The Strategy Behind Netflix Buying Up YouTube Creators (feat. Ben Relles)

0:00Ben Relles:Welcome to Creator Upload, your Creator Economy podcast. I am Joshua Cohen. And I am Ben Relles. Ben Relles, thanks so much for being in the building. Today, Lauren Schnipper is incommunicado. She's out and about, je ne sais quoi, who knows where or what she's up to. But Ben, we're lucky to have you back on the Creator Upload stage. Thanks so much for being with us. Thanks for having me, Josh. And you are, I mean, we've known each other for what, 20 years now, give or take? 20 years, yeah. And you, like myself, are an OG online video creator economy executive. You were one of the early YouTube creator, then at Next New Networks, then at YouTube and YouTube Originals.

0:41Ben Relles:Currently, you're the founder and CEO of Make Believe. I am stoked to talk to you all about what you're up to in Make Believe and more about what's going on in the AI and entertainment space. But first, there's a lot of news for us to get to. Let's do it. Netflix is doing a lot of deals with YouTube creators. So I just want to put this into context for everybody and give everyone a little bit of history. Netflix did its first deal with YouTube creators, arguably in 2016 with Colleen Ballinger, a.k.a. Miranda Sings. Did you ever watch Haters Back Off? Do you remember that show? Oh, yeah, definitely watched it.

1:14Yeah.

1:15Ben Relles:And this was a time when Netflix was not doing a lot of originals. And so you kind of watched all the originals Netflix was doing. So I remember people would figure out what they do and their relationship to what I did for a living was they had watched Taters Back Off on Netflix. Right, right. Yeah. At that point, there was like a few things. Grace Helbig had a show. There was a point where Fred had a movie, but there wasn't a lot that was like something where people would see billboards and know about it. After that, they didn't work a lot with creators, but then in 2020, Netflix brought on Cocomelon.

1:47Ben Relles:And they brought on part of Cocomelon's library and they produced some other programming with them. It was a huge boon and I think kind of like a proof of concept for Netflix that this YouTube native content could then convert to streaming minutes. I mean, there were a few different times while Cocomelon was on Netflix that it was one of, if not the, most viewed watched shows on the platform. That didn't last necessarily from the first half of 2023 to the second half of 2024. Cocomelon viewership on Netflix dropped 60 percent and Disney then picked up Cocomelon. But it still proved out this model that they're expanding to this day.

2:28Ben Relles:And so after Cocomelon 2020, the amazing digital circus, a huge breakout hit on YouTube, came to Netflix in October 2024. November 2024, there was the infamous Jake Paul Mike Tyson fight. Then in 2025, saw Miss Rachel, the Sidemen's Inside, Mark Rober and more come to the platform. And now in 2026 alone, you have huge deals with Salish Matter and Jordan Matter, a$100 million deal with Jay Shetty bringing his on-purpose podcast onto Netflix. Alan Chicken Chow and Alex Earle have done deals with Netflix. And just this month alone, the Stokes Twins, Rhett and Link, and Nick DiGiovanni have all announced deals with Netflix.

3:08Ben Relles:Now, the majority of these are that library programming, pre-existing programming is going to go onto Netflix and be viewable on that platform. And with some of them, though, they're going to create new kinds of programming. Like Nick DiGiovanni, his catalog is going to go onto Netflix or specific pieces of his catalog will be there. But then he's also developing a new podcast with Netflix that will presumably live by and large exclusively on that platform. So, Ben, as you have this history with YouTube and making originals for YouTube, what do you think of the current state of this entertainment ecosystem?

3:46Yeah, the last couple of weeks have been pretty remarkable in terms of the number of announcements. I think you covered them all, but there's a lot of different types of deals. There's like the library licensing. There's original shows. There's deals like Jay Shetty, where I think he's leaving YouTube entirely and going on Netflix. And then there's these like development deals like the Jordan Matter one where they're going to do multiple shows together. I mean, it's first of all, just bizarre. Having been at YouTube for so long, I was there 10 years turning on Netflix and just seeing what I consider YouTubers all over the screen.

