How YouTube accidentally beat Netflix

0:00The Colin and Samir Show is supported by Microsoft Copilot. This is something I thought I would never say, but can I share with you my favorite prompt? I mean, like when you say something like that, I have to say yes. Were you going to say no? No, but okay. Just let me hear it. So when I'm researching for a guest or I need to know a lot about a subject matter, I say, make me a podcast about. And when you do that, you're going to get a short blurb about that subject. And then in like two minutes, you're going to get a podcast. So check this out. Welcome to Co-Pilot Podcasts. Picture this, a guy working the front desk at a hotel, making lacrosse videos in his spare time, completely unaware that he's about to become one of the most influential voices in the creator economy.

0:38Today, we're diving into the remarkable story of Colin Rosenblum. Wow. Did you pay it to say that? That's crazy. That's very kind. It's crazy, but it's my favorite way to learn about a subject matter. I'm learning about so much more now that I can turn this research into like a seven minute podcast that I can listen to just when I'm walking. Did you tell it that I worked at the front desk of a hotel? Dude, the prompt is just make me a podcast about Colin from Colin and Samir. That's it. I may be biased, but I'm on the edge of my seat. I'm hooked. So if you guys haven't checked out Copilot, check it out.

1:10Try it for your research. Try it for getting variations of your titles, your ideas. It's one of my favorite tools on the internet right now for our creativity. And now back to the show. When YouTube launched, I don't think any of us could have imagined that all of our short clips and videos could replace TV and even dethrone Netflix. YouTube is now the biggest streamer in the world. YouTube is 10 % of viewing. Netflix is 8.4. Bigger than Amazon Prime Video, bigger than Hulu. YouTube is a juggernaut. In this episode, we'll explain how it happened and we'll hear what a Hollywood insider thinks about this battle between YouTube and Netflix.

1:50Yeah, I have some strong feelings on that. Lastly, we'll share our predictions and our takes on what this all means for creators in the next chapter of entertainment. And if you make it to the deep end, you'll hear from our showrunner, Hot Take Dave. What was that? What is that? What is that? This is Hot Take Dave's second appearance on the show. Could be his last. Dave. Stop it. I don't know why I'm doing it. All right, let's get into it.

2:18Samir, I want to start this episode with a video that was uploaded to the Netflix Investors Relations YouTube channel. Is that a real YouTube channel? It's a real YouTube channel. It has 12 ,000 views, this video that I'm talking about. And it is their Q2 2024 earnings report. Now this is when they take questions from shareholders. One of the questions that they get is about YouTube specifically. Does Netflix see YouTube as a competitor? And if so, what are they planning to do about it? Now, we clearly do compete with YouTube in certain segments of their business, and we certainly compete with them for time and attention.

2:53But our services also feed each other really well. Our teasers and trailers and behind the scenes clips and all those kind of things are incredibly popular on YouTube. I think it's also important to note that Netflix fulfills an important and differentiated need for both consumers who really want, you know, they want amazing spectacle movies and TV shows, you know, shows like Stranger Things or Wednesday. And it's really hard to imagine how that kind of big creative bet would happen and be possible within YouTube's model. So the answer that they give is very yes and no. Yes, sure, it's competitive because we are competing for attention on TV specifically, like there's no doubt.

3:33They also say it's not competitive because they don't think YouTube would be able to have content like theirs, like premium expensive content like some of their shows, like Stranger Things, like Wednesday, because it doesn't fit in YouTube's model. But at the end of the day, when you look at these numbers from the Nielsen Report, when you look at the sheer fact that 10 % of streaming watch hours are given to YouTube and people are going to YouTube instead of Netflix for that, that's significant. And what's even more interesting to me is that when you look at their business models, they are colliding.

4:07Like Netflix is subscriptions. That's their business. YouTube, it's advertising. But Netflix added an advertising tier. YouTube has subscriptions with YouTube Music and YouTube Premium. And in a way, they are in an effort to become each other. So they really are very competitive, but they're so different in the way that they acquire, produce, and release content. So all of this was pretty surprising for me because in 2012, when we first started, or 2011 when we first started on YouTube, this was like the thesis, right? We would go into rooms and talk about how like, this is the modernization of TV.

