There is no stopping YouTube with its persistent year-on-year improvement with new users. YouTube advertising revenues stood at a whopping $7.34 billion in Q2 2022.
Netflix generated revenues close to $30 billion in 2021. But the two streaming giants are not in the same boat. Big-budget movies are not hosted on YouTube – that’s where Netflix comes in. However, user-generated content is the wheelhouse of YouTube. Let’s dig deeper.
Mainstream TV shows are usually accessible on Netflix. But if you want your daily fix of DIY videos, you must use YouTube.
Are you hoping to catch up to the latest season of Better Call Saul? Then you better watch Netflix!
But if you want expert commentary on the show’s nuances, YouTube is your go-to choice. YouTube itself does not host full episodes of TV shows like Better Call Saul.
That would be illegal, and YouTube could get in trouble. However, YouTube hosts mini clips from TV shows that serve as teaser trailers.
Many businesses use the attention generated from these clips to redirect their users to Netflix. This allows them to keep the wheels of revenue churning.
Movie producers are more likely to upload behind-the-scenes footage on YouTube. Streaming an entire movie or TV show is done on Netflix.
A major disadvantage of using Netflix is that it doesn’t stream all your favorite shows. If you want to watch “The Sopranos,” you will need an HBO subscription.
Some TV shows and movies only stay on Netflix for a temporary time. The best thing about using Netflix is that you never know what you might discover.
It has become the go-to place for indie filmmakers whose works wouldn’t see the light of day.
As of Q3 2021, Netflix has 214 million paid members worldwide. However, the streaming giant faces a major problem: a shrinking user base.
Netflix made a painful decision to limit password sharing. This restricts the number of people that can use a single account. The decision did not resonate well with members, many of whom pulled out to find alternatives.
YouTube, by comparison, has over 2.6 billion monthly active users. This is a whopping 1/4th of the planet’s population.
Anyone who uses the internet is likely to have a YouTube account. Netflix does not come close to these numbers. Granted, the overwhelming majority of these users don’t pay anything.
YouTube changed how we viewed content. It is blamed for the downfall of cable TV because people saw the potential in streaming platforms.
The basic idea behind YouTube was to allow the average user to upload videos. YouTube’s motto was unheard of at that time: broadcast yourself.
Slowly but surely, the number of viewers grew, and profits began to trickle in. YouTube grew on the backs of user-generated content and soon pivoted to an ad-based model.
Popular YouTubers from 2008 ushered in a new era of entertainment. The most iconic content producers from 2008 include NigaHiga, Fred, and Michael Buckley.
At the time, these producers did not expect to generate a profit. Today, many of them command monthly incomes exceeding six figures.
YouTube was a successful thought experiment that showed how brands could generate exposure by leveraging micro-influencers.
This business model sent ripples across the internet. Social media networks like Facebook and Twitter replicated the same principles very successfully.
But YouTube could never legally host paid entertainment without facing a barrage of lawsuits.
Netflix took a different approach to online streaming. Instead of user-generated content, they would show paid entertainment.
For a small fee, you could effectively substitute cable TV. Netflix filled the void that YouTube, at the time, could not. And this may be seen as the final nail in the coffin of cable TV.
Both YouTube and Netflix are trying to achieve two completely different objectives. The former is catered to user-generated content. The latter is about paid entertainment.
Both dominate their respective niches. Netflix even has its own YouTube channel and uploads teaser trailers of media they currently host.
Many of today’s most successful streamers, such as Pewdiepie or Mr. Beast, wouldn’t be possible without YouTube.
Some YouTubers have successfully pivoted to mainstream platforms. Examples include Lilly Singh and Hannah Hart.
Check out, YouTube vs. TikTok
Think of YouTube as one giant advertising billboard that anyone worldwide can see. YouTube allows you to watch free content from your favorite content producers.
In exchange, you have to sit through a few short ad clips. And after reading this blog, you might see an ad or two from Netflix on YouTube.
YouTube can sometimes be relentless with ad clips. Often showing 2, 3, or even 4 ads in a single video. The number of ads you will have to see depends on the duration of the video.
Some of these ads can be skipped. Others… not so much. This can be a problem because some ads are up to 30 seconds long.
This is an eternity for the modern user base with dwindling attention spans. You can, however, get around this by using ad block plugins.
This is usually more convenient on desktop PCs compared to mobile phones. This is because no alternative apps come close to YouTube’s official app.
And the cost of using YouTube’s app is the inability to skip ads. Some people are willing to put up with the inconvenience of using an inferior app to skip ads.
A common alternative on mobile phones, especially android, is Brave browser. The browser comes with a built-in ad blocker that blocks all ads on YouTube.
It is inconvenient to use and does not offer the same functionality as the YouTube app. But at least you get to skip ads. This is particularly useful if you want to stream uninterrupted music.
Whether studying or cooking, a single ad can be a death sentence for your concentration. Ad blockers let you circumvent this problem.
But if you want to use YouTube without ads – the official way, use YouTube Premium. This service costs $12 per month and may be worth subscribing to.
At the time of writing, Netflix does not offer any advertisements. It does provide you with recommendations and suggestions based on your viewing history.