4:18But it makes sense. I feel like perhaps Netflix felt like they're kind of losing the living room to YouTube. More and more people are watching these long form shows on YouTube. And that seems to be most of what they're buying, not just, you know, a creator's content. but actual shows that they feel like fit into the way other people watch Netflix shows. And then probably adjacent to that is all the podcasts they're putting on, which, you know, some of them are creator podcasts, some aren't, but also feels like, you know, another version of Netflix we haven't seen before.

4:48Ben Relles:I think Netflix has to do something else here. They're basically like their user base can't expand indefinitely. There's only so many people in the world. And so how do they increase the amount of time people are on the platform so they can maintain their subscribers, lower churn, and then also get more advertising revenue for ad-supported tiers. And they can probably do that more cheaply and at large with licensing this content basically from creators who made it on YouTube and bringing it over to their platform. I think it's interesting the consumption habits of different people. Like as a parent of young children, especially when they were younger, I remember going over to friends' houses and them not letting their kids watch YouTube but they would watch YouTubers on HBO Max or wherever else they were licensed and syndicated.

5:39Ben Relles:And it showed that there was this appetite for a little bit of a more curated catalog of content that can be in a little bit more of a screened environment. Right, not just curated but they knew that if they were there they'd only watch that and not end up bouncing around the rest of the platform. Right. And the algorithm can be a scary place for some people, especially parents. And then Netflix also has to figure out what to do with this YouTube issue. They used to not care about it before. Reed Hastings famously said, our biggest competitor is sleep. And now Ted Sarandos is praising slash disparaging YouTube at any given public speaking engagement.

6:22Ben Relles:And it's because YouTube has this biggest watch time in terms of streamers on U.S. televisions, bumping up to 12 or 13 percent to Netflix's like seven to nine percent. And also the revenue as well. So in 2025, YouTube pulled in over 60 billion dollars in total revenue. That's ads plus subscriptions, 40.4 billion dollars worth of advertising. and by contrast Netflix is guiding to hit 50 to 52 billion dollars in total revenue for all of 2026 so it makes YouTube not this minor player anymore this like cute component of Google it makes it a real powerhouse that's on the same level in terms of revenue and definitely watch time as Netflix so they have to figure out what to do you coming from YouTube and being a big part of that organization, especially the originals that were over there.

7:15Ben Relles:How does it make you feel or what do you think when Sarandos calls YouTube a quote farm league for entertainment? Let's see. I mean, I left YouTube four years ago, but I still kind of feel like, oh man, we're more than just the farm leagues. We've got the best talent in the world, even though it's not we anymore. But we even talked about that then that like originals, I was on the team from 2015 to about 2020. And we would talk about, well, if a creator has built their audience on YouTube and then they've got this big giant project they want to do. We want them to know that YouTube can be a place for that project.

7:48And that was a big part of the whole thesis was that, you know, whether it was like a big Markiplier interactive series or Liza Koshy scripted show or a Dude Perfect documentary, you know, you take these creators and their big projects can live on YouTube. I think the challenge is that the economics are tough when you're trying to do, you know, big movies, multi-million dollar projects on AVOD on YouTube. And it makes more sense behind a paywall. So initially with YouTube Red, which was on YouTube Premium, the idea was that you could do these shows with a big creator and then that would drive subscription.

8:22But I think once we went to AVOD, it was tough. One, because of the economics, but also because, you know, ultimately like we could do a big project, like a Dude Perfect documentary and their fans loved it and they loved it, but it didn't actually get more views than a regular Dude Perfect video. And so you're always balancing this version of it. Well, it needs to be big and something they could never do before, but it can't be so different that their fans aren't going to watch it and it's not going to work in the algorithm. And so, yeah, ultimately, I think YouTube is the greatest collection of creativity ever on any media.

8:54But when creators have like a movie they want to make, they're not going to be able to put that out for free on YouTube.

