Netflix, HBO, and Disney profits show the streaming boom is over

Right here’s an ordinary streaming TV joke/grievance: There are such a lot of totally different companies that somebody ought to simply put all of them collectively, and you then’d simply pay one month-to-month charge for every part. You recognize, similar to cable TV!

Ho ho ho.

The factor is, none of the folks working streaming TV companies suppose there are going to be a ton of TV companies in the future. They suppose they are going to ultimately consolidate into a number of large gamers.

We’re already seeing a few of that, which is why Warner Brothers Discovery is on the point of launch a yet-to-be-named service that can mash up HBO Max and Discovery Plus, which implies you’ll be capable of pay for White Lotus and Dr. Pimple Popper with one month-to-month invoice. Cautious what you would like for!

In the meantime, in the event you try Wall Road earnings stories, you may see fairly clearly why typical trade knowledge is that the trade is going to get smaller, no less than when it comes to suppliers: It’s actually, actually costly to run a streamer, particularly at the begin.

And in the event you don’t wish to dig by means of public filings, don’t fear, we’ve achieved it for you. Right here’s a fast snapshot of the cash Netflix made in the first 9 months of 2022, and the cash lots of the would-be Netflixes misplaced:

There are some caveats right here, together with the undeniable fact that we’re utilizing barely totally different definitions of profits and losses for every streamer as a result of they every use totally different ones of their filings. Add to that the undeniable fact that Warner Bros. Discovery’s complete is decrease than it ought to be as a result of we solely had two quarters of knowledge out there for this chart.

However the large image is that there’s a ton of crimson ink, and there could be a lot, far more if we 1) went again additional as a result of a few of these companies have been bleeding cash for a number of years and 2) may see the P&Ls of Apple and Amazon, that are burning large piles of cash on streaming however are so large that it doesn’t matter to them or their traders (for now).

This chart additionally explains why exhibits you like (however different folks don’t) are more likely to disappear now than they have in the past: A few years in the past, Wall Road was telling media corporations that they need to emulate Netflix and fear about progress, not losses. That modified final 12 months, for Netflix and for everybody else. Now, Netflix founder Reed Hastings preaches the deserves of working revenue, and his rivals are speaking about rationalizing prices.

Streaming isn’t going away. Information agency Ampere Evaluation predicts international content material spending will hit $243 billion this 12 months. That’s a 2 % enhance, and it’s down fairly a bit from the 6 % progress we noticed in 2022. But it surely’s means, means up from the $128 billion we noticed a decade in the past. You’re nonetheless going to have plenty of selection for a very long time.