Latest news with #ReedHastings
Yahoo
4 days ago
- Business
- Yahoo
Netflix (NASDAQ:NFLX) Reports Q2 In Line With Expectations, Provides Encouraging Quarterly Revenue Guidance
Streaming video giant Netflix (NASDAQ: NFLX) met Wall Street's revenue expectations in Q2 CY2025, with sales up 15.9% year on year to $11.08 billion. The company expects next quarter's revenue to be around $11.53 billion, coming in 2% above analysts' estimates. Its GAAP profit of $7.19 per share was 1.7% above analysts' consensus estimates. Is now the time to buy Netflix? Find out in our full research report. Netflix (NFLX) Q2 CY2025 Highlights: Revenue: $11.08 billion vs analyst estimates of $11.08 billion (15.9% year-on-year growth, in line) EPS (GAAP): $7.19 vs analyst estimates of $7.07 (1.7% beat) The company lifted its revenue guidance for the full year to $45 billion at the midpoint from $44 billion, a 2.3% increase EPS (GAAP) guidance for Q3 CY2025 is $6.87 at the midpoint, beating analyst estimates by 2.9% Operating Margin: 34.1%, up from 27.2% in the same quarter last year Free Cash Flow Margin: 20.5%, down from 25.2% in the previous quarter Market Capitalization: $532.1 billion Company Overview Launched by Reed Hastings as a DVD mail rental company until its famous pivot to streaming in 2007, Netflix (NASDAQ: NFLX) is a pioneering streaming content platform. Revenue Growth A company's long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last three years, Netflix grew its sales at a decent 10.3% compounded annual growth rate. Its growth was slightly above the average consumer internet company and shows its offerings resonate with customers. This quarter, Netflix's year-on-year revenue growth was 15.9%, and its $11.08 billion of revenue was in line with Wall Street's estimates. Company management is currently guiding for a 17.3% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 13.8% over the next 12 months, an acceleration versus the last three years. This projection is particularly noteworthy for a company of its scale and suggests its newer products and services will spur better top-line performance. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. Cash Is King If you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. Netflix has shown robust cash profitability, driven by its cost-effective customer acquisition strategy that enables it to invest in new products and services rather than sales and marketing. The company's free cash flow margin averaged 19.6% over the last two years, quite impressive for a consumer internet business. Taking a step back, we can see that Netflix's margin expanded by 19.9 percentage points over the last few years. This is encouraging, and we can see it became a less capital-intensive business because its free cash flow profitability rose more than its operating profitability. Netflix's free cash flow clocked in at $2.27 billion in Q2, equivalent to a 20.5% margin. This result was good as its margin was 7.8 percentage points higher than in the same quarter last year, building on its favorable historical trend. Key Takeaways from Netflix's Q2 Results It was encouraging to see Netflix raise its revenue and operating margin guidance for next quarter. We were also glad its EPS exceeded Wall Street's estimates. Overall, this print had some key positives, but investors were likely hoping for more given the rich valuation. Shares traded down 1.1% to $1,262 immediately after reporting. Big picture, is Netflix a buy here and now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it's free.