However, that is soon going to change in the future. Netflix is rolling out plans for ads to the lower-priced subscription tier.
The streaming giant is already in consultation with agencies such as Google and NBCUniversal. Netflix has had a tough year because it lost many users.
Moreover, competition with other entertainment services is growing more intense. Netflix also had to let go of over 150 employees.
They are still left with a big chunk of customers that they can tap into. Netflix will introduce an ad tier at the end of this year. Some reports indicate they may introduce an ad tier earlier.
Nothing is set in stone as of now. But once Netflix introduces ads, we expect the streaming experience to be disrupted. Netflix hopes to generate more revenue by showing ads.
Netflix is not alone in its decision to embrace ads. Competitors like HBO Max and Hulu already offer ad-tiered plans. These plans are cheaper than their commercial-free services.
They are catered to users willing to sit through ads for a lower monthly subscription.
Alphabet, YouTube’s parent company, knows how to maximize revenue from its viewership. They realized the value of streaming paid content and capitalized on that with YouTube TV.
Think of YouTube TV as an emulation of an actual television subscription. Instead of offering specific movies or TV shows, YouTube lets you stream over 70 channels.
YouTube TV is not trying to be another Netflix. Instead, Alphabet is going directly after cable TV. Netflix will not let you stream other channels. This, by extension, limits the range of content you can find on Netflix.
Netflix is not a viable substitute for cable TV. However, YouTube TV delivers more than 70 channels, including local broadcast networks.
The breadth of content you can stream is unparalleled.
You could argue that YouTube TV isn’t the same as YouTube. Both target different buyer personas.
The monthly cost of YouTube TV and Netflix reflects the range of content on offer. Netflix subscriptions start at $10 per month. YouTube TV will set you back $65 per month.
This clearly shows that YouTube TV isn’t directly competing with Netflix. YouTube TV’s sheer lineup of content dwarfs anything that Netflix can offer.
It recently added Viacom channels like VH1 and MTV, making YouTube TV more viable. It is the ideal choice for sports fans with the addition of NFL Network for all subscribers.
A Sports Plus package includes MAVTV, GOLTV, Fox College Sports, and TVG, among others. No sports fans would expect to see a game of football on Netflix.
YouTube TV benefits from the same intuitive, easy-to-use interface as YouTube. It is available on every major platform, including Android, iOS, and smart TVs.
What truly sets YouTube TV apart from the competition is DVR storage. There is no limit to simultaneous recordings. Users can store these recordings for nine months.
YouTube TV has many competitors – Netflix is not in the running. Their main competitors include Hulu with Live TV and DirecTV Stream.
Many shows that you can stream on YouTube TV won’t be found on Netflix.
Read YouTube Channels to follow to create niche websites and make money as a beginner
Every person’s viewing habits are different.
You don’t have to spend a single penny to stream on YouTube. Netflix subscription, on the other hand, starts at $10 per month (rounded off from $9.99).
Netflix has various paid plans. The standard tier starts at $15.49 for HD streaming in California. $19.99 per month is the price for 4K UHD video.
The total amount you spend on Netflix depends on your needs.
YouTube, on the other hand, is free. But there are ‘hidden’ costs of using YouTube. For example, you might end up purchasing a product or service when an influencer endorses them.
Many YouTubers have lost millions because their favorite influencer asked them to invest in a certain crypto coin.
Another cost of using YouTube is ads. You will have to sit through ads before you can watch your favorite video. Ads will also interrupt videos that are longer (over 5 minutes).
This can disrupt your entertainment session. Most people listen to music and podcasts on YouTube while working or studying. They will have to stop these activities to skip ads.
This can be an annoying experience for many YouTubers.
YouTube TV costs $64.99. This is cheaper than cable TV but is expensive compared to Netflix.
This round goes to YouTube. YouTube lets anyone from around the world upload user-generated content.
If you aspire to become a content creator, then YouTube is the place to be. Netflix, on the other hand, does not offer this option.
Getting your content featured on Netflix requires jumping through many hoops. Expect to conduct many meetings with executives behind closed doors to strike a deal or two.
That said, Netflix recognizes the need to give all content producers a level playing field. But they are more likely to accept content from producers with a proven history of success.
Netflix claims that they maintain deep relationships with talent agencies around the world. They receive thousands of ideas for projects. Netflix is also likely to purchase the rights to use your work.
In all cases, getting your work featured on Netflix is not easy. The process is more complicated with very high-quality standards you must meet.
Both YouTube and Netflix do what they’re supposed to do exceptionally well. YouTube leads the world in user-generated content.
YouTube continues to push the envelope in streaming technology, setting precedence for its competitors. Netflix reigns supreme when it comes to hosting paid entertainment media.
Both target audiences are at different stages of the buyer journey. So, which streaming services in California are you more likely to use?
You may like the following articles:
- How to Earn Money from YouTube
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I am Hannah, an online entrepreneur based in New York, United States. As the founder of several successful niche websites, I got the expertise in areas such as making money online, blogging, YouTube, affiliate marketing, and more. Through this website and blog posts, I am trying to provide insightful and actionable tips to help aspiring entrepreneurs, find ways to make money online. Read more.