The Streaming Wars for Film and TV

Why so many companies launched video streaming services, why most struggled to make a profit, and how the market is now consolidating.

For a few years, it seemed as though every large media company launched its own video streaming service. This rush, often called the streaming wars, reshaped how films and series are made, sold and watched. It also offers a clear lesson in the economics of industries with high fixed costs and customers who can leave with a single click.

The appeal of streaming

Streaming has a powerful cost structure. Making a series is extremely expensive, but once it exists, showing it to one more subscriber costs very little. That means the more subscribers a service has, the lower its content cost per subscriber. Scale is everything, which is why companies raced to grow as fast as possible, often losing money for years in the hope of becoming one of the few big winners.

Owning a service also gave studios a direct relationship with viewers and valuable data about what people watch.

Why profits were hard

Several forces made the business tougher than expected.

Content costs soared, because every service was bidding for the same writers, stars and popular shows.
Studios pulled their films and series back from rivals to fill their own services, shrinking each content library available to competitors.
Churn - the rate at which subscribers cancel - was high. Many viewers subscribe to watch one hit series, then cancel and move to another service.

Keeping churn low is crucial, because winning a new subscriber through advertising and promotions is costly.

The cost of churn

Imagine a service charges 200 rupees a month and spends 600 rupees in promotions to win each new subscriber. If a subscriber stays for 12 months, they bring in 2 thousand 400 rupees, easily covering the cost. But if they cancel after 2 months, they bring in only 400 rupees - less than it cost to attract them. That is why services invest in keeping people subscribed, not just signing them up.

How services responded

To improve profits, services changed strategy. Many introduced cheaper plans with advertisements, creating a second source of revenue. Some cracked down on password sharing across different households; Netflix did this widely in 2023. Prices rose, and services became pickier about what they produced. Some began licensing their shows to rivals again, because selling content can be more profitable than keeping it exclusive.

The market has also seen consolidation - companies merging or combining services to share costs and build bigger libraries. In India, JioCinema and Disney+ Hotstar were combined into a single service, JioHotstar, in 2025, bringing together major cricket rights and large film libraries. Bundles, which package several services together, have returned too - echoing the old cable television model that streaming once promised to replace.

What it means for viewers

Viewers gained huge choice and many high-quality shows. But fragmentation means that watching everything can require several subscriptions, and prices have risen. Many households now rotate services, subscribing to one for a few months at a time.

Equating subscriber numbers with success

A service can grow quickly by spending heavily on content and discounts while losing money on every subscriber. What matters in the long run is whether each subscriber brings in more than it costs to attract, serve and keep them.

Key takeaways

Streaming has high fixed content costs but low costs per extra viewer, so scale matters.
Rising content costs, shrinking libraries and high churn made profits hard.
Services responded with ad-supported plans, password-sharing limits and price rises.
Consolidation and bundling are reshaping the market.