9:00Ben Relles:Do you think that like a version of YouTube originals would make more sense today, especially with just given there's more consumption of long form content, especially on televisions? Like would it work if you were at it today? I mean, if it would work today, I think a bigger factor than long form consumption on televisions is just that there's so many more YouTube premium subscribers. Like when we started YouTube Red, it was the same time that YouTube Red was a brand new service, no ads, downloads, original content. And so we were kind of challenged with, we put out a show, everybody would go subscribe to see the PewDiePie show, but it was one of only five shows.

9:38Now, because there's so many YouTube premium subscribers, I actually think you could build buzz on a show just from the existing subscribers, not using it as a way to get people onto the platform. And yeah, I mean, you know, I'm biased. I think YouTube originals could still totally work, but the era then that we were doing was like, how do we bring people in to a subscription service versus how do we have like extra content for these tens of millions of subscribers? Right. That era did have a lot of that, like that, that there was like a moment where go 90 and I'm trying to remember who else, Snap Originals, Facebook, watch YouTube.

10:15There was like a lot of social platforms doing original content. And then that went away. And now this feels like probably a more sustainable wave where a lot of these major platforms, not just Netflix, but Disney and Fox and others are figuring out who the right YouTube creators are to partner with that can pull off bigger projects.

10:35Ben Relles:And so do you see this as just like, this is the way the ecosystem is going to act for a while, where creators are going to get big on YouTube. They're going to have a lot of appeal. They're going to have this big library. Netflix is going to pick up their content for probably a fraction of the price they would pay for like the law and order catalog yeah and that's just the way it's going to operate or do you see youtube as trying to compete with netflix now too of creating more or facilitating more trying to have more of this yeah i don't want to say high quality but but this more netflixy type of programming traditional television type of programming on the platform right uh i guess i'll answer those separately i think there will probably be a lot more of these licensing deals.

11:19It makes sense. Like the Rhett and Link one, they make such a great show and now you can watch it somewhere else. I don't think that negatively impacts their YouTube show. I'm curious to see how things like the Jay Shetty deal play out because to me, the amazing thing about YouTube is you can have this dialogue with your audience and it feels very different when you can actually, you know, read comments, comment back, do all the things you can do on a social platform. And you lose all of that if you're like, I'm done with YouTube and everything I do now is going to be on Netflix. So that one to me feels, you know, maybe a little more TBD.

11:52And then the second question, YouTube, I mean, YouTube in general, definitely feels like more and more it's moved towards shows as a way for a channel to break through, not just in terms of like building audience. That was always the case. If you have like consistent formats, great way to like keep your audience knowing what's going to come next. But also when you're creating those shows, I think that resonates more with buyers like Netflix. Like this is something that fits into the way that they program. And I think advertisers also like plugging into shows. So I think, yeah, you'll see more and more long form shows on YouTube.

12:31Ben Relles:At a level that you would see on a Netflix or an HBO or another subscription service? Well, I guess it depends on what you mean by like at a level, like at a level of, you know, writing quality, what I want to watch. Like, yeah, there'll be some 25 minute shows on YouTube that I'd want to watch just as much. If you're saying at a level like production budgets, that's kind of what I was saying before. No, I don't think it makes sense for any channel except for like Mr. Beast and two or three more to spend hundreds of thousands of dollars on a video. That's not going to make sense for very many channels.

13:04but that said I still think like my my son happens to watch almost exclusively long-form YouTube content that is like his genre 30 to 60 minute long explainer videos and he'll text me I just watched this whole thing about how gambling works and how terrible FanDuel is he'll like go deep on a subject on YouTube in a way that I think is like the best some of the best parts about YouTube and that you don't find you know on a channel like Netflix and I guess YouTube has

