Content streaming (or direct to consumer as the industry has taken to calling it) by outward appearances appears to be nothing more than a mad dash to scoop up whatever part of the market Netflix doesn’t dominate. Though that may be partially the case, the real driving mechanism for the plunge into streaming lies in the decline of the legacy television platforms.

Television and other legacy platforms still afford the entertainment giants a significant revenue generation. Each year the amount of that revenue generation declines; at the same time, revenue generation for streaming continues to uptick. Leading many executives to the conclusion streaming is the medium that is displacing Television.

Companies realize the future is streaming, but their methods are to attempt to be a full satellite package rather than hosting successful channels. The economics of the models are not going to conclude well for any of the companies as the cost of content generation will always outpace consumer income. Unless they adopt the Hulu model, which essentially copies the cable television model of buying channel blocks, none of them are going to see a very vibrant future ahead of them.

Failing to question the economic viability of copying Netflix, Bob Iger positioned Disney for the future with the introduction of Disney Plus last year. Despite scarce content, Iger continued to boast 50 million subscribers’ adoption rate, projecting the image of success on the project.

Now the numbers are in, as is the answer to everyone’s most important question: how many people are paying subscribers and how many are free users?

During their latest conference call, Christine M. McCarthy Disney’s Senior Executive Vice President and Chief Financial Officer delivered the actual performance metrics, as transcribed by The Motley Fool.

“As we announced on April 8, during the third quarter, we exceeded 15 million Disney+ paid subscribers. …… As of May 4th, we estimate we had approximately 54.5 million Disney+ subscribers reflecting a subscriber mix generally similar to our mix at April 8.” Christine McCarthy

“Disney+ launched in a number of European markets during the quarter, which contributed to a total paid subscriber base of $33.5 million at the end of the quarter.” Christine McCarthy

Of the 54.5million subscribers, only 15 million are actively paying for Disney Plus. Meaning 39.5 million are not. If that doesn’t sound profitable to you, that would be because it isn’t. It’s costing the company billions per quarter.

“Results at our direct to consumer businesses had an adverse impact on the year-over-year change in segment operating income of about $500 million which came in a little better than the guidance we provided last quarter. We expect our Direct-to-Consumer & International segment to generate about $1.1 billion in operating losses for the third quarter….” -Christine McCarthy

Despite the company now effectively operating off debt, that they would continue the development of shows that further dilute the value of the Star Wars brand while censoring shows on Disney Plus is flat out insane. No one is going to want to adopt a platform that continues to struggle to deliver content, and even when it does with the quality of the content. How long Disney plans to keep pumping billions per quarter into this operation is a mystery, but investors are unlikely to tolerate net losses and poor growth for long.