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Netflix is Evolutionary while YouTube is Revolutionary

YouTube and Netflix won the AVOD (Advertising Video on Demand) and SVOD (Subscription Video on Demand) wars, respectively, but the way they did so is wildly different.

A non-paying user isn’t as valuable as a paying subscriber, of course, but both have massive reach:

If YouTube were a country, with over 2 billion users per month, it would tower over China as the most populous one.

If Netflix were one, its 150M paying subscribers would rank it in the top 10.

In 2010, then Time Warner CEO Jeff Bewkes discounted Netflix’s threat by comparing it to the Albanian army. YouTube, for the longest time, was viewed as a pariah. Today, it’s the bell of the ball.

How did these two media/tech behemoths execute their plans for world domination?

Netflix is essentially an evolutionary innovation. It took the kind of programming we used to watch exclusively on television and movie theaters and brought it to the convenience of your home. But the shows and movies themselves were not different in any real way. Yes, binge-watching is a welcome change – but it’s evolutionary. Nothing changed dramatically.

YouTube, meanwhile, has unleashed revolutionary innovation. It has changed:

1. the kinds of programming we watch (i.e. vlogs);

2. the length of programming we watch (while total running time, or TRT, has increased steadily over the years, on average the length of a video uploaded to YouTube will be less than what we watch on TV/theaters);

3. the style of programming (i.e. direct to camera, jump cuts & quick editing style) we watch;

4. redefined the definition of quality and celebrity.

I could go on. But the biggest change isn’t in democratization of content, but of advertising – which is the force that directly or indirectly funds the vast majority of content we consume. Truview skippable ads wasn’t just the most scorched earth tactic in recent media history. With Truview, YouTube put the power of advertising in the consumer’s hands. No longer would viewers sit through “crappy ads,” they’d choose what they would or would not watch. That is revolutionary and means storytelling becomes the most important skill in media and marketing. Watch the Future of Media: Netflix vs YouTube here or below: