YouTube vs. Netflix: Who Will Win?

With a record 278 million paying subscribers worldwide (at last count) tuning into its vast library of sometimes questionable movies and TV shows that are now hits, Netflix has moved even further ahead of its competitors.

Big companies like Disney+, Prime Video, and Apple TV+ are often outperformed by the company that started sending DVDs through the mail in the late 1990s, and that’s in a variety of metrics — subscriber numbers, revenue per subscriber, awards.

But there is one video service that beats Netflix in several of the most important ways. According to monthly Nielsen data published by Variety, Americans stream more content from YouTube on their TVs than from any other service, including Netflix.

YouTube and Netflix Watch Time Chart: Sherwood

Over the past six months, a quarter of all time spent watching U.S. TV has been spent on YouTube, compared to about 20% on Netflix. While Netflix lags behind YouTube in terms of viewing, the two are barely in competition — Prime Video was third in streaming in July, but only captured 8%.

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People spend hours watching YouTube, but they don’t pay for it, so it’s a completely different business than Netflix’s pay-per-view model. And that’s true. But that doesn’t make the former any less profitable than the latter, on the surface.

YouTube and Netflix Revenue Chart: Sherwood

It’s worth noting that the two services are nearly equal in the amount of revenue they generate each year: Netflix’s $33.7 billion is just 7% more than what YouTube’s advertising brought in last year.

And, of course, YouTube doesn’t have to pay a dime to pre-order, produce, or license its content. Its users simply upload videos for free (and then share the ad revenue if they qualify). On top of that, YouTube’s paid offerings are a significant revenue source, topping $100 million in February.

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Cover photo: Unsplash