4:46This is, YouTube is the next wave of entertainment. But it did actually feel really far away at that point. And to hear YouTube come up in Netflix's earnings call this much and to be really defined as a true competitor to Netflix does feel like a moment where I'm like, oh wow, this really happened. Yeah, like, oh, you're talking about us? You're talking about us. Like, that's the weird thing is like, they're talking about YouTube, the platform, but what they're talking about is all of us as creators. Like we're the ones occupying that time on connected TV. And that to me was like one of the most interesting realizations this week of like, oh my God, this really happened.

5:25And how did it happen? Like how did this actually happen? And moving forward, will YouTube continue to be dominant and become more like Netflix but still stay YouTube? Or will Netflix overtake YouTube and begin to look more like YouTube? So that's what we wanted to explore and find out. And I want to play for all of you our conversation with Scott Gimple, who was the showrunner of The Walking Dead for many years. He's a Hollywood writer, Hollywood producer, a true Hollywood insider who has a super unique take and perspective on YouTubers. With you as a, you know, as a Hollywood showrunner, when you think about the streaming war between these two playing out, do you consider Netflix and YouTube competitors?

6:16And how do you think that war plays out over the next coming years? I think YouTube has an incredible advantage. I come from week-to-week television. And what's fascinating to me is I feel YouTube has taken that space. That was the thing. I was consuming these videos and then I would have to wait a week or more, depending on the creator, but that creates a relationship that, that creates a ritual that creates a way to frame your week. What Ryan Trahan did with that, like one video a day for like 30 days. I mean, he got me hooked where like at the end of it, I was so bummed that I wasn't starting my morning with that.

7:05It's the consistency that creates the relationship with the audience that makes it, I don't know, makes it something that they want in their lives perpetually. And it just feels that YouTube has taken over that space from TV a little bit, that weekly relationship. And, you know, that fascinates me. It also has me hooked. When I watched The Bear season three, I'm a big fan of The Bear, but I realized when they dropped season three in a binge model, you know, normally if it's week to week, I have so many questions left unanswered as a viewer that I can't wait. And those questions get bigger and bigger the more that that week goes on.

7:48And I felt like with The Bear Season 3, the questions, they were left unanswered, but then they were so quickly answered. And it didn't generate the same fandom as some of the week-to-week experiences that I've had. I think because that gap in terms of questions left unanswered gets answered so quickly. And I get accustomed to that. The basis of the bear is the basis of television in my mind, which in some ways is the basis of YouTube. It's characters. Granted, on YouTube, it's real people, but on TV, it's characters with which the audience wants to spend time with. They want them to be in their lives.

8:27And a lot of times they're people that they wish were at their school or their workplace or their places of worship. But to have them as a regular presence in their lives on those shows or on YouTube, that's important to them. Now, with the binge model, though, I think the other thing, and this isn't a secret to anybody, but the community goes out the window in some way. You know, when those revelations are shared at the exact same time and they're building and they're building in the building, a finale was such a big community event. And like for years, it was when you would gather up. And here's a question I have.

9:13I feel it's like a naive question that I don't know. I don't know why I don't know the answer to it. And I've asked some people and I still don't understand. why don't the streamers program weeks like meaning this you know stranger things will be out wednesdays at eight why don't they build those appointments for people and then people can watch it whenever they want if they miss the appointment to me that seems like a way to potentially get that live community again maybe people at netflix will watch this episode and start to program it that way. Send it to the show business committee, Scott.

9:51It's a compelling case. You know them, right? Show business committee is so, they're so rough, man. Have you started to think in your head at all about like what type of creative you could put on YouTube? Or is that a conversation amongst your cohort, your peers at all? Because one of the points was that in the Netflix earnings call was that like, it's hard to imagine such a large creative bet being placed on YouTube. But is there a certain conversation amongst showrunners or creatives in Hollywood that's like, hey, maybe we could put a pretty big creative bet over there? On the strike lines, it was a constant conversation.