Yahoo
4 days ago
- Business
- Yahoo
Netflix founder saddled with $76M in EB-5 debt at North America's biggest ski resort: lawsuit
Netflix founder Reed Hastings may need to dig himself out of a $75.9 million crevasse at North America's biggest ski resort. The streaming giant's former CEO is wrangling with a group of EB-5 investors who say he's on the hook for unpaid debt tied to Utah's Powder Mountain, according to a lawsuit filed in Manhattan Supreme Court in April. The immigrant-backed fund has been fighting since 2021 to recoup its $42 million investment, plus interest, in Powder Summit, a floundering utopian ski venture launched more than a decade ago by tech entrepreneur Greg Mauro and Elliott Bisnow, the co-founder of media and events company Bisnow Media. The focus shifted abruptly to Hastings after he took the helm of the development in 2023, something the EB-5 investors say they should have been consulted about, according to proceedings in Utah and New York. 'Like any kind of real estate transaction, we just want our money back,' said Alexander Shing, the CEO of Los Angeles-based Cottonwood, the loan servicer representing the EB-5 investors in litigation. 'Why are you stiffing 80 families that clearly loaned money and have recourse against this company?' After retiring from Netflix in 2023, Hastings paid $100 million for a controlling stake in Summit Mountain Holding Group, the subsidiary that owns the mountain and its debt, according to court filings obtained by The Real Deal in the New York case, which is under seal. Publicly, Hastings has set out to bring a bit of St. Moritz to Utah, announcing the launch of Powder Haven, a high-altitude private ski colony for the ultra-wealthy. With Hastings in charge, Powder Mountain's new slogan is 'Escape the Masses.' The project's developers have so far added a few chair lifts to the mountain and raised the price of admission dramatically from $750 in 2023 to $1,599 for an adult season pass while closing off sections of the property to the public to provide exclusive access to families purchasing homes in the future private ski village. (The nearby Park City resort, which has double the number of slopes as Powder Mountain, charges only $1,051 for a season pass.) The new vision replaces Mauro and Bisnow's defunct Powder Summit, which, for its part, was the latest in a line of failed efforts to develop the pristine expanse of mountain slopes spanning 8,464 acres about 50 miles north of Salt Lake City. The partners bought Powder Mountain in 2013 for $40 million. The site is 'a hidden gem literally between the towns of Eden and paradise,' Mauro said in a 2017 TED talk promoting the venture. The plan back then was to make Powder Mountain the new homebase for Summit Series, a conference series founded in 2008 billing itself as a sort of bohemian version of Davos. The Powder Summit partners soon found a lender that believed in their vision to make a rugged mountain town prosper: KT Capital's Tang Tang, a regional fund manager who saw Powder Mountain as a prime candidate for the cash-for-greencard program known as EB-5. Tang, who is now part of the legal effort to claw back the funds he helped raise, declined to comment on the case. The visa program, which went through regulatory changes to increase oversight in 2022, has been a popular source of capital for real estate developers, with ski resorts like Vermont's Jay Peak forming a specialized subgenre. Powder Summit's partners signed a loan agreement in 2016 to receive up to $120 million in EB-5 funding, with concessionary terms that encouraged matching capital from outside sources. The fund would be overseen by Mountain States Center for Foreign Investment, Utah's first EB-5 regional center, with KT Capital serving as the fund manager and Cottonwood acting as the loan servicer. Crucially, the loan provides a completion guarantee and recourse indemnity, which would soon come into play. Powder Summit started heading downhill a few years after the EB-5 fund launched. The developers managed to add a road and several structures on the high-altitude site, but the promised 80 condos and townhouses plus 214 hotel keys never came to fruition. Instead, Powder Summit stopped making payments on its EB-5 loan in January 2019 after raising just $42 million worth of investment, almost all of it from families in China, according to court filings. The debt came due in June 2021 and workout talks quickly fell apart, triggering a default notice later that year. Things became more acriminious from there, with Powder Summit filing suit against its EB-5 lenders and putting off its debt obligations longer as the litigation played out. The EB-5 investors successfully fought off Powder Summit's accusations of unfair business dealings, then hit back with counterclaims. The case was still winding its way through a Utah Supreme Court in 2023 when Hastings bought the flailing development. A spokesperson for Summit Mountain Holding Group did not make anyone from the company available for an interview and declined to answer specific questions about the EB-5 investors' claims. 'The pending litigation relates to claims that predate the current ownership's acquisition of the company,' the spokesperson said in a statement. 