In this articleNFLXPSKYWBDDISCMCSAFollow your favorite stocksCREATE FREE ACCOUNTIn an aerial view, the Netflix logo is displayed above Netflix corporate offices on October 7, 2025 in Los Angeles, California.Mario Tama | Getty ImagesThere’s a love affair on Wall Street between investors and streaming.The romance started about a decade ago when consumers began cutting the cord with cable TV bundles en masse in favor of direct-to-consumer streaming apps. However, where investors were once enamored with subscriber growth, rewarding companies that were able to expand their consumer reach, their attentions have now shifted toward profitability.To meet this new expectation, streaming companies have raised the prices of their services, cracked down on password sharing and delved into the ad-supported space. It’s also sparked the likes of Paramount Skydance to seek out the acquisition of Warner Bros. Discovery for its extensive library of content and top-tier streaming service, HBO Max, in order to compete.While streaming continues to drive media stocks, especially around quarterly earnings, it’s not clear when — or if — it will start driving profits for the smaller players. “Is streaming a good business?” Robert Fishman, senior research analyst at MoffettNathanson, posed in a March research note to investors. “We raised and debated this critical question over the years leading us to determine the answer is yes, albeit only for those services with sufficient scale.”For legacy media companies, streaming has yet to fully supplant the profits and advertising revenue of linear TV. Of course, both of those metrics have been in decline for companies like WBD, Paramount and its peers. In response, streamers have largely raised subscription prices for consumers, begging the question of where the ceiling is for streaming costs. Between higher fees and the sheer number of services needed in order to have access to all content, consumers are starting to balk. Still, with these continuous linear TV declines, investors cling to streaming as a bright spot, especially for companies that have made it profitable. Disney has been among the steadiest of legacy media companies when it comes to a profitable streaming business, but Paramount and WBD have seen profitable quarters and Comcast’s Peacock is narrowing losses. “With streaming no one’s reporting sub numbers anymore, because now it’s all about profitability,” Doug Creutz, senior research analyst at Cowen, told CNBC. “And that’s the metric by which these these businesses are being judged. It’s, you know, can you get to 10% operating profit? Can you get 15%? Can you get 20%? Can you get 25%? Can you get to where Netflix is?”Netflix reported operating margin of 29.5% in 2025. Meanwhile, Disney, for example, guided investors to an operating margin for its direct-to-consumer business of 10% in fiscal 2026.Workers prepare a large sign advertising a Disney movie while San Diego prepares to host thousands of visitors for Comic-Con International, in San Diego, California, on July 22, 2025.Mike Blake | Reuters”This is the big question mark that all these companies face,” Creutz added. “You had a linear business that was really profitable and it’s gone away, and is the streaming business ever going to be that profitable?”‘No streamer comes close to Netflix’The leader in the space is uncontested. Netflix was early to the streaming game, scooping up a number of cord cutters with its significantly cheaper online alternative to pricey cable packages. The streaming giant has since grown its library through deals with Hollywood’s studios and by wading into original content. Being among the first to the space meant a massive audience for Netflix. In January, the company announced it had reached 325 million global paid customers. “As we think about global scale, the ability to spread the content spend and other fixed streaming costs over a much larger subscriber base leads to a more meaningful streaming profit opportunity,” Fishman wrote. “On that front, no streamer comes close to Netflix.”In the eyes of Wall Street, Netflix is the gold standard. But competition for viewership is growing and now includes YouTube, TikTok, other social media as well as live events and gaming — all jockeying for consumers’ time.And even the industry leader isn’t immune to the challenges of the streaming business. In 2022 Netflix reported its first quarterly subscriber loss in more than a decade, dragging down its stock price. The media giant responded with a series of changes to its business model, most notably the addition of a cheaper, ad-supported tier. Netflix no longer reports quarterly subscriber counts, and Disney has since followed suit as the industry refocuses on profits. (Disney also stopped breaking down the revenue and operating income for other parts of its entertainment business, including linear TV.) But analysts agree that the comparison of Netflix to traditional media players isn’t exactly apples to apples. After all, Disney, Comcast, Warner Bros. and Paramount aren’t just streamers. These companies still have linear TV businesses as well as robust theatrical divisions. And some have other, even more lucrative pieces of their empires, including merchandising, theme parks, hotels and cruise lines.The Paramount booth is shown on the convention floor during the opening day the of Comic-Con International in San Diego, California, U.S. July 24, 2025. Mike Blake | ReutersIt’s only recently that Netflix has branched out from its content-only strategy to launch its own merchandising and live event businesses. “They don’t have the decline of legacy media to offset,” Alicia Reese, senior vice president of equity research at Wedbush. “They don’t have theatrical to worry about.”The result is traditional media companies that are often sized up against what a nontraditional tech company has been able to build in the streaming arena.How much is too much?Both Netflix and traditional media companies have raised prices for their streaming platforms o …
