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Viacom's weak forecast shows need for merger: analysts

NEW YORK (Reuters) - Viacom Inc (VIAB.O) could gain a leg up in negotiations with distributors and ward off declines in U.S. ad revenue and sales by finding a merger partner, analysts said on Friday.

Shares of Viacom, which owns MTV and Comedy Central, plunged as much as 13 percent on Friday, a day after it forecast lower sales to U.S. pay-TV companies and streaming video services this quarter.

Viacom, like other U.S. television networks, has struggled to retain viewers who prefer to watch shows and movies on tablets and phones, and must also compete with streaming services like Netflix Inc (NFLX.O) and Inc (AMZN.O) that are spending billions to create their own content.

Viacom Chief Executive Bob Bakish has taken steps that helped boost ratings, slow the decline of U.S. ad sales and win a key cable distributor back, but analysts and investors expect challenges ahead due to a long-term shift in consumer behavior.

"If you aren't selling, you need...