'Ownership has always been aware of these claims, however, no individual owner is personally liable for potential obligations of the company.' Powder Haven's development timeline will not be impacted by the litigation, regardless of its outcome, the spokesperson added. Lawyers for Hasting's firm are asking a judge to dismiss the lawsuit, according to a motion filed in June. 'There are good things that come out of EB-5,' Cottonwood's Shing said. 'Then there are some people that abuse the program, thinking that this is free money and you don't have to pay it back.' 'Nobody saw this coming': Trump's plans to kill EB-5 shocks industry Chinese investors sue SECO Development for fraud in hotel project Trump admin grants EB-5 visa to Kushner's Jersey towers This article originally appeared on The Real Deal. Click here to read the full story. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Straits Times
7 days ago
- Entertainment
- Straits Times
The streaming wars come down to 2: YouTube v Netflix
The rivalry between Netflix and YouTube signals how the streaming wars have entered a new phase. For many years, Netflix executives bristled at the notion that the company really had a rival. Not Hollywood powerhouses like Disney, nor tech giants like Amazon. Instead, Mr Reed Hastings, the company's co-founder, insisted at one point that Netflix competed with people's desire to socialise, or to go to sleep. But there's no hiding from YouTube. Netflix and YouTube are increasingly locked in a fierce battle for control over the television set, a rivalry that even Netflix's executives can no longer deny. 'That was more of a fun narrative than it was, you know, the brutal truth,' Mr Jason Kilar, the founding CEO of Hulu and a former CEO of WarnerMedia, said about those past comments. 'The brutal truth is that YouTube is indeed the biggest competitor of Netflix at this point.' The rivalry signals how the streaming wars have entered a new phase. Top stories Swipe. Select. Stay informed. World Trump arms Ukraine and threatens sanctions on countries that buy Russian oil Multimedia From local to global: What made top news in Singapore over the last 180 years? Singapore Turning tragedy into advocacy: Woman finds new purpose after paralysis Singapore HSA intensifies crackdown on vapes; young suspected Kpod peddlers nabbed in Bishan, Yishun Opinion Sumiko at 61: When beauty fades, why do some accept it better than others? Singapore Man charged over distributing nearly 3 tonnes of vapes in one day in Bishan, Ubi Avenue 3 Singapore Man allegedly attacks woman with knife at Kallang Wave Mall, to be charged with attempted murder Singapore Ex-cop charged after he allegedly went on MHA portal, unlawfully shared info with man For years, increasing subscriber numbers to their streaming services was the ultimate goal for media companies. Now, those companies are trying to increase the amount of time viewers spend on their service. On that score, YouTube and Netflix stand above the competition. The two accounted for 20 per cent of all television viewing time in the United States in May – 12.5 per cent for YouTube, 7.5 per cent for Netflix, according to Nielsen, which provides audience measurement data for Netflix, including both streaming and linear TV viewership, in the US, Mexico, and Poland. The next closest streaming competitor is Disney, whose multiple streaming services (Disney+, Hulu, ESPN+) together accounted for 5 per cent of TV time in May, Nielsen said. And YouTube's lead keeps getting wider. Two years ago, YouTube's share of TV time was roughly half a percentage point higher than Netflix's – now it is 5 percentage points. Their strategies for success are very different, but, in ways large and small, it's becoming clear that they are now competing head-on. Top executives at both companies are beginning to mention each other in public more, sometimes dismissively. And the companies are veering into each other's turf, with Netflix executives showing an increased appetite for signing up creators who otherwise call YouTube their home – and trying to explain why their business model would be better for them. 'Who is in the biggest fight around scale and eyeball aggregation? YouTube and Netflix,' said Ben Silverman, the chair of Propagate, a production company, and a former chair of NBC Entertainment. Representatives for Netflix and YouTube declined to comment for this article. Both companies are competing from a position of strength. Netflix's revenue in 2024 reached US$39 billion (S$50 billion), and it has more than 300 million global subscribers, more than any other streaming service. The company is also hugely profitable: Netflix had more than US$10 billion in operating income in 2024. YouTube, which is owned by Google, had revenue of US$54 billion in the same year. The only media company with more was Disney. MoffettNathanson, a media analyst group, projected that YouTube would eclipse Disney in revenue this year and described it as 'the new king of all media.' The company does not disclose profits, but MoffettNathanson estimated that YouTube's operating income was just under US$8 billion in 2024. The