Source: Netflix

Heading into earnings on July 21, some investors holding shares of Netflix (NASDAQ:NFLX) might be wondering what to do with the streaming service. Is now a prime opportunity to buy more of the company's stock, or would The Walt Disney Company (NYSE:DIS), Comcast (NASDAQ:CMCSA), and Twenty-First Century Fox (NASDAQ:FOXA), the owners of Netflix competitor Hulu, be a better long-term play for the Foolish investor?

Mr. Market has high expectations for Netflix
For the quarter, analysts expect Netflix to report revenue of $1.34 billion. If this forecast turns out to be accurate, it will represent a hefty 25% gain compared to the $1.07 billion management reported for the same quarter a year earlier. While a $1 increase in its price to $9 per month for new members will likely impact the company's top line somewhat, the biggest contributor to this increase will probably be an increase in its subscriber base.

  Forecasted Last Year's
Revenue $1.34 billion $1.07 billion
Earnings per Share $1.15 $0.49

Source: Yahoo! Finance

From a profit standpoint, Mr. Market has even higher expectations for Netflix. For the quarter, the company is expected to report earnings per share of $1.15, up a jaw-dropping 135% from the $0.49 management reported during the second quarter of the 2013 fiscal year. In the event that Netflix manages to match or even exceed expectations, higher sales will be a contributor, but the biggest component will likely be higher margins due to increased economies of scale and the positive effects from its $1 price increase.

Is investing in Hulu indirectly a better play?
The past five years have been very big for Netflix. Between 2009 and 2013, the company's streaming and DVD rental operation saw revenue shoot up 162% from $1.67 billion to $4.37 billion. Based on its most recent annual report, this rise in sales appears to have been driven largely by its soaring subscriber count. In just the past three years alone, the company's streaming user count skyrocketed 88% from 23.5 million to 44.4 million.

NFLX Revenue (Annual) Chart

NFLX Revenue (Annual) data by YCharts

An alternative to buying Netflix is to grab hold of Hulu by investing in Disney, Comcast, or Twenty-First Century Fox. Currently, each of these companies owns a piece of the business, with Disney and Twenty-First Century Fox owning an aggregate 66% stake. Unlike its peers, Comcast's ownership is a bit more complicated. Comcast, which owns its stake in Hulu through its NBCUniversal operations, relinquished its voting power and seat on the company's board.

Hulu is currently far smaller than Netflix with a modest 6 million subscribers, but the past few years have been truly explosive for the streaming service. Between 2009 and 2013, the company's revenue soared 900% from $100 million to approximately $1 billion. This growth stemmed primarily from its increase in subscribers from 0 as recently as 2010 to over 5 million by the end of the business's 2013 fiscal year.

Source: Hulu

While it's clear that Hulu's growth in recent years has been better than Netflix's, it's unclear which business is better on the bottom line. During its most recent five-year period, Netflix's revenue declined 3% from $115.9 million in 2009 to $112.4 million by the end of the company's 2013 fiscal year.

Despite benefiting from higher sales, the company's bottom line was negatively affected by higher costs, mostly in the form of increased content expenditures. Unfortunately, Hulu doesn't provide detailed financial statements, but given the fact that Disney's increase in income from equity investees was partially offset by losses in Hulu that stemmed from rising programming and marketing costs, it seems the business is in roughly the same boat as Netflix.

Foolish takeaway
Based on the data provided, Netflix has seen a pretty impressive run in terms of revenue over the past few years. The company's inability to grow profits might be something of a turnoff, though. Similarly, Hulu has also seen impressive upside at a time when profits seem depressed. For this reason, it's difficult to tell which opportunity makes more sense.

Netflix is likely a better play for investors who believe in the company's larger market presence and who prefer a pure play on movie streaming. Investing in Disney, Comcast, or Twenty-First Century Fox allows investors to protect themselves should Hulu die out while still getting some nice upside if the business continues to grow rapidly.