Netflix has secured rights to shows from three major YouTube brands in a single week. Alan Chikin Chow is bringing his series Alan’s Universe to the platform, chef Nick DiGiovanni is bringing his entire catalogue, and the studio Mythical Entertainment is bringing Good Mythical Morning, Mythical Kitchen and Last Meals. According to Bloomberg’s Screentime newsletter, the wave continues with Ms. Rachel, Mark Rober, Salish and Jordan Matter, Danny Go!, Hot Ones and the Stokes Twins already on board. The channels of the signed creators have more than 500 million subscribers on YouTube combined.
Paying for videos that already exist
The contracts follow the same pattern. Netflix does not want creators to leave YouTube, as that would be prohibitively expensive. According to Bloomberg, Netflix pays several million dollars a year for co-exclusive rights, and the videos appear on both platforms at the same time. Mythical starts on 7 September and will upload its archive alongside new episodes. Ms. Rachel is re-editing her YouTube episodes into a format for Netflix, while Rober is developing an original series for the streamer.
The strategy is paying off. According to Netflix’s first-half viewing report, Ms. Rachel, with 37.3 million views, ranked among the platform’s ten most-watched titles, ahead of new seasons of The Night Agent and The Lincoln Lawyer. Danny Go! and Salish and Jordan Matter also made the top 30. The whole bundle of YouTube shows costs about as much as a single season of a prestige drama. Purchases are led by John Derderian, Netflix’s head of children’s and family content, who is negotiating with other channels. According to Bloomberg, Disney, Paramount and Comcast are turning to the creators that Netflix has not yet signed.
YouTube is weighing a response for the first time
Publicly, YouTube chief Neal Mohan remains calm. Creators keep telling him that “no matter what they look to do, they understand that YouTube is their home”, he told The New York Times earlier this year. According to Bloomberg’s sources, however, YouTube is weighing behind closed doors whether it needs to act. When stars such as MrBeast or Rober make shows for streamers, the impression grows that YouTube is a farm from which top creators are promoted to Hollywood’s first division.
Some major creators have reportedly asked YouTube to pay them for turning down Netflix offers, according to Bloomberg. YouTube has refused. It sticks with a model in which creators keep 55% of the ad revenue, and it will not pay extra for videos that are already on the platform. However, it has started indirectly financing some shows by redirecting advertising money, and it buys exclusives such as NFL Sunday Ticket or the Oscars broadcast. It has also responded to competitors before. It answered TikTok with Shorts, and it started a battle for game streamers in response to Twitch’s growth.
Creators are winning
Netflix chief Ted Sarandos frames the purchases as the next step in expanding the programme, after stand-up, films and local series. “These expansions are evolutionary, not revolutionary,” he said last week. Netflix is gradually buying up entire layers of entertainment, from games based on its own hits to post-production AI. YouTube will not catch up on volume, since it takes in more videos in a day than Netflix does in a year, and it is free. Nor will YouTube catch up with Netflix on premium content, for which the streamer charges $20 a month. Each has its own path.
Creators have the surest return from the whole tug-of-war. They are paid extra for content they already make, and the world’s two largest video platforms promote it at the same time. Two concerns remain: that YouTube will punish them with worse access to advertising opportunities, and that later Netflix signings will get lost in the catalogue. For now, though, the rule holds: whoever sells the same videos twice earns twice.
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