two companies have very different approaches. Netflix is in the business of making and licensing traditional television shows, movies, documentaries, game shows or reality TV. The company hand-selects what it puts on its service, pays talent upfront and finances all the production costs, and often retains ownership of its original programs. YouTube allows anyone to post almost anything. People who upload an original video shoulder the financial cost upfront, but they also collect a check from YouTube based on the amount of revenue it generates. Those creators generally own the rights to their content. YouTube took a stab at making original TV shows but abandoned that game plan years ago. It worked. Now people go to YouTube for virtually anything, ranging from cat videos to music playlists to video podcasts. On average, YouTube has an audience of 7 million viewers watching off a TV set at any given moment during the day, more than Netflix's daily average of 4.7 million, Nielsen said. During prime-time hours, however, when the highest concentration of viewers is watching TV, the margins are tighter. An average of 11.1 million Americans are tuned into YouTube on their TV screens at night this year while 10.7 million are watching Netflix, Nielsen said. Of course, Nielsen only measures viewership off a TV screen. Both companies have huge audiences that watch in other ways, including on a smartphone, tablet or laptop. Roughly 70 per cent of Netflix's audience, for instance, watches its programmes via a television set, and the other 30 per cent through other devices, the company said. In March, at an event hosted by the Paley Media Council, Netflix co-CEO Ted Sarandos compared YouTube to the minor leagues. When a creator works with YouTube, he said, that person can 'cut their teeth or develop an idea'. 'It's a little bit of a farm league,' he continued. 'And then they can come up and do something that we would take the financial risk with them.' Mr Sarandos also suggested that Netflix remained a platform where you pay close attention to a program – an intentional choice essentially, perhaps during prime time – whereas YouTube was a far more passive viewing experience. 'There's a difference between spending time and killing time,' he said. 'We're in the how-you-spend-time business.' Mr Neal Mohan, YouTube's CEO, responded to Mr Sarandos' commentary at an advertiser event in France in June, emphasising that viewers 'get to decide how to spend' their time. 'Who am I to say what's spending time, engaging time, quality time, killing time?' he said, at an event hosted by The Ankler, an entertainment news outlet. 'That's, frankly, just the industry kind of talking to itself.' And when Mr Mohan was asked what he had been watching recently, he mentioned a documentary about Brett Favre - an American former professional football quarterback who played in the National Football League (NFL) for 20 seasons - before getting a jab in. 'It was on Netflix,' he said, 'so I don't know if I was killing time there.' In recent months, Netflix has licensed shows from creators who used to be primarily on YouTube. 'Ms. Rachel,' a children's program that appears on YouTube, has also been streaming on Netflix since the beginning of the year, to great success. Netflix has also brought on shows like the game show 'Pop the Balloon' and 'Sidemen,' a popular British YouTube group. The company has also been in discussions with representatives from other popular YouTube channels, including Mark Rober, Dude Perfect, Danny Go and Gracie's Corner, according to two people familiar with the negotiations. Mr Jad Dayeh, a senior partner at the William Morris Endeavor talent agency, said Netflix executives had taken a much greater interest in YouTube over the past year or so. 'They're unfazed by, like, Apple and HBO Max – it's very clear that they do not care what Apple is doing,' he said. 'But they're more conscious of what YouTube is doing.' Similarly, Mr Oren Rosenbaum, a partner at the United Talent Agency, said: 'They're jealous of each other. I don't think either one wants to admit that to themselves or each other. But when you have conversations with each of them, there is that jealousy.' Both companies have tech roots. And in the tech world, there is often a competition between two or three top companies for leading market share in any given industry. Amazon battles Microsoft in cloud computing. Microsoft, Google and Amazon compete in the upper rungs of artificial intelligence. And Apple and Google go head-to-head for the top of the smartphone market. As with the competition between the iPhone and Android smartphones, Netflix and YouTube are essentially two different systems: a closed platform (Netflix) versus an open one (YouTube). And while Netflix's recommendations for viewers are far ahead of many of its streaming competitors', YouTube has more data inputs from users to make even more precise recommendations. 