Disney (DIS 1.09%) has stalled. Netflix (NFLX 1.74%) is petering out. Consumers can choose between watching movies on HBO Max, Paramount+, Peacock, Hulu, Tubi, IMDb, and Amazon.com's (AMZN -0.17%) Prime Video.

There's also Pluto, SlingTV, YouTubeTV, and a host of other niche TV channels too. The joke about cable used to be that you had 500 channels and nothing to watch; now you have 500 streaming services and they all pretty much offer the same selection.

Of course, original content has assumed greater importance -- but with dozens of options to choose from, the market is saturated, and growth may have reached its limit.

TV screen smashed with hammer

Image source: Getty Images.

Everyone signed up for everything

The global pandemic gave movie streaming services a massive boost just as many were being introduced to the market, or reintroduced as studios and providers rebranded existing outlets. Locked down and forced to stay at home, consumers turned to streaming video to idle away the hours.

Launched in November 2019, Disney+ rocketed to over 100 million subscribers in 14 months' time. Netflix added 36 million subscribers in 2020, and 15.8 million of them came in a single quarter at the start of the COVID-19 outbreak. It has almost 208 million subscribers now.

Comcast (CMCSA -0.36%) recently said its Peacock streaming video service hit 42 million subscribers in the first quarter following AT&T's (T 0.17%) announcement that its HBO Max and HBO services crossed the 44 million subscriber threshold. And ViacomCBS (PARA 1.44%) just said its Paramount+ service, which was rebranded from CBS All Access, had just under 36 million subscribers.

Of course, Amazon has over 200 million members in its Prime loyalty program, and they largely have access to its showcase of films and shows on Prime Video.

But the economy is being allowed to reopen again, and people have entertainment options beyond just watching TV and playing video games. While outdoor recreation was already a popular alternative for cabin fever, going to a Disney theme park, dining out at a restaurant, and even going to the movie theater again are all on the table.

Time to tune out

That need to get out is already showing up in the subscriber rolls. Netflix said last month it added less than 4 million new subscribers, more than a third fewer than the 6.25 million analysts had forecast. It also said it expected it would add just 1 million new subscribers in the second quarter.

Disney's earnings last week, while otherwise solid for a company whose business was still operating under tight pandemic restrictions, were overshadowed by the disappointing subscription numbers for Disney+. It ended the quarter with 103.6 million subscribers, or 6 million fewer than the 109.3 million Wall Street was looking for, while also forecasting sharply lower subscriber additions for the next quarter as well.

If the giants of streaming are seeing growth sputter, the also-rans will undoubtedly run into the brick wall of reality too, and their own meteoric expansion will grind to a halt.

The high cost of entertainment

Yet it was bound to happen. One of the main reasons for cutting the cord with cable and satellite providers was to lower the monthly bill, which the streaming services have taken advantage of.

Netflix recently increased the price of its standard and premium plans by $1 and $2, respectively, so they now cost $14 and $18 per month. Disney raised Disney+ subscriptions by $1 to $8 per month. Other services may follow suit.

There was always going to be a limit to how many services a household subscribed to. Two or three seems to be it -- and while being stuck at home might have caused consumers to tack on a few extra services, particularly as there were plenty of one-year free-trial subscriptions being offered, there's a good possibility that a big industry shakeout is about to hit.

The monthly bill for having so many services is quickly approaching what it was to be plugged into the local cable company or dish provider, and that's not going to stand when consumers have other options for keeping themselves occupied. 

Who makes the cut?

As the industry leader, Netflix seems assured of retaining a spot on viewers' must-have lists, as will Amazon, since consumers are getting movies mostly as a free add-on to their online shopping habits. That means everyone else is left to fight for what's left.

As successful as Disney has been, its service really only has one certifiable hit (The Mandalorian), while its movie debuts, while successful, haven't exactly been blockbusters. The other streamers are still question marks.

AT&T (T 0.17%) had to port all of its legacy HBO subscribers into its HBO Max subscriber count to come up with a total, while Viacom was adding all of the content from channels like Nickelodeon, MTV, and Comedy Central to induce Paramount+ signups.

There's a good likelihood a reckoning is coming, and there's a better-than-even chance investors in most of the streaming service stocks aren't going to like what they see.