Is Streaming a Good Business?

For most of the media companies, 20% margins are out of reach— and it’s not just about content costs

Source: vegefox.com, via Adobe

What is a “Good Business?” Let’s Go With At Least 20% OI Margins

Since streaming is slowly replacing linear TV, “good margins” would need to be roughly equivalent to, or better than, traditional TV networks margins.

So, we have an answer: although it’s a low bar relative to the profitability of the traditional TV business, let’s use “at least 20% OI margins at scale.”

Are 20% Margins Achievable? For Most, Probably Not

Now that Netflix’s growth has slowed, it is possible to reliably determine its unit economics

For the media companies, marketing and other opex may run $6–8 monthly before dollar one of content spend

What Now?

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Media and stuff. Write to learn; publish to stress test. Senior Advisor BCG. Former: Turner/WarnerMedia; II-ranked Wall Street analyst.

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Doug Shapiro

Media and stuff. Write to learn; publish to stress test. Senior Advisor BCG. Former: Turner/WarnerMedia; II-ranked Wall Street analyst.