Why Wall Street Fell Out of Love With Netflix and Other Media Companies

variety.com:

Netflix to Warner Bros. Discovery scrambling to revise their pitch to shareholders. After spending tens of billions of dollars to ramp up programming for subscription-based streamers, media giants have discovered that the growth potential of the venture may be reaching its end.

Consumers purchase only two, maybe three, of these services, and it’s getting harder for certain subscription companies to convince people to sign up for what they’re streaming.

At the same time, customers are cutting the cable cord at a faster rate and imperiling a once lucrative revenue source for media conglomerates.

Investors have taken note, causing shares of Disney, Netflix, Warner Bros. Discovery and others to get pummeled in a sector-wide sell-off. “These companies can’t keep spending the way they have,” says Hal Vogel, a veteran media analyst. “Streaming may be growing, but it’s not profitable.