Media giants are facing challenges on all sides, according to recent filings. TV networks like Fox (FOX, FOXA) and Comcast (CMCSA) are struggling as linear ad revenue enters a "free fall." Streaming also remains unprofitable for the majority of players, including Paramount (PARA), Disney (DIS), and Apple (AAPL), as costs rise and subscriber growth stalls.

Yahoo Finance Senior Reporter Alexandra Canal joins the Live show to discuss media players' dilemma.

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Editor's note: This article was written by Nicholas Jacobino

Video Transcript

AKIKO FUJITA: Well, recent earnings results from media giants like Disney and Paramount Global show that the industry is at a crossroads. Network revenues are flatlining, as streaming growth stalls.

Let's bring in "Yahoo Finance's" Allie Canal to discuss more. Allie, it feels like this has been an ongoing conversation. The question is, what is the path forward?

ALEXANDRA CANAL: Yeah. That's a big question, Akiko. Because for the longest time, linear networks, really, supported the streaming business. Linear was the driving engine for a lot of these growth initiatives. But as we've seen cord cutting escalate as advertisers flee linear in favor of streaming and other digital options, we've really seen a sizable drop in that segment. And TV ads, in particular, has been a big drag on revenue.

You're seeing that on your screen now. Paramount Global reporting linear ad revenue declines of 15% year-over-year in the fourth quarter. Warner Brothers Discovery, a 14% drop. Disney, Comcast, Fox, also, all seeing significant dips in the latest quarter.

Now, you may be thinking, OK, well, linear isn't doing so well. But streaming must be. So, overall, a good thing. The issue with that thinking, though, is that margins and cash flow generated by streaming businesses are going to be lower in comparison due to greater required spending, when you think about investments.

There's greater marketing costs, subscriber acquisition costs. So when you compare that to where linear was, it's a significant downgrade. So that's one issue.

Another is the fact that we're seeing streaming growth really stalling across the board. There's a new report out from analytics platform Antenna, which said that churn or subscribers canceling their streaming plans has nearly tripled since 2019 with 104.5 million cancellations in 2023. That is the largest drop in subscribers over the last five years.

So in the midst of this subscriber slowdown, investors, they still want to see that profitability. There's still this increased pressure to turn profits. And that's why we've seen these companies across the board enact mass layoffs, bundle their offerings.

We've seen joint ventures and skinny bundles. But all that really hasn't been enough. Because across the board, we're still not profitable on the streaming side for most of these companies. The exception, of course, being Netflix. And very recently, Warner Brothers Discovery. But Warner Brothers Discovery results were interesting, because despite its streaming turnaround, it still missed on both the top and bottom lines.

Revenue dragged down again by the linear segment. So those results really illustrating this balancing act that all of these streaming and media companies are facing.

So this is something that we're going to continue to monitor. But after we got these latest results, it's certainly an issue that stood out to me.