How Should Netflix Compete With YouTube?

Reed Hastings says Netflix should compete with YouTube by making more and better television shows and more and better movies, and by raising the creative bar until the work is gripping, real, and connecting.

In the 1950s and 1960s, movie viewing went way down because television suddenly became the new hot object. Movies got a lot better in the 1970s through a creator revolution in pacing and realism, then fought back and remained a substantial art form until the internet, or until COVID. YouTube is the television in that example, and Netflix is the movies. The response is to push to be ever more gripping and to do the work incredibly well.

YouTube shares about 60% of revenue with creators, so the content is not free, but YouTube does not take responsibility for making it or for the risk. Netflix has tried podcasts and shorter form content and has not gotten into news, because entertainment has very different brand properties. The aim is to be where people relax. The core brand property is thrilling: Netflix can be distrusted and disliked, but it can never be boring, because an entertainment brand has to be something people cannot ignore.