'When you open up YouTube you are going to get a far more surgical presentation of things to entertain you than you will ever get at a traditional streamer,' said Mr Kilar, the former Hulu and WarnerMedia CEO. Of course, within all of video entertainment, in particular mobile viewing, the companies also fiercely compete with TikTok and Instagram. But Mr Kilar believes that in the coming years, Netflix will continue to take viewing share from its traditional Hollywood rivals. He also thinks YouTube has greater potential to expand its viewing time, though, given the growth trajectory of shorter videos, particularly with younger audiences. 'I'm bullish on both companies, make no mistake, but I am relatively more bullish on YouTube,' he said. During the go-go cable years, entertainment executives used to repeat the mantra, 'content is king.' Mr Dayeh, the talent agent, said that these days 'audience is king' – and these two players stand to benefit the most. 'Netflix was like, 'We want to be a studio,' and they became a platform,' he said. 'YouTube was a platform that is now becoming a studio. But what they both did was create these forums that are for everyone. 'That's where the battle starts to really shape up,' he said, 'because they're competing for the same 'everyone' audience.' NYTIMES
The Star
14-07-2025
- Business
- The Star
The streaming wars come down to two: YouTube vs Netflix
For many years, Netflix executives bristled at the notion that the company really had a rival. Not Hollywood powerhouses like Disney, nor tech giants like Amazon. Instead, Reed Hastings, the company's co-founder, insisted at one point that Netflix competed with people's desire to socialise, or to go to sleep. But there's no hiding from YouTube. Netflix and YouTube are increasingly locked in a fierce battle for control over the television set, a rivalry that even Netflix's executives can no longer deny. 'That was more of a fun narrative than it was, you know, the brutal truth,' Jason Kilar, the founding CEO of Hulu and a former CEO of WarnerMedia, said about those past comments. 'The brutal truth is that YouTube is indeed the biggest competitor of Netflix at this point.' The rivalry signals how the streaming wars have entered a new phase. For years, increasing subscriber numbers to their streaming services was the ultimate goal for media companies. Now, those companies are trying to increase the amount of time viewers spend on their service. On that score, YouTube and Netflix stand above the competition. The two accounted for 20% of all television viewing time in the United States in May – 12.5% for YouTube, 7.5% for Netflix, according to Nielsen. The next closest streaming competitor is Disney, whose multiple streaming services (Disney+, Hulu, ESPN+) together accounted for 5% of TV time in May, Nielsen said. And YouTube's lead keeps getting wider. Two years ago, YouTube's share of TV time was roughly half a percentage point higher than Netflix's – now it is 5 percentage points. Their strategies for success are very different, but, in ways large and small, it's becoming clear that they are now competing head-on. Top executives at both companies are beginning to mention each other in public more, sometimes dismissively. And the companies are veering into each other's turf, with Netflix executives showing an increased appetite for signing up creators who otherwise call YouTube their home – and trying to explain why their business model would be better for them. 'Who is in the biggest fight around scale and eyeball aggregation? YouTube and Netflix,' said Ben Silverman, the chair of Propagate, a production company, and a former chair of NBC Entertainment. Representatives for Netflix and YouTube declined to comment for this article. Both companies are competing from a position of strength. Netflix's revenue in 2024 reached US$39bil (RM165.96bil), and it has more than 300 million global subscribers, more than any other streaming service. The company is also hugely profitable: Netflix had more than US$10bil (RM42.55bil) in operating income last year. YouTube, which is owned by Google, had revenue of US$54bil (RM229.80bil) last year. The only media company with more was Disney. MoffettNathanson, a media analyst group, projected that YouTube would eclipse Disney in revenue this year and described it as 'the new king of all media'. The company does not disclose profits, but MoffettNathanson estimated that YouTube's operating income was just under US$8bil (RM34.04bil) in 2024. The two companies have very different approaches. Netflix is in the business of making and licensing traditional television shows, movies, documentaries, game shows or reality TV. The company hand-selects what it puts on its service, pays talent upfront and finances all the production costs, and often retains ownership of its original programs. YouTube allows anyone to post almost anything. People who upload an original video shoulder the financial cost upfront, but they also collect a cheque from YouTube based on the amount of revenue it generates. Those creators generally own the rights to their content. YouTube took a stab at making original TV shows but abandoned that game plan years ago. It worked. Now people go to YouTube for virtually anything, ranging from cat videos to music playlists to video podcasts. On average, YouTube has an audience of seven million viewers watching off a TV set at any given moment during the day, more than