13:33Ben Relles:kind of gotten into this more premium programming or at least facilitating more of this premium programming by spinning up this team that basically acts as a ad agency or a connector between brands and creators at the platform this was what their whole uh upfronts yeah presentation was about a brand cast colin samir just came up with it came out with a mini series brought to you by lexus l studio the official car on and samir yeah it's going to appear on their channel and then also be cut up into different types of media that then is going to be distributed all across youtube as advertisements i guess that's a way where it could be be in the future there could be some advertiser support of programming that feels big that's true in a way that some of these other programs do there's a handful of those the announcements that brandcast this year felt a little bit like to me our avod announcements from four or five years ago where it was like we're going to do a few big showcase you know shows that you know should kind of like show what's possible on youtube with these big youtube stars and traditional talent um i guess i'm saying more like i don't think you're suddenly going to see that scale into like dozens and hundreds of those types of formats i think that you know those are probably more unique and then yeah there's kind of this like middle ground, I guess, where you start to see more and more channels try to figure out what is going to be like our way to have a consistent show that continues to get better and better without needing that, you know, brand to sponsor.

15:11Cause if that brand goes away, the show disappears. So like I did happen to watch the Colin and Samir episode, the Lexus one, you know, it's like a five minute Samir learns to play guitar. They're on the road. I don't think that'll be a thing that they do with Lexus for years and years. It feels like, you know, a limited series with a brand, which is great. They do a lot of great stuff. But I think that's kind of different than, okay, this is like the new Colin and Samir show moving forward.

15:36Ben Relles:So a lot of interesting activity going on in the ecosystem now, but this does like, it's not quite the same as it was before. It feels more sustainable or something now. I think that's true. I mean, on the one hand, I feel like every year has been the year of the creator for the last 10 years. And on the other hand, I do actually think this year, It's like anybody listening to this podcast probably has seen all of the can posts about this year can felt different. Creators weren't just invited to the conversation. They were the conversation. And there's like a lot of that kind of, you know, discussion, not just a can, but like along the way over the past call or whatever it is, six, 12 months where it feels like there's been this turning point.

16:17And so Netflix is part of that. But you are seeing, you know, yeah, Disney and Fox and, you know, all of these different places where creators have the potential to do much bigger things than maybe they did before with traditional players. And then the separate part of it is like the movie part became such a big part of the story this year where, you know, I remember like probably when we were talking in 2008, you talk about, well, maybe one day YouTube is will be making movies. and then for whatever reason this was the year like obsession back rooms iron lungs suddenly there's these like three incredibly profitable movies that are really well done by really smart youtube creators and so that probably shifted a different part of the conversation around oh this can be new ip and it can be you know the types of real breakthrough projects that really aren't about like oh they have three million followers let's like convert those followers and more about the directors of those projects being so talented and just getting better and better at YouTube.

17:17So by the time they had a movie, it was the best thing in theaters. And Markiplier is probably both. His is different. Like he is massive and he's also really talented and he has like real strong fanship. So he got both. I think he got word of mouth on the movie and also his fans really showed up. But Backroom's an obsession. Like I don't think that's a story of, wow these people had so many YouTube fans that all showed up to the movie it was more like they got better and better on YouTube at storytelling and now they made the best

17:47Ben Relles:new movies this year you know I would agree with you on the obsession side I think the ability to hone your craft on YouTube and produce a lot of videos and get a lot of feedback leads to better videos and you're honing your craft faster and stronger in terms of Kane Parsons with back rooms I think it was both he's obviously very good at what he does but he also he didn't create the genre but he basically popularized the whole genre like right right that's true I wouldn't know what Backrooms is if I didn't know who Cain Parsons was maybe I would know it like I know Slenderman or just like a little bit like it's some weird Reddit meme but I wouldn't know it to the extent that I do and so I think like that feels different where he's obviously very good at what he does but he just had this like incredible IP that he helped manifest into mainstream culture.

18:39That's true. I get, yeah, I definitely agree with that. I think part of it is like, you know, he's not a YouTuber in the way a lot of people, YouTubers are like, the rules have kind of been the same forever. You got to, you know, get a good thumbnail and a good title. Right. The first few seconds have to be good and you have to be on a schedule and you have to be like half marketer, half YouTuber, because you're going to be like a full-time YouTuber. And Cain, I just listened to his interview on the town, but I kind of was aware of it from looking at his channel. Like he doesn't look at all at thumbnails.

