Linear TV and cable providers face challenges stemming from consumers' monumental adoption of streaming services with a variety of broadcast packages attached to them. Candle Media Co-Founder and Co-CEO Kevin Mayer has been particularly noted as characterizing TV as being in its "final death throes" with streamers hammering the final nail into the cable box.

Mayer joins Yahoo Finance Senior Reporter Alexandra Canal at the Yahoo Finance Invest conference to discuss the consolidation possibilities for linear TV networks. Currently, Mayer is unsure whether streamers could be as profitable as traditional TV providers.

"These linear businesses have historically been very profitable — profit margins in the 30 to 40 plus percent, which is incredibly high profits — streaming will probably never get to that profitability level," Mayer tells Canal, later highlighting "horizontal integration" between Hollywood studios as more likely a scenario for consolidation as competition tightens between streamers.

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Video Transcript

ALEXANDRA CANAL: So while ESPN definitely committed on the part of Disney, ABC maybe not, Bob Iger has said himself he's looking for strategic options there, but you've said yourself that linear TV is in its final death throes so what does that mean? When you want to sell a network-- it's a-- who wants to buy a dying linear business right now?

KEVIN MAYER: Well, it's like these linear businesses have historically been very profit, margins in the 30 to 40 plus percent which is incredibly high profits. Streaming will probably never get to that profitability level. Netflix, of course, is zooming into profitability, and it has a nice operating leverage meaning a lot of fixed costs so when its revenues exceed its costs, the profit margins can grow quite dramatically with small revenue growth.

So they're in a great position with this operating leverage, and I think a lot of the other streaming services are too but to get to a 40% margin or 35% margin like broadcasting and cable used to get to, not going to happen. But those--

ALEXANDRA CANAL: Netflix said it could.

KEVIN MAYER: Yeah, maybe It could. Reed Hastings, he's the chairman now. Who knows? I don't see it. I see maybe mid 20s to high 20s margins. That's probably what it will top out, I think, because of the competition between these services. But look, it's just hard to say where it's all going to end up and where the pricing can go and--

ALEXANDRA CANAL: So you don't know what type of a buyer. You think it's another media, it's a distributor--