When video streaming services offer free trials, there’s a lot of interest. When the trials run out, however, the customers run away. As Christopher Palmeri reported in Bloomberg Businessweek, two-thirds of these users leave when the free trial runs out. Another 10% of all streamers ditch the service every month.

The churn is massive.

That’s good for consumers as the battle for eyeballs keeps prices low and offers enticing. It’s a tough go for the streaming services. There’s already been one casualty. Sony PlayStation Vue is ending its service at the end of January. “Unfortunately, the highly competitive Pay TV industry, with expensive content and network deals, has been slower to change than we expected,” Sony announced via its PlayStation blog.

So is the spending for the streamers. The 10 largest video services are expected to spend more than $100 billion on programming in 2020. That’s… well… a lot of money… much more than can be generated by subscriptions.

Netflix:  $13 Billion Debt Load

At the top of the pile of providers is Netflix. They just floated another $2.2 billion worth of bonds to push their debt load up to $13 billion. Estimates are they are spending more than $15 billion a year for programming. The math doesn’t work in the short-term. Trying to keep its market share and hold off newly launched services, like Disney+, only works if it’s a long-term play.

In a way that only makes sense to accountants, Netflix is profitable “on a noncash basis.”  When you look at its free cash flow, that’s downright scary. Look at this chart from CNBC.

Still, Netflix was the best-performing stock of the decade. It returned more than 4,000% since 2010.

No Streaming Service is Making “Reliable Profits”

“No major subscription provider generates reliable profits from streaming video.” – Shira Ovide in Bloomberg Businesweek.

Hulu, Ovide reports, hopes to turn a profit by 2023. HBO Max is forecast to lose money until 2024. “Disney+, Amazon Prime Video, CBS All-Access, Apply, TV+, and YouTube TV aren’t paying for themselves.”

It will be an expensive ride for these streamers to see who survives. There has to be a limit to how many services people are willing to pay for – especially when shows and titles hop around. The two top programs streamed on Netflix have been The Office and Friends. The Office is moving to NBC Universal and Friends to HBO Max.

How Much Would You Pay for Streaming?

What are you willing to pay for a combination of streaming services?  Consumer surveys by the Hollywood Report/Morning Consult say the average price people want to pay for all their streaming combined is $21. If you’ve already got Netflix, adding almost any other service will put you over the $21 number.