Netflix's daily average of 4.7 million, Nielsen said. During prime-time hours, however, when the highest concentration of viewers is watching TV, the margins are tighter. An average of 11.1 million Americans are tuned into YouTube on their TV screens at night this year while 10.7 million are watching Netflix, Nielsen said. Of course, Nielsen only measures viewership off a TV screen. Both companies have huge audiences that watch in other ways, including on a smartphone, tablet or laptop. Roughly 70% of Netflix's audience, for instance, watches its programs via a television set, and the other 30% through other devices, the company said. In March, at an event hosted by the Paley Media Council, Netflix co-CEO Ted Sarandos compared YouTube to the minor leagues. When a creator works with YouTube, he said, that person can 'cut their teeth or develop an idea'. 'It's a little bit of a farm league,' he continued. 'And then they can come up and do something that we would take the financial risk with them.' Sarandos also suggested that Netflix remained a platform where you pay close attention to a program – an intentional choice essentially, perhaps during prime time – whereas YouTube was a far more passive viewing experience. 'There's a difference between spending time and killing time,' he said. 'We're in the how-you-spend-time business.' Neal Mohan, YouTube's CEO, responded to Sarandos' commentary at an advertiser event in France last month, emphasising that viewers 'get to decide how to spend' their time. 'Who am I to say what's spending time, engaging time, quality time, killing time?' he said, at an event hosted by The Ankler, an entertainment news outlet. 'That's, frankly, just the industry kind of talking to itself.' And when Mohan was asked what he had been watching recently, he mentioned a documentary about Brett Favre before getting a jab in. 'It was on Netflix,' he said, 'so I don't know if I was killing time there.' In recent months, Netflix has licensed shows from creators who used to be primarily on YouTube. Ms. Rachel, a children's programme that appears on YouTube, has also been streaming on Netflix since the beginning of the year, to great success. Netflix has also brought on shows like the game show Pop The Balloon and 'Sidemen', a popular British YouTube group. The company has also been in discussions with representatives from other popular YouTube channels, including Mark Rober, Dude Perfect, Danny Go and Gracie's Corner, according to two people familiar with the negotiations. Jad Dayeh, a senior partner at the William Morris Endeavor talent agency, said Netflix executives had taken a much greater interest in YouTube over the past year or so. 'They're unfazed by, like, Apple and HBO Max – it's very clear that they do not care what Apple is doing,' he said. 'But they're more conscious of what YouTube is doing.' Similarly, Oren Rosenbaum, a partner at the United Talent Agency, said: 'They're jealous of each other. I don't think either one wants to admit that to themselves or each other. But when you have conversations with each of them, there is that jealousy.' Both companies have tech roots. And in the tech world, there is often a competition between two or three top companies for leading market share in any given industry. Amazon battles Microsoft in cloud computing. Microsoft, Google and Amazon compete in the upper rungs of artificial intelligence. And Apple and Google go head-to-head for the top of the smartphone market. As with the competition between the iPhone and Android smartphones, Netflix and YouTube are essentially two different systems: a closed platform (Netflix) versus an open one (YouTube). And while Netflix's recommendations for viewers are far ahead of many of its streaming competitors', YouTube has more data inputs from users to make even more precise recommendations. 'When you open up YouTube you are going to get a far more surgical presentation of things to entertain you than you will ever get at a traditional streamer,' said Kilar, the former Hulu and WarnerMedia CEO. Of course, within all of video entertainment, in particular mobile viewing, the companies also fiercely compete with TikTok and Instagram. But Kilar believes that in the coming years, Netflix will continue to take viewing share from its traditional Hollywood rivals. But he thinks YouTube has greater potential to expand its viewing time, given the growth trajectory of shorter videos, particularly with younger audiences. 'I'm bullish on both companies, make no mistake, but I am relatively more bullish on YouTube,' he said. During the go-go cable years, entertainment executives used to repeat the mantra, 'content is king'. Dayeh, the talent agent, said that these days 'audience is king' – and two players stand to benefit the most. 'Netflix was like, 'We want to be a studio', and they became a platform,' he said. 'YouTube was a platform that is now becoming a studio. But what they both did was create these forums that are for everyone. 'That's where the battle starts to really shape up,' he said, 'because they're competing for the same everyone audience.' – ©2025 The New York Times Company This article originally appeared in The New York Times.
