The streaming industry has heated up in recent years, with a number of new services entering the market and vying for viewers. As a result, consumers now have an almost unlimited amount of choices when deciding what to watch. 

From an investing perspective, this raises a question: What's the best streaming stock to own? 

Two of the more formidable players in the industry, Netflix (NFLX 1.46%) and Walt Disney's (DIS -0.02%) Disney+, each have hundreds of millions of subscribers today. But the former leads the latter when it comes to one key metric. 

Making more money from each customer 

In its most recent period (the third quarter of 2022, ended Sept. 30), Netflix generated average revenue per user (ARPU) of $11.84, which was much higher than the ARPU of $3.91 for Disney+. Even excluding the lower-priced Hotstar service of Disney+, average monthly revenue per paid subscriber was just $5.96 in the business' latest fiscal quarter (the fourth quarter of 2022, ended Oct. 1). 

The low ARPU at Disney is contributing to wide operating losses: $1.5 billion in the latest fiscal quarter in the company's direct-to-consumer (DTC) segment. And this has led to Bob Iger coming back as CEO last month to help reach profitability in the streaming business. The previous CEO, Bob Chapek, said on the fourth-quarter 2022 earnings call that Disney+ will be profitable by fiscal 2024.

To its credit, Disney+ has registered tremendous growth over the past three years. Since launching in November 2019, the service has amassed 164.2 million subscribers. By comparison, Netflix today counts 223.1 million members after first being offered as early as 2007. Therefore, the quick expansion of the Disney+ user base is amazing, and it's a nod to how popular and valuable the company's intellectual property is. 

But its path to profitability seems unclear. The monthly price of a U.S. Disney+ membership just rose from $7.99 to $10.99 for the ad-free version. And this should help drive ARPU higher. It'll also certainly push cancellations up as well, given just how competitive the streaming market is today. 

I question how much pricing power Disney+ really has. According to data from Nielsen, Disney+ only commanded 2% of total TV viewing time in the U.S. in the month of November, whereas Netflix had 7.6%. 

Netflix has consistently increased its monthly membership rate over the years, and up until the start of this year, the business has continued to add new customers at a rapid pace. The benefit Netflix had when it was instituting price hikes was the lack of serious competition. A different competitive landscape today makes me think that it will be difficult for Disney+ to raise prices over time.  

Add this to rising content costs, and profitability for the House of Mouse's DTC unit might prove to be elusive. 

How should investors interpret this? 

It might not seem like a big deal at first to focus so much on a single metric, but I think Netflix's huge ARPU lead provides some key insights. 

The first is that scale really matters in the streaming market. Netflix had a first-mover advantage that allowed it to spend tens of billions of dollars on content while gaining tens of millions of new subscribers year in and year out. And as a result, despite its recent troubles, it has planted itself atop the industry with trailing-12-month net income of over $5 billion. Plus, Netflix plans to be free-cash-flow positive in the current year, with "substantial growth" in 2023, it says. 

Companies that were late to the game, like Walt Disney and its Disney+, will have to burn cash until they reach the tipping point of users that will lead to sustained profitability, if at all.  

Judging by the way things stand now, it looks like Netflix is the better stock to own.