March 4, 2024

Vision Cim

Thank Business Its Friday

YouTube Set to Beat Netflix As the Biggest Video-Streaming Business

  • Netflix has for years been the biggest streaming business in the world.
  • As Netflix’s subscriber growth slows, YouTube’s revenue may soon outpace it, an analyst says.
  • YouTube’s revenue grew 43% last year, compared to 16% at Netflix.

YouTube grew so much lately that 2022 could be the year it supersedes


as the biggest


business by one important measure.

While also considered a social-media platform, the Google-owned site’s focus on video makes it a big rival for streamers, including Netflix. And although Netflix has long been the biggest by revenue, YouTube’s continued growth has it poised to beat it as soon as this year, said Neil Campling, an analyst at Mirabaud Equity Research.

YouTube’s ad revenue was $7.2 billion in the third quarter, up 43% from a year earlier. Meanwhile Netflix, with quarterly revenue of $7.5 billion, grew 16% during the same period.

While YouTube has exponentially more users, Netflix has been able to win on revenue with its model of paid-only subscriptions. But with YouTube’s continued rate of growth, Campling said it would “soon eclipse Netflix as the new king of streaming.” If YouTube were a stand-alone company, he added in a note to investors, it would be worth $600 billion to $700 billion. Netflix’s market capitalization is $265 billion.

Part of YouTube’s growth may be its ability to do livestreaming, which Netflix doesn’t offer. Mirabaud said rapper Travis Scott’s 2020 concert on the video game “Fortnite” also streamed on YouTube, where more than 140 million people watched it. Late last year, more than 142 million people over eight days watched YouTube creator MrBeast re-create Netflix’s “Squid Game,” which was the streamer’s most-watched show ever.

Even if Netflix falls behind YouTube on revenue this year, it still has advantages, including close ties with top Hollywood talent and scores of Oscar nominations. But keeping up this level of competition on content is increasingly expensive, with wealthy rivals, such as Disney, Amazon, and Apple, investing heavily in the business. Netflix is expected to spend almost $14 billion this year on content, an amount that could grow by 2025 to $19 billion.

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