The streaming boom is over

Jennifer Coolidge stars in the second season of HBO’s White Lotus. | Courtesy of HBO

Streaming isn’t going away, but go-go spending is going, going, gone.

Here’s a standard streaming TV joke/complaint: There are so many different services that someone should just put them all together, and then you’d just pay one monthly fee for everything. You know, just like cable TV!

Ho ho ho.

The thing is, none of the people running streaming TV services think there are going to be a ton of TV services in the future. They think they will eventually consolidate into a few big players.

We’re already seeing some of that, which is why Warner Brothers Discovery is getting ready to launch a yet-to-be-named service that will mash up HBO Max and Discovery Plus, which means you’ll be able to pay for White Lotus and Dr. Pimple Popper with one monthly bill. Careful what you wish for!

In the meantime, if you check out Wall Street earnings reports, you can see quite clearly why conventional industry wisdom is that the industry is going to get smaller, at least in terms of providers: It’s really, really expensive to run a streamer, especially at the start.

And if you don’t want to dig through public filings, don’t worry, we’ve done it for you. Here’s a quick snapshot of the money Netflix made in the first nine months of 2022, and the money many of the would-be Netflixes lost:

There are some caveats here, including the fact that we’re using slightly different definitions of profits and losses for each streamer because they each use different ones in their filings. Add to that the fact that Warner Bros. Discovery’s total is lower than it should be because we only had two quarters of data available for this chart.

But the big picture is that there’s a ton of red ink, and there would be much, much more if we 1) went back further because some of these services have been bleeding money for multiple years and 2) could see the P&Ls of Apple and Amazon, which are burning big piles of money on streaming but are so big that it doesn’t matter to them or their investors (for now).

This chart also explains why shows you love (but other people don’t) are more likely to disappear now than they have in the past: A couple of years ago, Wall Street was telling media companies that they should emulate Netflix and worry about growth, not losses. That changed last year, for Netflix and for everyone else. Now, Netflix founder Reed Hastings preaches the merits of operating income, and his competitors are talking about rationalizing costs.

Streaming isn’t going away. Data firm Ampere Analysis predicts global content spending will hit $243 billion this year. That’s a 2 percent increase, and it’s down quite a bit from the 6 percent growth we saw in 2022. But it’s way, way up from the $128 billion we saw a decade ago. You’re still going to have a lot of choice for a long time.