During the 2020 pandemic, streaming services became the new gold rush. As nearly every entertainment company raced to set up their own version of Netflix, millions of dollars were thrown at new movies and shows, along with discounts and marketing gimmicks. How hard could it be to copy Netflix’s business model? After all, some of these companies had 100-year-old vaults of beloved content. Turns out, the streaming wars are more brutal than these companies anticipated. And investors are sending loud signals they’re losing patience.

Warner Bros. Discovery

Stock down 50% since companies merged in April 2022

HBO and the Turner networks were a strange fit with their old parent, AT&T. CEO John Stankey couldn’t be bothered to mention those properties during earnings calls. So he tossed them to his golf buddy David Zaslav, who immediately smothered CNN+ before spending the last year slashing content from HBO Max. Zaslav ran the numbers and felt that direct-to-streaming movies were a waste of money. He’s intent on keeping the Warner Bros.-to-cinema pipeline pure. He also believes the company’s franchises will be its salvation. But a planned live-action Harry Potter TV show will take at least 10 years to unfold, and there’s fair reason to wonder whether “Max” (or whatever they’re calling it then) will still exist in 2033.

Speaking of Max, Zaslav’s big gamble plays out next week as HBO Max absorbs a chunk of discovery+ content and gets a new UI. Investors will surely be looking to see if the service picks up more subscribers after the overhaul.

Belt-tightening rarely leads to streaming success. While no one doubts HBO’s ability to crank out mid-budget hits like “Winning Time” or “Succession,” the streamer has probably topped out on its available audience for that kind of entertainment. It will need DC superhero films and “Game of Thrones”-style epics to grow, but those aren’t cheap to produce.

Zaslav has shown a willingness to lease content to other platforms, which may boost the bottom line, but that’s not a value to his loyal subscribers. If Zaslav is able to bring Max to profitability through cost cuts, advertising, or price hikes, will people still be willing to subscribe to whatever that looks like?

Disney

Stock down 37% since launch of Disney+: Nov 19, 2019

Investors have to be frustrated with Disney. The Bob Chapek era seems to have been a total failure. Bob Iger came out of retirement to reclaim his old job and clean up the mess of his hand-picked successor. Shortly after Disney+ launched, the company suspended its dividend in order to pour more profits into streaming content. Now, Disney+ is following the HBO Max playbook, slashing its library to curb costs.

You’ll also remember that Disney spent $71.3 billion to acquire 21st Century Fox on March 20, 2019. While that move brought in the X-Men, Fantastic Four, The Simpsons, and Avatar, you now have to wonder if Disney overpaid.

While Disney+ will always be a near-must-have streamer for families with young children, the service has a built-in ceiling unless it can figure out how to appeal to adults. The anticipated solution is a merger with Hulu when Disney is forced to buy out Comcast’s 33% share next year, but Disney has been starving Hulu for years. Other than “Only Murders in the Building” and a “Handmaid’s Tale” that has overstayed its welcome, the original slate is weak.

For years, we’ve noted that Disney+ has a major problem if it can't generate a non-Marvel, non-Star Wars hit, and that seems to be the case. An endless series of Muppet projects isn’t clicking. “Willow” was a giant flop. For every “Mandalorian” and “Andor” success, there’s a middling “Obi-Wan Kenobi” or pointless “Book of Boba Fett.”

Though the platform now features a handful of R-rated films, there’s clear worry about harming the Disney name with content that’s too graphic or controversial.

Whenever Disney+ and Hulu do merge, the company should try to poach some disgruntled HBO showrunners to make some mature content. The kids will always be there, but the adults don’t yet have enough reason to join.

Paramount Global

Stock down 66% since Paramount+ launch: March 4, 2021

While Paramount previously offered CBS All Access, Paramount+ was a big leap forward. The new platform harnessed the libraries of BET, CBS, Comedy Central, MTV, Nickelodeon, and Smithsonian Channel, included live NFL, and now offers a bundle with Showtime.

But Paramount fumbled badly by allowing Peacock to snap up the streaming rights to “Yellowstone.” Paramount countered by throwing saddlebags full of money at Taylor Sheridan to spin out “1883” and “1923,” along with “Mayor of Kingstown” and “Tulsa King.” But one man doesn’t make a streaming service. Even the mighty Tom Cruise and his “Top Gun: Maverick” bump were short-lived. Paramount’s franchises are strong, but the company has a lot of linear mouths to feed. That means the streamer ends up looking like a rerun repository. The audience’s appetite is voracious, and one episode of one marquee show per week won’t cut it.

Paramount also has a strange habit of letting its marquee titles bop around to other platforms. You’ll find Transformers and Indiana Jones and “Mission: Impossible” and Star Trek and Godfather films appearing on many other streamers. It may make financial sense, but if you can’t keep your jewels in your crown, you’re not going to look like streaming royalty.

Comcast

Stock down 2% since Peacock launch: July 15, 2020

It helps that Comcast is a giant cable and internet company. Peacock is peanuts on their balance sheet. Still, we’ve been chalking up a lot of wins for Peacock over the last year. It’s becoming a legitimate player in the streaming battle.

