Netflix earnings show that YouTube is the streamer to fear

This was beaten home on Thursday, when Netflix reported the second quarter results. The earnings per share increased by 47%. And according to Nielsen, the share of USA viewers was 8.3% – twice as much as all Disney channels combine.

Problem: Youtube’s share in USA viewers increased from 9.9% to 12.8% compared to the previous year. Netflix follows a different model built on the content and advertising created by the user when creating most of its content and primarily based on subscription.

Netflix increasingly increasingly square against Youtube, pennants compete with each other.

Analysts forced Netflix management about the YouTube dilemma during Netflix’s call for earnings. Lightshed Partners’ Rich Greenfield asked the “stagnation ın of its market share. In response, Netflix joint CEO Ted Sarandos tried to emphasize that the company has a very stable market share, despite the increase in “TV -based flow services çocuks, which excludes Youtube.

These two pennants come to the audience in different ways. Netflix’s income is largely from subscription sales and youtube is primarily an advertising -based service. However, each enters the other’s business model. Netflix successfully launched a less expensive ad layer of advertising for offers. Youtube is now receiving significant subscription revenue from Youtbetv, valuable NFL market ticket package and flow cable channels in other services.

Finance is even more clues in favor of Youtube. Netflix sold $ 39 billion last year and on Thursday, 2025 income guidance increased the midpoint of income guidance to 45 billion dollars annually. According to Melissa Otto, President of Alpha Research in S&P Global, the expectations of analysts are for about one -third of advertising.

These are all pale compared to what happened on YouTube. Analyst Laura Martin from Needham estimates that Youtube revenue was $ 58 billion in 2024 and that it would be 70 billion dollars in 2025 and that 30 billion dollars will come from subscriptions. It predicts that a YouTube alone will have a market value of $ 720 billion. Netflix has a market value of $ 556 billion.

Youtube captured a young demographic and became the number 1 as it gets older to these audiences. In doing so, he broke down that people were “television ve and how they thought. This gives you a great financial advantage to YouTube. In the second quarter, 52% of Netflix’s costs were content expenses. Youtube transfer these costs to its creators, maintain relatively existence light, and increasing profit margins.

This means that it does not have the content on YouTube’s platform, which opens another space for Netflix to pass to its opponent’s area. Netflix now uses Youtube as a programming source that emerged in a call for a Thursday.

“We want to do business with the best advertising elements on the planet regardless of where they come from, Sarand Sarandos said. “Some are only the creators distributed to social media platforms…. Extraordinary distribution for these creators doing great works, making the desired money… And we have a hungry audience waiting to have fun.”

Ms. Rachel, a children’s entertainer, has a very popular YouTube channel. And now in the first half of 2025, there is a Netflix show that received 53 million hours of monitoring.

We still don’t know how this movie will end. As Youtube broke the TV ten years ago, Tiktok, who has a younger demographic and represents another way to watch television, can be broken. If young people come to see television as watching a short video after a short video on their phones, Tiktok’s “infinite shift” can be the final winner.

Write to Adam Levine at Adam.levine@barrons.com