A few weeks ago, yours truly here opined that Netflix, Inc. (NASDAQ:NFLX) was, sooner or later, going to run into a painful wall of competition, at which point years of heavy, excessive content spending (and the subsequent debt it created) would come back to haunt the company, and by extension shake owners of NFLX stock. I didn’t know who or how or when, but nothing breeds competition like a little success.

As it turns out, Walt Disney Co (NYSE:DIS) and Twenty-First Century Fox Inc (NASDAQ:FOX) may be the current best bets to do the aforementioned deed. Whispers that the former was looking to buy at least some significant parts of the latter surfaced this week, with the ultimate goal being to stop Netflix in its tracks before it was allowed to develop any more momentum.

Yes, it should worry current and would-be owners of NFLX stock, even if this particular rumored deal doesn’t materialize.

Take the (Bigger) Hint

First and foremost, take the suggestion with a grain of salt. Neither company has confirmed (nor denied) the prospect, and even CNBC pundit/host David Faber’s sources acknowledged there was no actual impending deal.

All the same, the premise is credible simply because, when all is said and done, it’s a good idea. Needham analyst Laura Martin commented the potential pairing would be a “dream come true. Putting these assets under Disney’s hands will make them a lot more money. At the end of the day, Fox will get more money than it could have by it operating those businesses and Disney will make more at the outset,” adding that Disney’s content library is of the highest quality, but not terribly big. At the same time, Fox’s library is deep and wide, even if not Disney caliber.

Martin went as far as to describe the rumored union as a “Netflix killer,” surmising the two organizations could easily figure out how to clear the technical hurdles of developing an on-demand video platform.

Toby Chapman, an associate partner at global strategy consultant OC&C, agreed, saying “It’s a sign of Disney wanting to develop scale in order to compete with Netflix. On its own, it’s difficult for even a company like Disney to compete with breadth of content that Netflix has. You’ve got to have something really broad or something with really specific strengths.”

NFLX Now Has Rivals

Not everyone agrees. Cowen’s Doug Creutz posited that investors who are bullish on Disney like it for the non-TV assets. “So why would Disney want to increase its exposure to TV? Disney already has plenty of scale, so adding scale isn’t that helpful… In a world where content is getting more valuable, but networks are being devalued, this seems like it would be suicide,” he said.

Creutz’s point is well taken, but it’s not necessarily a Disney-Fox deal specifically that should haunt loyal owners of NFLX stock. It’s that conversations like this one — just with different players — are being re-circulated at a faster and faster pace. Sooner or later, enough of that spaghetti will stick to the wall.

Remember, when Netflix’s streaming service was first launched, it had few viable peers or competitors. Growth was easy to muster, as the entertainment industry wasn’t sure internet-based streaming television was the future. They didn’t bother to invest in it.

Much has changed in the meantime now that Netflix has proven the idea. Rivals like Hulu have surfaced, while streaming set-top boxes like the Roku have made it easy for consumers to tap into a huge library of over-the-top television services other than Netflix. Increasingly, TV watchers have a la carte options, while platforms like Vue, from Sony Corp (ADR) (NYSE:SNE), have successfully melded on-demand content libraries with access to viewers’ local network broadcasts.

Point being, while the future of streaming video is still a fuzzy one, it’s becoming clear that most (if not all) of the industry’s guns are taking aim at Netflix, even if that includes pairings of strange bedfellows. If not Disney and Fox, it’s going to be a similar coupling.

Netflix can’t remain an island forever.

Bottom Line for NFLX Stock

While it’s a reason for shareholders to worry, it’s hardly the only reason for concern. Certainly, the prospect of new competition coming to the on-demand market isn’t exactly new.

NFLX stock has proven to be made of teflon in that regard, shrugging off concerns that it’s spending more than it should, racking up debt that requires future growth that may not be in the (House of…) cards.

From that perspective, the fact that the chatter of a Disney-Fox deal has surfaced at all should worry NFLX stock holders, as its frothy, near 200x valuation is founded on the idea that it would dominate the streaming landscape forever. That’s just not going to be the case.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter.