Welcome to the latest edition of State of the Screens.  

Estimated reading time: 3 minutes [691 words]

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Onward,

Michael Beach

Streaming’s New Scoreboard: Scale vs. Profit

In 2025, Netflix did what dominant companies do when they’ve already won the game: it changed the rules.

For a decade, the industry agreed on one metric. Subscribers. It was simple, flattering, and mostly useless. It rewarded growth over discipline, scale over economics. It let every CEO cosplay as a winner as long as the line went up and to the right.

Then Netflix killed the metric.

Not because it stopped winning. Because it was winning on a different axis.

Here’s the uncomfortable truth: subscribers are a vanity metric. Profit is reality.

A million low-value customers are not a business. It’s a cost center with a marketing budget.

So Netflix stopped telling you how many people showed up. It started telling you how much money it made from the people who stayed.

That’s not a reporting change. That’s a power move.

Because when you shift the scoreboard from scale to profit, most of the industry goes from “high growth” to “structurally challenged” overnight.

Let's break it down into four big questions:
1) Who has the most subscribers, and does it still matter?
2) Who's actually making money?
3) How did ad tiers change the game?
4) Can anyone catch Netflix?

Who has the most subscribers, and does it still matter?

Fewer streamers report subscribers now, so we rely on firms like Kagan for estimates.

Bottom line: Subscribers look good. Profit is what matters.

Streaming subscribers (U.S.)(Kagan):
1) Disney - 145.2M
2) Paramount + WarnerBros. Discovery - 91.0M
3) Netflix - 85.3M
4) Peacock - 44.3M

Keep in mind: Disney, Paramount, and Warner Bros. Discovery totals include overlapping subscribers across services.

Fastest growth (YoY):
1) Peacock - ↑ 13%
2) Disney - ↑ 12%
3) Paramount + WarnerBros. Discovery - ↑ 9%
4) Netflix - ↑ 6%

U.S. ad-supported subscribers (Activate):
1) Disney - 55M (30%)
2) Prime Video - 49M (27%)
3) Peacock - 34M (19%)
4) Netflix + HBO Max - 28M (15%)
5) Paramount+ - 15M (8%)

Who's actually making money?

Netflix is in a league of its own

Netflix made $45B in revenue in 2025. It kept $13B as operating profit. That's a 29% margin, the kind of number you see from software companies, not TV networks.

Streaming profits (profit margin)(Owl&Co):
1) Netflix - $13.3B (29%)
2) YouTube - $8.9B (14%)
3) Amazon - $3.6B (8%)
4) Disney - $1.5B (5%)
5) WarnerBros. Discovery - $1.4B (13%)
6) Paramount - $200M (2%)
7) Peacock - -$1.1B (-21%)

How did ad tiers change the game?

The ad market has exploded, but ad-supported customers still aren't more valuable.

SVOD ad revenue (Kagan):
1) 2010 - $9M
2) 2015 - $596M (↑ 6,834%)
3) 2020 - $2.2B (↑ 276%)
4) 2025 - $10.7B (↑ 377%)

Ad share of total revenue:
1) 2010 - 1%
2) 2015 - 9%
3) 2020 - 8%
4) 2025 - 17%

Ad share of total revenue:
1) Peacock - 45%
2) Hulu - 38%
3) Paramount+ - 23%
4) Average - 17%
5) Prime Video - 14%
6) Disney+ - 13%
7) Max - 12%
8) Netflix - 9%

Quick definition: ARPU is the average monthly revenue per subscriber.

Interesting: Even when you look at the growth rate over the past 5 years, the subscription-heavy streamers are far outpacing the ad-heavy group.

I assume that this should be the opposite, and I'll dig into it in future newsletters.

Can anyone catch Netflix?

If we limit the conversation to only the Subscription services, which excludes YouTube, then the answer is no, assuming Netflix does not do anything stupid to harm itself.

Netflix advantages:
1) Most profit
2) Huge global base
3) Lowest churn
4) Can raise prices

This Owl&Co chart highlights the challenge for linear natives: competing with Netflix is tough when linear still drives their economics.

Similar story when you look at time spent.  The five largest linear natives account for 40% of all TV time but only 26% of streaming time.

Flashback: The Music is Slowing

Bottom line

This is what happens in every category. Early innings reward land grab. Late innings reward unit economics.

So can anyone catch Netflix?

No. Not because Netflix is perfect, but because it generates the most cash and has zero exposure to linear.