Recently, Google’s YouTube service has grown so significantly that in 2022 it may dethrone Netflix in the streaming services category, especially through one important element.
Considered as a social networking site, YouTube is primarily a site where video content is uploaded, which makes it a huge threat to streaming platforms such as Netflix. And while the second site has dominated revenue for years, YouTube’s continued growth is likely to lead to a change in industry leader soon, says Mirabaud Equity Research analyst Neil Campling.
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YouTube’s advertising revenues in the third quarter of last year was $ 7.2 billion, up 43 percent. more than in the same period a year earlier. At the same time, Netflix, whose quarterly revenue amounted to $ 7.5 billion, grew by 16%.
While YouTube has more users, Netflix led the way in terms of revenue thanks to its paid subscription model. But the continued growth of Google’s website could see “YouTube soon eclipse Netflix and become the new streaming king,” Campling said. In a note to investors, the analyst added that if YouTube were a standalone company, its value would be between $ 600 and $ 700 billion. Netflix’s current capitalization is $ 265 billion.
An element of YouTube’s dynamic growth is the ability to broadcast live, which Netflix does not offer. In 2020, the concert of rapper Travis Scott, who appeared in Fortnite, was broadcast via the website belonging to Google, which was watched by 140 million people. At the end of last year, over 142 million viewers watched in eight days as one of youtubers, MrBeast, played Netflix’s box-office series “Squid Game”. This material was the most watched movie of the American YouTuber.
Losing revenue priority to YouTube doesn’t mean Netflix is losing all of its perks. The service continues to work closely with leading Hollywood actors, and its productions receive numerous Oscar nominations. However, maintaining a competitive advantage turns out to be more and more difficult, especially when wealthy rivals such as Disney, Apple and Amazon also want to tear out a piece of this pie. According to forecasts, Netflix is to spend $ 14 billion this year. for content production. In 2025, this amount may increase to $ 19 billion.