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> The figure, which totals the money generated through advertising on YouTube as well as paid subscriptions, far surpasses streaming rival Netflix's $45bn reven

> 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.

dolphinscorpion 9mo ago
Why would Netflix cost less to run when YT is mostly user generated content? Am I missing something? Both have to stream it
- aaronblohowiak 9mo ago
  Fewer unique video hours, YouTube pays residuals, vastly smaller library to personalize
- LiamPowell 9mo ago
  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 https://en.wikipedia.org/wiki/Open_Connect
  - danpalmer 9mo ago
    Google has its Global Cache: https://en.wikipedia.org/wiki/Google_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.
- zommah 9mo ago
  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
chii 9mo ago
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.
- ls612 9mo ago
  YouTube pays something like 55% of its revenue to creators which is effectively its cost of content.
  - chii 9mo ago
    > 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.
sowbug 9mo ago
> and their costs are also lower How so? Netflix has to license or produce all their content.

dolphinscorpion 9mo ago

Why would Netflix cost less to run when YT is mostly user generated content? Am I missing something? Both have to stream it

aaronblohowiak 9mo ago
Fewer unique video hours, YouTube pays residuals, vastly smaller library to personalize
LiamPowell 9mo ago
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 https://en.wikipedia.org/wiki/Open_Connect
- danpalmer 9mo ago
  Google has its Global Cache: https://en.wikipedia.org/wiki/Google_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.
zommah 9mo ago
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

chii 9mo ago

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.

ls612 9mo ago
YouTube pays something like 55% of its revenue to creators which is effectively its cost of content.
- chii 9mo ago
  > 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.

sowbug 9mo ago

> and their costs are also lower How so? Netflix has to license or produce all their content.