaming videos from Netflix, are less inclined to watch cable TV the way their older counterparts do. That has hurt all media companies, but for Disney, which is already dealing with the rising cost for sports content at ESPN and a decline in viewership, a loss of younger viewers is particularly worrisome. (See also: The Market Cries Wolf on Disney's ESPN.)  

Cable's Part of Profit Pie

The Wall Street Journal noted that based on Nielsen data, prime-time viewing for those aged 2 to 34 has declined 34% during the past five years in general. It doesn’t help that 30% of Disney’s revenue and 43% of its profits came from cable television in its last fiscal year. Morgan Stanley told the WSJ that around 23% of the cable revenue and profits at the entertainment company come from networks including the Disney Channel and Freeform and the rest is via ESPN. Declining viewership also means less opportunity to sell merchandising from popular TV shows, whether toys, clothes or home products. That has long been a big driver of revenue for the company. (See also: Disney Expects a Merch Windfall From 'Spider-Man'.)

In an interview, Disney Channel President Gary Marsh said the entertainment powerhouse is trying to enhance its programming and move into mobile and online in a bigger way. “We see the migration,” the executive told the paper. “One of the challenges is trying to serve the viewership where they’re going as opposed to trying to drive them where we want them to go.” Marsh said the company will also pursue a path that enables it to boost its digital revenue with something potentially unveiled in the “near future.” The executive did acknowledge that Disney Channel lacked hits with some of its newer shows, which hurt ratings. Meanwhile, Freeform president Tom Ascheim said digital viewing of its channel has doubled during the past two years as it added shows online.