> The figure, which totals the money generated through advertising on YouTube as well as paid subscriptions, far surpasses streaming rival Netflix's $45bn revenue.
I wonder if this is a fair comparison, though. It strikes me that Netflix’ revenue model is simpler and their costs are also lower, but I guess we won’t know YouTube’s costs any time soon.
Youtube's content pipeline is free (for them - people willingly give the content to youtube!)
Netflix's content pipeline is hella expensive, due to their being boycotted by major content owners (like disney).
So i would imagine that youtube's revenue model is more efficient and thus generate a higher return than netflix's.
YouTube pays something like 55% of its revenue to creators which is effectively its cost of content.
> which is effectively its cost of content.
only if that video generated sufficient revenue to pay out - which is quite a high bar. But the long tail of content is what draws people onto youtube as a platform - so youtube derive a benefit from this long tail content that they do not pay for.
However, the long tail for netflix won't have this advantage at all (because even niche shows with low audience will cost money to produce).
Not to mention that netflix has to pay upfront for their content. Where as youtube only pays _after_ the content has had ads displayed that generated revenue.
Why would Netflix cost less to run when YT is mostly user generated content? Am I missing something? Both have to stream it
Netflix has a far smaller catalogue and can cache content in exchanges very close to the user, see [1]. Also YouTube pays their creators.
[1]: https://en.wikipedia.org/wiki/Open_Connect
Google has its Global Cache: https://en.wikipedia.org/wiki/Google_Global_Cache
One might imagine that the cache-ability is lower than Netflix, I can't comment on this, but GGC is very significant.
Fewer unique video hours, YouTube pays residuals, vastly smaller library to personalize
Netflix is a production studio with an app, Youtube is a hosting service.
500 hours of video getting uploaded a min plus processing costs (including AI) for no upfront $$s. Far simpler CDN optimization
> and their costs are also lower
How so? Netflix has to license or produce all their content.