How YouTube and Netflix Copied Each Other’s Homework

Less than a decade ago, the notion that YouTube and Netflix, two streaming hubs with very different business models, could be considered rivals probably would have sounded ridiculous.

But as the VIP+ August special report, “The Postwar Streaming Market,” explored, the skirmish among SVOD platforms is evolving in a way that blurs the boundaries of who is or isn’t a competitor as advertising tiers change the complexion of that product category.

And as VIP+ covered in the previous month’s special report, “The Race to Replace TV,” the biggest threat to subscription streaming services may not be their direct competitors, it’s shaping up to be the social media sites grabbing mindshare with their own, very different approach to video.

Thus, we have YouTube and Netflix in fierce competition — and apparently ripping pages from each other’s playbooks.

Earlier this month, Nielsen reported that YouTube became the most watched media company on American TVs in July. YouTube is not only the first streaming company to surpass 10% viewership, but it’s the first to dethrone the Walt Disney Co. since Nielsen launched its Media Distributor Gauge in November 2023.

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Now more than ever, YouTube seems to be embracing its small-screen dominance. As part of its recent Made on YouTube event, the company unveiled some major updates to its TV app, including the ability for creators to organize their videos into episodes and seasons and select trailer-esque “immersive previews” that will play when TV users check out their page.

In other words, YouTube is transforming its TV platform from a mostly identical port of its website into a polished platform that bears closer resemblance to Netflix — which should make Netflix a little nervous.

As a recent VIP+ guest column explored, traditional entertainment generally isn’t social media-centric enough. Yet as another VIP+ analysis explored in September, social video is learning from traditional media’s tricks by programming scripted content in short-form.

There is precedent for YouTube entering a new market, applying what works for its competitors to its own version and giving said competitors genuine heat. That very scenario happened to Twitch when YouTube started supporting livestreaming and then to TikTok when YouTube Shorts launched.

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Netflix is right to take YouTube’s challenges seriously. Exclusive MIDG data, as reported in the “SVOD vs. Social Video” report, found that while the top streaming platforms still gain more viewership than social video platforms overall, that gap gets narrower with every passing year and younger generation.

As of this year, Gen Alpha users watch more social videos than SVOD content by a hair. Precise TV zoomed in further on Gen Alpha consumer habits and found 81% of U.S. Gen Alpha kids surveyed in 2024 regularly watch YouTube, compared with 62% who watch SVOD.

Whether it’s in response to changing consumer preferences or an act of psychological warfare, Netflix is now looking to diversify its portfolio using YouTube’s hit content. We also learned last month that the streaming giant hoping to create live episodes of the popular YouTube interview show “Hot Ones” exclusively for Netflix.

If finalized, Netflix could kill two birds with one stone: Capitalize on a YouTube show so popular it has become a destination for celebs to promote films (regular “Hot Ones” episodes would presumably continue to post to YouTube) and further diversify its content with more exclusive live TV offerings.

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Assuming the live audience is the only thing Netflix would add, they have a road-tested concept that’s cheap to produce, loved by talk show-averse Gen Z viewers and could go on for however long host Sean Evans can tolerate Da Bomb. Getting a slot on Netflix could bring the show even closer to “household name” status, free of the amateurish stigma YouTube has only recently begun to shake off.

But perhaps most crucially, Netflix chatting with “Hot Ones” exposes how YouTube’s key advantage could also be its Achilles’ heel: It doesn’t own any of its content. YouTube’s top brass can tout shows like “Hot Ones” as “real TV” all they want, but that also means streamers like Netflix can say, “You’re right,” and offer the creators a deal they can’t refuse.