Time of India
12-07-2025
- Entertainment
- Time of India
The streaming wars come down to 2: YouTube v. Netflix
For many years, Netflix executives bristled at the notion that the company really had a rival. Not Hollywood powerhouses like Disney , nor tech giants like Amazon. Instead, Reed Hastings , the company's co-founder, insisted at one point that Netflix competed with people's desire to socialize, or to go to sleep. But there's no hiding from YouTube . Netflix and YouTube are increasingly locked in a fierce battle for control over the television set, a rivalry that even Netflix's executives can no longer deny. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Top Public Speaking Course for Children Planet Spark Book Now Undo "That was more of a fun narrative than it was, you know, the brutal truth," Jason Kilar, the founding CEO of Hulu and a former CEO of WarnerMedia, said about those past comments. "The brutal truth is that YouTube is indeed the biggest competitor of Netflix at this point." The rivalry signals how the streaming wars have entered a new phase. Live Events For years, increasing subscriber numbers to their streaming services was the ultimate goal for media companies. Now, those companies are trying to increase the amount of time viewers spend on their service. On that score, YouTube and Netflix stand above the competition. The two accounted for 20% of all television viewing time in the United States in May -- 12.5% for YouTube, 7.5% for Netflix, according to Nielsen. The next closest streaming competitor is Disney, whose multiple streaming services (Disney+, Hulu, ESPN+) together accounted for 5% of TV time in May, Nielsen said. And YouTube's lead keeps getting wider. Two years ago, YouTube's share of TV time was roughly half a percentage point higher than Netflix's -- now it is 5 percentage points. Their strategies for success are very different, but, in ways large and small, it's becoming clear that they are now competing head-on. Top executives at both companies are beginning to mention each other in public more, sometimes dismissively. And the companies are veering into each other's turf, with Netflix executives showing an increased appetite for signing up creators who otherwise call YouTube their home -- and trying to explain why their business model would be better for them. "Who is in the biggest fight around scale and eyeball aggregation? YouTube and Netflix," said Ben Silverman, the chair of Propagate, a production company, and a former chair of NBC Entertainment. Representatives for Netflix and YouTube declined to comment for this article. Both companies are competing from a position of strength. Netflix's revenue in 2024 reached $39 billion, and it has more than 300 million global subscribers, more than any other streaming service. The company is also hugely profitable: Netflix had more than $10 billion in operating income last year. YouTube, which is owned by Google, had revenue of $54 billion last year. The only media company with more was Disney. MoffettNathanson, a media analyst group, projected that YouTube would eclipse Disney in revenue this year and described it as "the new king of all media." The company does not disclose profits, but MoffettNathanson estimated that YouTube's operating income was just under $8 billion in 2024. The two companies have very different approaches. Netflix is in the business of making and licensing traditional television shows, movies, documentaries, game shows or reality TV. The company hand-selects what it puts on its service, pays talent upfront and finances all the production costs, and often retains ownership of its original programs. YouTube allows anyone to post almost anything. People who upload an original video shoulder the financial cost upfront, but they also collect a check from YouTube based on the amount of revenue it generates. Those creators generally own the rights to their content. YouTube took a stab at making original TV shows but abandoned that game plan years ago. It worked. Now people go to YouTube for virtually anything, ranging from cat videos to music playlists to video podcasts. On average, YouTube has an audience of 7 million viewers watching off a TV set at any given moment during the day, more than Netflix's daily average of 4.7 million, Nielsen said. During prime-time hours, however, when the highest concentration of viewers is watching TV, the margins are tighter. An average of 11.1 million Americans are tuned into YouTube on their TV screens at night this year while 10.7 million are watching Netflix, Nielsen said. Of course, Nielsen only measures viewership off a TV screen. Both companies have huge audiences that watch in