Netflix vs. YouTube: The Post-Streaming Wars Era’s Archrivalry

While “Netflix won the streaming wars” is practically enshrined as Hollywood history at this point, like any historical argument, it has its detractors and counterpoints, too.

If one views the streaming wars as a battle of viewing time, for instance, the true victor would not be Netflix but YouTube, which dominates U.S. streaming time on TVs as well as smartphones, according to Nielsen’s monthly report The Gauge.

But it’s not so easy to simply declare YouTube the actual winner of the streaming wars. As discussed in Variety Intelligence Platform’s new special report, “The Postwar Streaming Market,” the digital video behemoth defies easy classification, and it’s debatable whether it should be placed in the same context as subscription video services such as Netflix.

YouTube’s economic model is of course quite different from the major SVODs, with the vast majority of its content user-generated rather than produced by an industrial content pipeline (though YouTube does shell out billions to its creators via revenue-sharing arrangements).

Indeed, YouTube previously tried its hand at premium, non-UGC scripted content amid the peak TV boom — lest we forget, Netflix’s own “Cobra Kai” began life in 2018 as a “YouTube Red” original — and is unlikely to go down that road again, with its creators happily footing the bills for their own (sometimes professionally produced) content.

And while YouTube does offer a subscription product in YouTube Premium (not to mention its virtual MVPD YouTube TV), its foremost revenue stream has always been advertising, in contrast to the subscription-fueled streaming wars combatants.

It therefore did not make much sense to consider YouTube alongside Netflix, Disney+ and the like at the height of the streaming wars (by which time YouTube’s original series efforts were already receding), which were defined by companies pouring billions into original programming in an effort to attract subscribers.

But as the streaming landscape has shifted, so, too, has the context in which YouTube should be viewed.

The competition for subscribers has cooled as the calculus for success in streaming has grown increasingly complex, with SVODs now judged on factors including ad revenues, subscriber tenure and engagement — the latter being one of the most significant.

As explored in another VIP+ special report, “The Race to Replace TV,” streamers are now seen as part of the same attention economy as gaming and social video, putting them more directly in competition with platforms like TikTok and, yes, YouTube.

But while TikTok and its ilk are still tied to smartphones as their primary viewing platform, YouTube has not just made the leap to big-screen viewing but solidified its dominance over that arena, giving it a unique advantage over other social video platforms.

Meanwhile, despite its flameout on original scripted series, YouTube is still making an effort to secure exclusive content, most notably the NFL Sunday Ticket package (which can be purchased via YouTube TV or as a standalone subscription).

In short, with the subscription streaming wars transitioning into the engagement wars, YouTube is now Netflix’s most formidable opponent — a fact that, judging by its shareholder letters, the Big Red N already knows all too well.

Now dig into the data-filled VIP+ subscriber report ...