According to reports, the rapidly growing YouTube is expected to replace Netflix in 2022 and become the largest streaming media service provider. Although YouTube is also regarded as a social media platform, the company’s emphasis on video content makes it a strong competitor to streaming media providers including Netflix.
Neil Campling, an analyst at Mirabaud Equity Research, said that although Netflix has long been the company with the highest revenue in the industry, YouTube’s continued growth is expected to surpass Netflix this year. YouTube’s third-quarter advertising revenue was US$7.2 billion, a year-on-year increase of 43%. At the same time, Netflix’s Q3 revenue was US$7.5 billion, a year-on-year increase of 16%.
The number of YouTube users has grown exponentially, and Netflix has earned revenue with its paid subscription model. But as YouTube continues to grow, Camplin said it will soon surpass Netflix and become the new king of streaming media. He added in a report to investors that if YouTube were an independent company, its value would be between US$600 billion and US$700 billion. Netflix’s market value is $265 billion.
Part of the reason for YouTube’s rapid growth may be that it can provide live streaming services that Netflix does not have. Mirabaud Equity Research said that rapper Travis Scott’s 2020 concert on the video game Fortnite was also streamed simultaneously on YouTube, with more than 140 million viewers. At the end of last year, more than 142 million people watched YouTube creator MrBeast’s re-produced Netflix Squid Game in 8 days, which is the most-watched show in the history of the latter.
Even if Netflix lags behind YouTube in revenue this year, it still has advantages, including close connections with Hollywood’s top talent and dozens of Oscar nominations. However, the cost of maintaining this level of competition in the content field is becoming more and more expensive. Competitors with strong financial resources such as Disney, Amazon and Apple have invested heavily in this field. Netflix expects to invest nearly 14 billion U.S. dollars in content this year, and this number may grow to 19 billion U.S. dollars by 2025.