NEW YORK — Under other circumstances, 2006 might look like a pretty good year for the media industry. The Winter Olympics and a midterm election are sure to boost advertising spending, the economy is humming along and consumers seem to be spending.

But these are hardly normal circumstances. The broad shift of viewers and advertising dollars to the Internet is deeply troubling to many media companies, TV networks are grappling with the implications of ad-skipping technologies, and key advertisers like automakers and retailers are rethinking their ad budgets. Meanwhile, cable companies like Comcast Corp. and satellite broadcast providers like EchoStar Communications Corp. and DirecTV Group Inc. are facing a new threat from phone companies who are laying down ultrahigh speed fiber optic cables that can carry high quality video as well as data and phone signals to the home.

What's more, investors are charging the gates at several media companies, demanding that they trim down, split up, boost share buybacks or take other steps to increase shareholder value. Many already have greatly pared down their holdings, and the trend continues.

In November, Liberty Media Corp. told investors that it planned to issue a tracking stock for the home shopping network QVC and Liberty's related interactive assets. The company calls it another way to streamline its structure, following an earlier spinoff of its overseas businesses.

"The street is basically intolerant of confusion," said Harold Vogel, media investor and author of a textbook on the economics of the entertainment industry.

Viacom Inc., a major media conglomerate, will ring in the New Year with a split into two different companies — one built around the cable networks MTV and VH1, the other anchored by CBS and its TV station group as well as a large radio business, Infinity Broadcasting.

Radio behemoth Clear Channel Communications Inc. is spinning off its live entertainment division, and embattled magazine publisher Primedia Inc., having already pared down many of its holdings, is splitting what's left.

Despite their efforts, however, media companies still have a ways to go before regaining favor on Wall Street. Many investors worry about how they will adapt to the evolving technological landscape, and wonder whether the likes of Yahoo Inc. and Google Inc. may dominate the world of online advertising.

Time Warner, which has come a long way since the 2000 debacle where it agreed to be acquired by AOL, is under fire from billionaire financier Carl Icahn, who wants to nominate new directors and take radical steps to lift Time Warner's lagging share price, including a $20 billion share buyback and a spinoff of Time Warner's cable unit.

Time Warner is moving to meet shareholders' concerns, and is now buying back $12.5 billion of its own shares, up from an initial offer of $5 billion. It's also holding talks with several companies about a possible investment in AOL, which is now back on the upswing thanks to the boom in Internet advertising.

Other media companies are feeling worse pressure. Knight Ridder Inc., the second-largest newspaper publisher in the country, is under attack from its largest shareholders, who are demanding the company be sold.

At the same time, other newspaper companies around the country have also been cutting jobs and other expenses in an effort to contain costs as their revenues falter. Newsprint and employee benefits costs have been rising, while advertising growth has been tempered as more ad dollars move to the Internet.

Yet as Knight Ridder moved to please stockholders by buying back shares, the increased borrowing led to two downward revisions in its credit rating. Likewise, The New York Times Co. and Dow Jones & Co. also had their ratings lowered after borrowing money to acquire Internet companies.

"On the credit perspective, there is a benefit from portfolio diversification," says Heather Goodchild, chief media analyst at the Standard & Poor's credit rating agency. "If one of your cylinders is not firing, the others may be."

Tough to please everybody? You bet. Goodchild calls it a "tough love" time for the media.