Inside the Stream - Is Netflix Trying to YouTube-ify Itself?

Amid viewership challenges, Netflix continues to diversify into creator content, video podcasts, and more. Is Netflix trying to YouTube-ify itself, and if so, will it work?

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The data suggest that Netflix has an engagement problem. This problem was on investors’ minds when they interpreted Netflix’s bid for WBD as an admission that it was out of ideas for how to fix it.

Data from Lucas Shaw at Bloomberg suggests that second seasons of popular shows on Netflix often lose half or more of their audience. I think the problem with second seasons could be due to Netflix’s release model, where it drops all the episodes at once. Will thinks Netflix’s ferocious release cadence means new shows overwhelm previous hits, blunting the appeal of new seasons of those hits.

Netflix has been poaching YouTube stars and signing them up to exclusive deals. The company has stated that it views YouTube as a “farm league” from which it can cherry-pick creative talent. Perhaps it thinks the creators can help out with the engagement problem.

Getting YouTube creators to produce exclusive content for Netflix will not stop them from creating new content for YouTube. That means it is unlikely to permanently move the creator’s audience to Netflix. In fact, Netflix content could drive new fans to YouTube to seek more of the creator’s content.