other ways, including on a smartphone, tablet or laptop. Roughly 70% of Netflix's audience, for instance, watches its programs via a television set, and the other 30% through other devices, the company said. In March, at an event hosted by the Paley Media Council, Netflix co-CEO Ted Sarandos compared YouTube to the minor leagues. When a creator works with YouTube, he said, that person can "cut their teeth or develop an idea." "It's a little bit of a farm league," he continued. "And then they can come up and do something that we would take the financial risk with them." Sarandos also suggested that Netflix remained a platform where you pay close attention to a program -- an intentional choice essentially, perhaps during prime time -- whereas YouTube was a far more passive viewing experience. "There's a difference between spending time and killing time," he said. "We're in the how-you-spend-time business." Neal Mohan, YouTube's CEO, responded to Sarandos' commentary at an advertiser event in France last month, emphasizing that viewers "get to decide how to spend" their time. "Who am I to say what's spending time, engaging time, quality time, killing time?" he said, at an event hosted by The Ankler, an entertainment news outlet. "That's, frankly, just the industry kind of talking to itself." And when Mohan was asked what he had been watching recently, he mentioned a documentary about Brett Favre before getting a jab in. "It was on Netflix," he said, "so I don't know if I was killing time there." In recent months, Netflix has licensed shows from creators who used to be primarily on YouTube. "Ms. Rachel," a children's program that appears on YouTube, has also been streaming on Netflix since the beginning of the year, to great success. Netflix has also brought on shows like the game show "Pop the Balloon" and "Sidemen," a popular British YouTube group. The company has also been in discussions with representatives from other popular YouTube channels, including Mark Rober, Dude Perfect, Danny Go and Gracie's Corner, according to two people familiar with the negotiations. Jad Dayeh, a senior partner at the William Morris Endeavor talent agency, said Netflix executives had taken a much greater interest in YouTube over the past year or so. "They're unfazed by, like, Apple and HBO Max -- it's very clear that they do not care what Apple is doing," he said. "But they're more conscious of what YouTube is doing." Similarly, Oren Rosenbaum, a partner at the United Talent Agency, said: "They're jealous of each other. I don't think either one wants to admit that to themselves or each other. But when you have conversations with each of them, there is that jealousy." Both companies have tech roots. And in the tech world, there is often a competition between two or three top companies for leading market share in any given industry. Amazon battles Microsoft in cloud computing. Microsoft, Google and Amazon compete in the upper rungs of artificial intelligence. And Apple and Google go head-to-head for the top of the smartphone market. As with the competition between the iPhone and Android smartphones, Netflix and YouTube are essentially two different systems: a closed platform (Netflix) versus an open one (YouTube). And while Netflix's recommendations for viewers are far ahead of many of its streaming competitors', YouTube has more data inputs from users to make even more precise recommendations. "When you open up YouTube you are going to get a far more surgical presentation of things to entertain you than you will ever get at a traditional streamer," said Kilar, the former Hulu and WarnerMedia CEO. Of course, within all of video entertainment, in particular mobile viewing, the companies also fiercely compete with TikTok and Instagram. But Kilar believes that in the coming years, Netflix will continue to take viewing share from its traditional Hollywood rivals. But he thinks YouTube has greater potential to expand its viewing time, given the growth trajectory of shorter videos, particularly with younger audiences. "I'm bullish on both companies, make no mistake, but I am relatively more bullish on YouTube," he said. During the go-go cable years, entertainment executives used to repeat the mantra, "content is king." Dayeh, the talent agent, said that these days "audience is king" -- and two players stand to benefit the most. "Netflix was like, 'We want to be a studio,' and they became a platform," he said. "YouTube was a platform that is now becoming a studio. But what they both did was create these forums that are for everyone. "That's where the battle starts to really shape up," he said, "because they're competing for the same everyone audience."
