News Corp. (NWSA), Time Warner (TWX) and Comcast (CMCSA), which own the major cable news channels, are throwing a huge party that not enough people want to attend.

The audiences for Fox News Channel, CNN and MSNBC are waning. In fact, the ratings are downright depressing. As Jack Shafer of Reuters noted, CNN recently attracted its smallest prime-time audience since September 1991, with the fewest viewers in the coveted 25-to-54 demographic since July 2008. 

The audience at MSNBC declined last year after the abrupt departure of Keith Olbermann. Viewership has rebounded since, and MSNBC has maintained its lead over CNN in prime time. Rachel Maddow, an Olbermann protégé, "brought in the highest ratings on her network's prime-time lineup in both demo and total viewers -- and fared better than the prime-time lineups at CNN and HLN" in demo and total viewers, according to Mediaite. Nonetheless, MSNBC is facing the same pressures as its rivals.

According to Shafer, the first signs that the cable news audience had peaked appeared in a March 2011 study by the Pew Research Center, which showed that the combined median viewership for CNN, Fox News and MSNBC had plunged 16% that year to 3.2 million. That was the first drop in median audience for the channels since 2006.

The problems facing the cable news business are not new. Viewers flock to the channels when there is huge news such as the Casey Anthony trial and tune out in droves when the show is over. Efforts to attract more viewers in prime time have come up short.

Take Piers Morgan. The former tabloid news editor was brought in by CNN last year because the ratings for his predecessor, Larry King, had plunged for years. Executives at the Time Warner channel surely were expecting better.

"Last week, 'Piers Morgan Tonight' averaged 429,000 total viewers," according to the Los Angeles Times.  "How bad is that? Well, Morgan's show premiered in January 2011 with 2.1 million. And his predecessor, Larry King, was averaging 657,000 in late 2010 -- a level that was considered unacceptable at the time."

The well-spoken Brit, though, is a ratings juggernaut compared with "Anderson Cooper 360," which averages a "catastrophic" 95,000 viewers in the 25-to-54 demographic, according to the newspaper. It's no wonder that Time Warner brass are reportedly demanding that CNN improve its performance. What's ironic is that CNN's just-the-facts approach is precisely what the public says it wants. The reality is that they prefer the opinionated broadcasts of Fox and MSNBC.
 
Fox remains both the ratings and money leader in the cable news wars. The Project for Excellence in Journalism estimates that the Rupert Murdoch channel earned $869.2 million in 2011,  up 12% from 2010. CNN and sister network HLN earned $595.8 million, while MSNBC earned $186.6 million, both gains of about 11%.

News Corp. reportedly spent more than $700 million on gathering news at Fox News in 2011, ahead of its rivals. These figures will likely increase this year because of the Olympics and the presidential election. But times are changing.

The cable news channels are going to have to justify their expense, which is becoming increasingly difficult as the media world becomes more diffuse.

 Jonathan Berr does not own shares of the listed companies.