It helps that much of Peacock’s improvement comes from clawing back rights to NBCU content that had previously gone elsewhere. The service is also doing a good job appealing to multiple demographics. Fans of WWE and “Days of Our Lives” and the PGA and Premier League may not agree on much, but they all find value in Peacock.

It seems inevitable that Peacock will eventually run into the same headwinds as HBO Max and Disney+, but for now, Comcast’s larger operations appear to shield the stock price from the same fluctuations as the media pure-plays.

Lionsgate

Stock down 60% since December 2016 (STARZ OTT launched in April 2016)

Lionsgate is stuck in a miserable place. Although STARZ has been available as a direct-to-consumer option since April 2016, it can’t find its footing in the streaming fight. It’s a small media company swimming with sharks. The loss of Sony movies to Netflix has harmed the linear channel and the streamer. The library is painfully thin, and there’s no sign of rescue anytime soon. Lionsgate doesn’t have the money to generate a huge wave of content. It’s stuck trying to serve its loyal audience with a handful of shows each year, supplementing its movie library by paying its competitors. This appears to be a company in distress. Help 'em out with a free trial.

Sony

Stock up 55% since Disney+ launch date

Sony isn’t a pure-play entertainment stock, of course. But Sony’s stock is smoking most of its rivals in the media world in part because it sidestepped the streaming battle entirely. The company is serving as an arms dealer. After exiting a relationship with STARZ, Sony movies now get a run on Netflix before jumping to Disney+. Sony fronts the production cost and then pockets the revenue indefinitely.

Sony’s death-grip on the Spider-Man characters is also a major point in its favor.

While it may be cherry-picking to choose the Disney+ launch date as a comparison point here, almost no one could have predicted Sony’s stock would improve 97% more than Disney’s from the launch of such a big-name streamer.

Fox

Stock up 20% since Fox acquired Tubi on April 20, 2020

Fox is another company that sidestepped the SVOD mosh pit by doubling down on its loyal broadcast audiences and soaking up the ad dollars generated by Tubi. The beloved free streaming service continues racking up content and scoring huge audiences.

While Tubi does create some original content, it’s all very low-budget stuff, right at home with the site’s grab-bag of B-movies, forgotten gems, and the occasional blockbuster. There’s always something to stream on Tubi, and the ads are far less frequent than most free streamers.

Yes, Fox does have the subscription-based Fox Nation — (“the site sucks,” according to Tucker Carlson) — but all that content is also very cheap to produce. Seems like the kind of company David Zaslav would like to run.

What About Apple TV+ and Amazon Prime Video?

These giant companies rarely report subscriber numbers. Apple has the largest market cap in the world, so its streaming service is more of a hobby at this point. Prime Video is a free bonus for any Prime member, so it’s also not an easy service to peg down. We assume these video products are just blips on these companies’ radars, but Amazon will need to keep an eye on its sports spending or it could catch flak from its investors as well.

The Unicorn: Netflix

Stock up 23% since Disney+ launch

Stock down 2% since Warner Bros. Discovery merger

Stock down 29% since Paramount+ launch

While Netflix had an unbelievable head start to the streaming wars, the increased competition has taken a toll. The service has had to raise prices and offer a previously scoffed-at ad-supported tier. But when you compare Netflix’s stock to its SVOD competitors, it’s faring much, much better. The stock has been on a steady upward march since June (+108%).

Unlike HBO Max and Disney+, Netflix is not throwing content overboard. Unlike HBO Max and Paramount, Netflix is not selling its content to other platforms. The service is remaining disciplined in not duking it out for sports rights.

Although the company got spooked into chasing some expensive Marvel-style misfires like “Jupiter’s Legacy” and “Cowboy Bebop,” Netflix appears to have regained its footing. The company excels with stories of unusual teenage girls, reality show attention hogs, and quirky stories that hook the imagination.

As it continues to fend off rivals, Netflix is the only profitable streamer today. It’s still making significant cuts. But Netflix could conceivably pull even further ahead just by continuing on its path. The pressure is mounting much faster at Paramount+, Disney+, and HBO Max. If one or more of those streamers collapses, their companies could come crawling back to Netflix for distribution deals. Netflix has shown the ability to create hits by spotlighting previously ignored content, so it could be a win-win scenario.

While subscribers may not care about stock prices, the CEOs of these companies definitely do. It seems inevitable that one or more of these streamers will go belly-up. Corporate boards won’t tolerate endless losses. The kinds of investors who want to scoop up shares of 100-year-old media companies expect a steady return, not a precipitous drop. The price of the stock inevitably impacts how freely the CEO is willing to play with a streamer. Too many streamers are playing it “safe,” but more-of-the-same won’t attract millions of new subscribers.

No matter the CEO’s appetite for volatility, if the subscribers don’t emerge with their cash, you can expect consolidation within the next few years. Not every streamer is making it out of this fight alive.