10:33And I think about it all the time because there's fewer and fewer companies. There's less and less distribution. But it seems within YouTube, the aesthetic of YouTube or just the expectations of YouTube, it'd be difficult. But then, you know, Wesley Wang and what he did, you know, Wesley made that short. And now he's in a very, very conventional situation with Sony. Is there a world where the kind of creativity that was applied to both the content and making that short was also applied into the next step. I wonder if a middle ground will emerge. The way we're looking at it is there's Netflix, it's premium, it's bought, it's planned, it's not necessarily week to week.

11:24And then there's YouTube, which is totally democratic. Anyone can upload. I think about as Netflix wants to continue to compete with YouTube, their live events are already a little more like lowbrow. They're looking, obviously, to compete from an advertising perspective. does Netflix open up a creator plus program or something, which is a bit of an in-between, where they're licensing work from YouTube creators that is licensable. They are almost like YouTube Originals did. They are funding some projects. And then they're tapping into the indie market as well and sort of bringing people to this middle ground that's a part of Netflix's offering.

12:05I don't know if it really worked for YouTube because YouTube operates so differently where you can't really just drop a premium series of 10 episodes and see what happens. You have to have distribution built over time. But Netflix kind of has that and they have the money to spend. That's sort of my prediction and my thought is that it goes that way. I mean, the weird case study that we have is Cobra Kai. Right. I mean, it started on YouTube Red and it just didn't take hold. And then it went over to Netflix and it's a huge hit. you know what we were talking about is there some sort of hybrid between netflix and youtube is is that coming or is somebody going to figure out a way to tell stories on youtube that is viable from an economic standpoint that also captures the audience's attention within you know the youtube marketplace, which is endless, like, is there another way?

13:04I was going to ask, like, with your experience in week-to-week television and with shows like ours starting to occupy that space, what advice would you give to us and creators like us who are producing week-to-week on, like, how to be successful at it? Like, the next crop of creatives and storytellers are turning to YouTube first. They are producing content that although feels completely new and different, it has its roots in week-to-week television. We see a lot of old MTV formats showing up on YouTube now. And we're starting to see stuff that used to work when I was a kid watching TV that's now working on YouTube.

13:48So I'm curious if you stepped into the shoes of being the showrunner for the Colin and Samir show or another YouTube channel that's week to week. How do you build that level of like fan community? How do you build appointment viewing? Because we are in the ads business, just like any other TV show. The difference is we are also the network. So we have to operate like a network. I mean, I think the number one thing that you're doing, and I also know the mental and physical costs it takes. So I say this with a grain of salt, but the week to week consistency is everything. That is the thing where you look at 200 people working on a television show and maybe there's a reason why, because that's how you can do an episode a week.

14:35That's how you can have that consistency. It isn't on like four people to do that. And that's where you're like, oh, there's a reason for that because people would burn out and barely be able to make it even with the technology available at their fingertips like a team is a big thing and i'll say when i did the ones who live that was the last thing i show ran i oversee all the shows that was the rick and michonne show that came out this year um you know we it was six episodes so we did it in the way that you know sort of modern television does. All the writers are on, you write it, and then they're gone.

15:15And I'm the last one left. So I have my showrunner job, and I have rewriting to do, and I'm prepping, and I'm shooting. And back when I did 16 episodes, I had a whole staff of writers the entire time who were writer producers, in fact. And they were on set handling the things while I was doing other things. for six episodes it all fell to me and it was a very very different experience i thought 80 episodes of the walking dead was easier than six episodes on my own wow that's really interesting that is a good that's a really good point so i i can say like oh be consistent yeah i i do realize that's maybe an impractical suggestion so this episode is brought to you by LifeLock.

16:04When you visit the doctor, you probably hand over your insurance, your ID, and contact details. It's just one of the many places that has your personal info. And if any of them accidentally expose it, you could be at risk for identity theft. LifeLock monitors millions of data points a second. If you become a victim, they'll fix it, guaranteed, or your money back. Save up to 40 % your first year at lifelock.com slash podcast. All right. There's a lot to unpack there from our conversation with Scott. I found it to be so interesting to talk to someone who has spent their whole life in traditional, conventional Hollywood.

