Here’s one for the books. Netflix is now the most highly valued media company in the world, overtaking Walt Disney Inc. This does not in itself mean much; market valuation is a fickle beast that doesn’t always say much about a firm’s fundamentals. But it’s precisely that divorce between valuation and fundamentals that makes the case of Netflix—and Spotify, which went public earlier this year—interesting.

In a relatively short span of years, both companies have upended the media world with the streaming model. The dynamics within their particular industries are different—Spotify has often had an antagonistic relationship with artists and record labels while Netflix has had less strife—but the companies have one thing in common: they are losing money hand over fist. Netflix, for instance, is projected to have a negative free cash flow of $3-4 billion this year.

The streaming model might have changed the way popular entertainment works today—but there is no sign on the horizon of how that model can turn a profit. How long will the exuberance of hope be enough to propel it?

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