19:04He doesn't, you know, post on a schedule. He's not like playing the game of how do I get as many YouTube views as possible. But it's really smart of him that he like developed all that buzz and community. I shouldn't even say smart of him. It's just cool that he like developed that on YouTube so that once the movie came out, you're right. There were people that were like super bought into the whole concept.

19:25Ben Relles:It's a great gig if you can get it. No, it's totally true. I mean, I was talking to Michael Stevens about this because Michael's the same way. Vsauce, he doesn't post on a schedule. He doesn't worry about thumbnails. And he's like, I love that that gives me the freedom to do whatever I want and not worry about every video. And is it going to get enough views? But there's very few channels that can do both, you know, have a career and also just post videos when they feel like it's ready and put the creative over everything else. Yeah. so a lot going on with Netflix and YouTube and in this space it's cool to see this year finally be the year of creators I think like this year might also be the year of AI filmmaking at least after talking to you uh you you brought my attention to this meme that is some guy with a smiley face being like oh I haven't seen as much AI online recently and then right with a dreaded face being like I haven't seen as much AI online recently that's right yeah I think it's the Lord What do the rings mean?

20:20Yeah.

20:21Ben Relles:And you're ingrained in this ecosystem. Like, what are you seeing here? And how is this different than how it's been before? Let's see. How's it different than before? Some of it is just the quality of the films have gotten to a point now where they can just stand on their own. It's not like, wow, AI did that. It's just the stuff looks so good that some of the videos that you're starting to see that are AI generated feel like the kind of short films that, you know, are the highest quality. And it still comes down to like the storytelling and the idea and everything else. But like you're no longer distracted by, oh, I can tell that's made by AI when you're looking at stuff by the people who are the best at doing this.

21:05In terms of what's different now, I mean, one way I think about it is like, you know, people talk a lot about AI slop and that's starting to fill our feeds. and I know every time I've done a podcast, every time I've listened to anything from anybody who worked at YouTube, they talk about how, you know, early YouTube and AI and the similarities. But I will say that like AI video is pretty new and there's not that many people that know how to do it. So when YouTube first started, it was such a small community of people that were making videos that I think it was kind of dismissed. They didn't, I don't think they used the word slop, but they were basically saying that.

21:42It was like people in their bedrooms, very early just figuring things out. And like we're at that stage, I think, with AI video. There's very few people who are, you know, putting in the time to make videos right now. And as a result, there's not, I think, like the volume to have enough of these like breakthrough videos. But the couple that I sent you, that one like living with a merman and the one that I showed you, Elder Boy, like those were two examples I saw on Monday night for the first time where I sent those out to people, nothing to do with it being AI, I just, I thought they were really great short videos.

22:16So I think the big thing is the quality of what you can produce now with these tools, the cost coming down, and the number of people that are actually playing with them.

22:27Ben Relles:Yeah, if you zoom out and squint, there's so many similarities between the creator ecosystem and the AI ecosystem. And it basically comes down to democratized tools of production and cost of distribution. Yes. And I don't mean to caveat it, but I gave a VidCon presentation in 2023. And I remember just feeling like this is a banger. YouTube democratize distribution. AI will democratize production quality. I just thought it sounded so good. But then like that has become the, you know, kind of closest. Yeah. Talk. I'm not saying I came up with it, but it felt like this, you know, fresh point. And, you know, the idea of YouTube at the time being this like small community where I think it felt like we were, you know, constantly trying to prove ourselves.

23:17Like we're not just, you know, YouTubers. We are going to be the future of content. And like we've been talking about on this podcast, 20 years later, I do think that kind of played out. When you're at these events with people who are all in on sort of AI filmmaking and the AI tools, you do get a similar sense of this is finally a way for people to make real projects, real movies, real stories without having to have enormous budgets. or stay on paraphrasing Jagger Waters, who just spoke at this event, that you don't have to stay in New York for 10 years as an assistant with barely anybody can afford to do until you finally get your break.