16:41Talk to them about YouTube. And hear him say, the Penny Series had me hooked. Yeah. It's crazy to hear him talk about that. But I will say that the first thing that made me like step back was his comparison of YouTube to week to week television. And when he said that, I hadn't really thought about my experience of week to week television, like remembering so deeply in high school when a bunch of us would get together on Sunday nights and we'd watch Entourage. Yeah. And that was like, that framed the week. Like he said, that was the group of characters that we would all, they were part of our life.

17:20And because it was week to week, it allowed us to like eventize this thing and get together. And like, they were such big parts of our lives, those characters. And I'm sure that was the same thing with friends and the same thing with Seinfeld and the same thing with The Office when it was on week to week. It wasn't spectacle. It was hanging out with friends. That's what it felt like, right? Both your own friends as you would watch with them and the friends that you've felt like you've made through the characters that you know so well. And I had never thought that YouTube had replaced that, like had stepped into that space.

17:53Yeah. And the impact of binge TV or binge watching on this concept of like week-to-week TV, where when it's this binge model, it's like, it just kind of comes out. People watch it at their own pace. And you and I could be watching totally different things. But when we were watching Entourage and like everyone in our age group was watching Entourage, you were in New Jersey watching the same shows as me. Yeah. With your friends. And I was in LA, like there was, there was a monoculture that was developing and that, that seems to be a consistent theme. But I thought about like, who is doing YouTube in a way that is week to week TV.

18:31And it's not necessarily just shows that are, you know, literally week to week. I was thinking about like Marques Brownlee, MKBHD. It's so rare to experience a week without an MKBHD upload. Yeah. As an audience member, you always know there's another one coming out. You think about Rhett and Link, like when they do their show and it's on like every morning, people definitely wake up and watch Good Mythical Morning. And their ones, like there's this famous quote from our interview with them that we cite all the time in our office. In 10 years, you haven't really missed an upload. Because it was a show.

19:08Since when are you watching a show? and the showrunner tweets out, oh, I'm not getting one out this week. Has South Park ever missed? We don't miss. It's a show. And they think about that. It made me think a lot about the question that we always get of, should you focus on quality or should you focus on quantity when it comes to being a creator? And I think it's maybe reframing it. Of course, you always want to have quality, but it's more about consistency than it is just quantity. that there is so much value to just being there in someone's life on a consistent basis and that that's what streamers have given up they could have had that, it's a model from TV Scott says, he's like, why don't they do that?

19:54right, but they just don't consistency on YouTube requires building an audience which dictates the creative for you, as a storyteller all of a sudden to the easiest way to be consistent is to create basically what I'm going to call editorial content, content that is less storytelling and more talking about storytelling. And to me, the question that he was asking is, can YouTube or Netflix incentivize young creative filmmakers to not have to build an audience and to build just great story? so that that brings yeah because he does he asked the question of like could wesley wang after releasing a trailer for something and now garnering over seven million views um instead of selling it to sony is there another version of that where he can just make that show and in the same way that he made it on youtube right yeah and i think one of the questions that i asked myself as i you know experienced this whole conversation of youtube and Netflix.

21:01One thing that I think is interesting to discuss is like, how much of YouTube's success is about the creators and our work that we put out on the platform and how much of its success is based on discovery and the algorithm. YouTube's discovery mechanisms would have to really prioritize net new shows or it'd have to change a bit because it is a very personalized platform for everyone. So if a new filmmaker puts something out and puts out a 10-episode series, it's very hard to get into the hands of the whole community. Yeah, I would say, on the other end of that spectrum, you have Rhett and Link who are putting out what they're calling basically a TV show, Wonderhole, on their Rhett and Link channel.

21:47But they've built up distribution over years so that they can do that. If you are not them, let's take another example, Max Joseph. Max Joseph released a whole series on happiness and is releasing it right now on his YouTube channel. But he's not nearly as consistent as like a Rhett and Link or even a UNI. If we wanted to make something like really premium that felt more like TV and release it, he's doing it and he's having some success doing it, but he's at a disadvantage because he hasn't been someone who uploads regularly every single week. Is there a place for someone like him and a series like his who's not consistent every week on YouTube to come to YouTube, put something out, 10 episodes, and still get it discovered.

