As the major snowstorm battered the US east coast, millions turned once more to Netflix, huddled under blankets and streaming reruns of The X-Files or catching up on Jessica Jones. It’s the season of Netflix and chill.

A mere eight years old in its current form, Netflix’s streaming service has not only proved a huge hit with consumers, it has stood the world of TV economics on its head. Audience figures? Phooey. Profits? Who cares. Netflix added 5.59 million subscribers in the final quarter of 2015, it announced last week. Kim Kardashian signed up just so she could watch Making a Murderer. The company announced plans to make itself available “from Singapore to St Petersburg” at the Consumer Electronics Show this month.

As its US growth stalls – the company added only 1.9 million users last quarter, as opposed to 2.3 million in the same quarter of 2014 – analysts and rivals are asking how long its rise can continue. Some of this is fed by jealousy. But some comes from a fear that Netflix’s success has forced an entire industry to subscribe to an unsustainable model.

“They don’t have to be profitable,” sighs one senior executive at a major cable network. “They’re in that glorious stage where you spend $5bn on content and you don’t have to care what your profits are. I’ve fantasised about having a job like that my whole career.”

Netflix has started a bidding war for new content. It broke the mould by ordering series in two-season chunks – as opposed to the far more conservative, and less costly, first-a-pilot-then-we’ll-see strategy that dominated television for decades.

Facebook Twitter Pinterest Netflix has started a bidding war for new content. Photograph: DPA/Corbis

Netflix’s prestige series are all two-season wonders: Jessica Jones, The Unbreakable Kimmy Schmidt, even globetrotting period drama Marco Polo, which was critically disliked and quickly forgotten (and cost $90m to build, among other things, 6,000 custom-made historically accurate 13th-century costumes) are booked for two seasons’ worth of viewing.

Sources say Hulu, the biggest competitor to Netflix’s pioneering business model, had to order two seasons of the forthcoming Hugh Laurie drama Chance to keep it from being sold elsewhere. And production budgets have risen: Netflix’s first big hit, House of Cards, cost a reported $100m for its initial order of two seasons. Across TV, direct-to-series orders are coming thick and fast as prices balloon – there are, after all, more places than ever to sell your script.

It’s not just Netflix’s rivals paying a high price for this shift. Netflix’s liabilities approached $8bn at the end of 2015, with $4.8bn of that devoted to payouts to competitors like CBS, NBC and Fox for the rights to re-air their programs – content the company understandably doesn’t much talk about.

Then there’s the vital international market in which the company is losing $120m in order to expand, according to its chief financial officer, David Wells. Last week he said the company could seek to add even more debt early next year; Netflix, said Wells, was “on pace to burn about a billion dollars of cash” on its own series alone.

Meanwhile, traditional TV networks face a dilemma: cut back on sales to a company that pays handsomely for shows because that company’s business model exposes the flaws in your own, or shut up and take the money?

CBS and Fox have been vocal about selling less material to the streaming service, but there’s no way for those companies to know what’s popular, because Netflix won’t tell them.

Rich Greenfield, an analyst with BTIG, says the popularity of the business model is keeping it afloat and forcing its competitors to feed it. “All I know is that people are watching well over two hours a day [of Netflix],” he says. “It’s a prisoner’s dilemma; content producers are still selling them content. If you make content, your job is to monetise that content.”

That delicate balance has stayed steady since Netflix first began unlimited streaming in 2008, and since then the company’s share price has gone up so far, so fast, that it seemed unstoppable. But its costs are increasing faster than its revenue.

“We do our best to ignore the volatility in our stock,” wrote Reed Hastings in a letter to investors in October 2013, in which he gently reminded them that market value and the health of the business were two separate things. “Some of the euphoria today feels like 2003 [when Netflix stock first spiked].”

Part of Hastings’ caution must have been due to recent events: Netflix stock spent the second half of 2011 falling and most of 2012 in a trough, but by the time he wrote his investor’s note, the stock was $46, up from a low the previous year of $7.83. Today the share price is over $100, and RBC predicts it will go up to $128 this year.

Facebook Twitter Pinterest Netflix’s first big hit, House of Cards, cost a reported $100m for its initial order of two seasons. Photograph: Netflix

“I think Netflix is a momentum stock; people get nervous around quarters but the fundamental shift to internet TV hasn’t stopped,” Greenfield says.

The question is, can Netflix make, or buy, hit shows fast enough to avoid crashing? Subscriber revenue may continue to increase, as will subscription prices. Many US subscribers face hikes in 2016; that may be a useful litmus test in determining exactly how much the company can charge.

And those rises come as competition is increasing. Amazon, HBO, Hulu and fledgling offerings from CBS and Showtime are gaining market share.All of those services produce their own content, and many are owned by the companies Netflix relies on for its bread and butter.

Hulu in particular, long a hive of bickering and infighting between stakeholders Disney, Fox, and NBC, has finally found its feet under new CEO Mike Hopkins. Hopkins, who used to negotiate tense distribution agreements for Fox, made peace between the owners, pulled back on Hulu’s unappetizing experiments with branded half-hour-long comedies – the only thing, for a while, its stakeholders could agree on – and began spending in earnest on big-ticket items like a JJ Abrams adaptation of Stephen King’s bestseller 11/22/63.

If 11/22/63 succeeds, credit will be partially due its main competitor: Hastings, programming head Ted Sarandos and others at Netflix made prestige television not merely appealing but vital for the internet age. Decades of rising cable subscriptions gave traditional networks the time and budgets to develop modern hits such as Battlestar Galactica, Breaking Bad and Archer, but also helped drive people into the arms of Netflix.

Now those same companies are using their under-threat business models to adapt to the new paradigm. Netflix will have to work hard to stay ahead of the forces it unleashed.