Second act

The media and entertainment industry prides itself on its mastery of classical storytelling's three acts: the setup, the conflict and the resolution.

Given the extreme pullback on Roblox shares, Greenfield noted Disney CEO Bob Chapek has an opportunity to make a transformative deal that could alter the way investors view his company. But if streaming continues to take over as the dominant form of viewership, it's possible regulators will eventually soften to the idea that broadcast network ownership is anachronistic. Netflix also shocked the media world by announcing it plans to launch an advertising-supported service after years of refusing to consider commercials. But it remains to be seen if Netflix can compete with legacy media's established content engines and intellectual property when the market isn't rewarding ever-ballooning budgets. "The reason to stay invested is you don't know when act three will begin." While Zaslav has preliminarily outlined a streaming strategy of putting HBO Max together with Discovery+, and then potentially adding CNN news and Turner sports on top of that, he's now faced with a market that doesn't appear to support streaming growth at all costs. Disney reported an operating loss of $887 million related to its streaming services this past quarter — widening on a loss of $290 million a year ago. Traditional TV also lacks the flexibility of streaming, which many viewers have come to prefer. "We're going to spend more on content — but you're not going to see us come in and go, 'All right, we're going to spend $5 billion more,'" said Warner Bros. Discovery CEO David Zaslav during an investor call in February, after Netflix had begun its slide but before it nose-dived. "The pandemic created a boom, with all these new subscribers efficiently stuck at home, and now a bust," said Michael Nathanson, a MoffettNathanson media analyst. But shares are down more than 20% since the company's stock began trading in April following the merger of WarnerMedia and Discovery. Last month, the central conflict of the streaming wars came into focus.