22:30Or is that something that Netflix does? Yeah. For creators, right? Like, is there, with Netflix adding an ad tier, they need more content, they need more audience, does Netflix develop something that opens the door? I think so. I think there's no doubt that that's the future. As they need to grab more content for their ad tier, it just makes perfect sense to me. And it's also a model they already do. Like they pay for content they didn't produce themselves. Seinfeld is on Netflix. It's 30 years old. It's not a strange model. Like traditional Hollywood understands the licensing model. But I also think they could green light stuff that has not been made yet.

23:09I think it has to be new content because if you look at like the, again, the - I don't think it has to be new. You don't think it has to be new content? Absolutely not. You don't think Michelle Kare's Challenge Accepted could just show up for five years on Netflix in the ad tier? Yeah, it could. It could. It totally could. Why not? But I think when we're talking about this week-to-week TV, does Netflix ever get into that? Does Netflix ever bring that back? There was a bit of it. There is a bit of that with live events, appointment viewing, stuff like that. But if they're going to get into that, I do think they need originals or a place for us to create in that environment.

23:47I think this makes a lot more sense for YouTube given the nature of the content and the creators. YouTube should have a channel where you don't have to actually click and search or choose a video. They should have multiple channels of broadcasted content from their premium creators where there's just videos playing like a TV channel, but a TV channels, a series of TV channels within the platform itself where you can passively sit back on your couch and go, what's on YouTube today? You know, that is interesting. And I want to, I do like that because I was thinking about this in the context of the Olympics right now.

24:24Olympics is going on. I'm a huge Olympics fan, by the way. This guy's a big Olympics fan. Olympics is going on right now. I turn on YouTube TV and there's this like quad box of four events to watch. Yeah. And I'm overwhelmed. Same. And I look at it, I'm like, but what are we all watching? And the same concept of like the week-to-week TV where there's a collective viewing experience. I remember watching the Olympics and going, what's on NBC? That's what we're all watching. That's the event. and all of the world or all of America is watching this one event. And that's fun because then we're all having a collective experience.

24:58But when you have this amount of optionality, over time, it is going to get increasingly more overwhelming. And you look at like Netflix's successes in live programming. What's interesting about it is that it reduces the optionality. That when you log into Netflix the night of the roast of Tom Brady, that's the thing. And I think over time, And when you look at YouTube and you look at Netflix and what they're trying to compete towards, it's going to be the competition for those moments. The moments where you turn on YouTube and you're like, oh, this is the thing that we're watching. Or this is the thing we're watching on Netflix.

25:32And I think in order for them to both compete in the broader conversation and entertainment over long periods of time, it's going to be those tentpole things that we all know we're watching. So the idea around like a YouTube stream of premium content is pretty interesting. I do think that YouTube's long-term strategy is we want people to be talking about a certain thing, but we have the creators that you're going to actually go watch talking about that thing. So you're not going to talk about that thing physically with anybody, or maybe you will, but maybe you won't. But you're going to come to our platform to watch our handful of very famous creators talk about that thing.

26:14And I don't know if Netflix can create that roster for themselves. I think unless you have a truly democratic place or where you really lower the barrier of entry for what's allowed to go on Netflix, I agree. You're not going to get that culture of people talking in real time about cultural events. And on Netflix, you don't have comments. Like there's no real interactivity there. So, you know, when you look at YouTube creators and modern creators, like it's not odd right now to have a premium tier content offering, right? So Second Try, Try Guys launched Second Try. They have shows on Second Try.

26:53Side Plus, the Sidemen are a great example of week-to-week TV and then premium offering with Side Plus. And you look at like Nebula. Nebula is a creator-owned streaming platform. And it has shows like Jetlag and other cool, like interesting shows. There's 680 ,000 subscribers to that. And all of what's happening is like, you know, these creators and modern media companies, independent media companies are able to produce formats at 22 plus minutes that are 10 episodes, right? and that's starting to fit into a model that Hollywood can recognize and maybe a Netflix can recognize and go like, should we just buy Nebula, Dropout, the Second Try library, the Side Plus library?