NEW YORK (TheStreet) -- As the media industry moves to consolidate through multi-billion dollar mergers, the pressures surrounding one of Viacom's (VIAB - Get Report) prime properties, MTV, forces the company to make some drastic changes.

With consumers streaming and demanding more content, companies like Netflix (NFLX) and Hulu that provide on-demand TV, are being aggressive in acquiring popular shows, ratcheting pressure on Viacom. 

Now 33 years old, Viacom's MTV has continued to find ways to keep people watching. Although Viacom doesn't explicitly state how much revenue the channel generates for the company, Barclays Media Analyst Kannan Venkateshwar suggests MTV and Nickelodeon, two channels catering to the company's largest demographics -- ages 2 through 12 and 18 through 34, generate roughly 44% of the company's U.S. media network revenue and 27% of the company's overall revenue. 

"MTV, they are working off a cache that has worked for them in the past and will most likely continue to work for them in the future," Roger Entner, founder of Recon Analytics, said in a phone interview. "They continue to look for content that will knowingly create drama, have that shock value and keep people coming back." 

Viacom generated roughly $3.2 billion dollars during its second quarter ending on March 31, with $2.8 billion dollars in revenue from its Media Networks and the remaining $831 million courtesy of Viacom's filmed entertainment, including Paramount's The Wolf of Wall Street and Transformers: Age of Distinction. Advertising across all divisions generated $1.1 billion for the company. 

From its pledge in 1981 to be the "world's first 24 hour stereo video channel" to shaping our definition of reality television with seasons of The Real World, Viacom's MTV has provided consumers with music videos and drama reality television for three decades.

The network has developed and tweaked a formula to keep it afloat while seemingly defying the odds of a dwindling music industry and the inevitable pitfall of its core youth demographic outgrowing its service. 

"[MTV] is one of the core flagship companies that they have and it's disproportionately so. Sure, the music industry has big stars, publicity and things but the mobile industry is a $170 billion dollar industry and growing whereas the music industry is a $10 billion dollar industry and shrinking. Moreover, the impact that music has is very disproportionate to what it is actually worth," says Entner.

Alongside a shrinking industry, Venkateshwar notes the volatility of MTV's demographic.

"While the demographic that these networks cater to provides an opportunity from an advertising perspective, given advertisers tend to pay a premium for this base, this demographic is also susceptible to the biggest shift in consumption patterns caused by changes to technology and viewing habits," Venkateshwar said.

Uncharted Territory

In the past five years, MTV has veered away from its mission in favor of original, scripted content; a move that has undoubtedly shocked viewers and actors alike. MTV rebranded itself in 2010 after officially dropping Music Television from its logo back in 2010. Viewers can still find music on the channel's sibling sites, MTV Hits and MTV Jams, while the main channel focuses on reality and drama programming.

MTV is currently airing more than four original scripted programs, with additional shows slated to debut this year. These original shows will air alongside 26 reality-based television shows, award shows and other specials starring popular public figures including professional skateboarder Rob Dyrdek. As a brand MTV's programming has a reputation for quality and for ground-breaking entertainment.

Awkward actress, Greer Grammer, was instantly attracted to the role of Lissa- a quirky, off-the-walls character she portrays on the American teen comedy.

"It was a scripted show for MTV," she said. "I auditioned for the pilot and when I received the script, I was surprised by how good the writing was. It was really funny, and didn't sound like anything I had read at the time. It also didn't look like anything we have seen on television before."

As MTV lost its monopoly on the music video, most recently to Web sites such as YouTube and Vevo, it was forced to create its own niche of scripted and reality-based programs. A large share of MTV's scripted content continues to push the envelope, delving into matters of sexual and gender orientation, werewolves lurking in quaint towns and other issues that appear to be on the minds of millennials.

However, despite seeing diversity with regard to sexual orientation and content, programming continues to lack in the realm of racial diversity. 

"It's something we've heard for a while" says Greer when asked about racial diversity on the show. "I can't speak for the writers, producers of the show but I think we really did bank on Ming [portrayed by Chinese-Japanese actress Jessica Lu] to add that sense of racial diversity to a bunch of white kids living in the suburbs. It has definitely been one of the few things that the show has struggled with and we are trying to create a racially diverse and grounded show, and hopefully we'll begin to explore that in the future." 

Entner suggests the solution to such problems is at base a numbers game.  

"MTV is trying, but are they perfect? Probably not. People are making conscious decisions to include everyone but there is going to be underrepresentation -- but they want you to be able to identify with content because that's what keeps you coming back. But, there's a science behind it [television] and it boils down to how much money they will make and that ultimately has the power to influence casting and ultimately what we see." 

Pressures on the Parent

Even with owning a channel that continues to regenerate itself, Viacom has been unable to escape potential merger speculation. 

Media outlets have suggested Viacom should look to reunite with once-sister company, CBS (CBS). Viacom spun off from CBS back in 2005. However, despite being caught in the foray of speculation, Viacom has made moves to embrace the media age, while sustaining itself as a stand-alone media company.

MTV teamed up with the Spotify last month to provide viewers with curated playlists and music taken exclusively from popular shows. More than 100 playlists will be made available for streaming

Viacom is doing the same at Nickelodeon. Last month, Nickelodeon released a Web and mobile-exclusive television show entitled Welcome to The Wayne, an animated series chronicling the shenanigans of 10-year old Olly Timbers and his friends. The show will first air online and on the Nickelodeon app before formally airing on television. 

Sanford Bernstein Media Analyst Todd Juenger suggests a merger is unlikely due to its model.

"The wave of M&A, or at least anticipated M&A, sweeping across the media sector does not seem like it should impact Viacom much. It's hard to imagine the controlling shareholders being sellers of the company and there's not much they could acquire" writes Juenger in a press note released following Viacom's disappointing Q3 earnings.  

Viacom's handling of MTV has so far been successful but competition is hot on its heels. Vice co-founder and CEO Shane Smith has made it known that he wants to take the multi-platform media company to the heights and success of MTV.

"I've said that I want to be the next MTV, the next CNN, the next ESPN. Cue everyone rolling their eyes" Smith tells the New York Times in an interview.   

The two companies appeal to drastically different demographics: MTV creates original and reality based programming veered toward adolescents above the age of 16 while Vice provides a slightly older audience with news from around the world with an alternative edge. However, both companies have one thing in common, they have found what works for them and continue to use it to their advantage.

"MTV was built on an original concept: the pop-music video. Vice's appeal is that it has branded a certain kind of cool, but coolness is an ephemeral concept," writes the New York Times on the possibility of Vice merging with another media company.

Entner suggests Vice serves as a worthy competitor for MTV.

"Absolutely, Vice is a different take on all of that. And arguably, Vice has a lot more depth than MTV and has a much larger age appeal," Entner said. "At the same time, MTV is losing its target appeal as they are growing up. MTV really has to watch that their core doesn't get undermined." 

In response to whether Vice could usurp its position with the current generation, MTV Executive Vice President of Communications Jeannie Kedas simply stated, "MTV is the MTV of this generation, and it continues to regenerate itself. The MTV that this generation has seen is very different from anything else we've ever seen before."