The Video Streaming Numbers Game Is Shifting

This creates a bit of a conundrum for the operators of streaming platforms. Compelling new content is vital to keeping subscribers—and landing new ones—in a market where viewers can now sign up and cancel services with a mouse click.

But many of those same operators are under pressure from Wall Street to stanch the losses and cash burn from their streaming platforms. And even the profitable ones, such as market leader

Netflix,

NFLX -1.50%

no longer have a blank check from investors to splash out on content spending in pursuit of more subscribers. Netflix has told its investors that it plans to keep its content spending relatively flat this year compared with last year even as its free cash flow nearly doubles to at least $3 billion. 

Rivals are sounding similar notes. At a

Morgan Stanley

conference last month,

Disney

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Chief Executive Officer

Robert Iger

spoke of the need to “better rationalize our costs” for the streaming business.

Warner Bros. Discovery

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CEO

David Zaslav

told analysts during the company’s last earnings call in February that 60% of the content on the company’s HBO Max service was hardly being viewed, adding that “we need to monetize that in order to drive shareholder value.”

Streaming subscribers should thus prepare for a new reality—one in which new content isn’t simply fire-hosed onto platforms for artificially low prices. Movies in particular will see a big shift as established media players push more releases into a recovering theatrical industry while some have also…