Co-chiefs talk up ‘breeding ground’ of creatives on social media who can ’graduate’ to streaming giant, as Q4 subs surge
Netflix wants to tap into YouTube’s talent “breeding ground” to cultivate the next generation of creatives for its own “longer-form storytelling” ecosystem, its co-chief execs have indicated.
The streamer revealed record quarterly subscriber growth in its year-end financial results yesterday, and in an analyst call following the results, Ted Sarandos and Greg Peters said that talent could “graduate to” Netflix from social media services, with Peters noting creatives from other arenas such as theatre might also look to end up on the platform.
When asked about competing with the likes of YouTube for engagement, Sarandos noted that Netflix’s core business is in the “enduring… professional longer-form storytelling” and that will remain the focus.
He added that tabs are being kept on the popularity of social media platforms and how Netflix can exploit that.
“Our goal here is to entertain all audiences, including younger audiences who may be watching disproportionately more short-form content. Now, the beauty is that those folks all love film and TV shows as well.
“As eyeballs get pulled into other places, we definitely want to be there for them as well,” he said. “I do find that the short-form services also are a great breeding ground for new storytellers.”
Sarandos alluded to YouTuber Ms. Rachel, whose educational videos are the inspiration for a four-episode Netflix series, announced last week. The streamer also struck a deal in late November for a second series of The Sidemen’s show Inside, after the first series debuted on YouTube.
He also talked up Netflix’s ability to super-size other series that began life on YouTube such as kids brand Cocomelon, travel doc Somebody Feed Phil and Karate Kid spin-off drama Cobra Kai – although the latter was already a long-form series from the scripted slate of the abandoned YouTube Premium originals offering.
“We also have got a rich history of finding projects in other places and having them up the game and be very successful on Netflix,” he continued. “The work we had to do there is to win over audiences with programming that they love.
“We have to outcompete for those moments of entertainment truth.”
Peters underscored Netflix’s “specific and differentiated role” in the content ecosystem and its ability to back creatives with financial clout to super-charge projects.
“We know that our creative partners need someone that can participate in investing in those to share the risk that’s inherent in bringing those stories to life,” he said. “So, we want to double down on supporting that part of the ecosystem.
“Whether it’s being a place where those great storytellers that Ted mentioned can graduate to, from places like YouTube or in the theatre or any other place that they come from, we know that consumers want a spot to enjoy great movies and TV shows.”
Sarandos outlines engagement ambitions
In previous earnings calls, Netflix bosses have signalled their intent to improve its share of TV viewership in the US: Nielsen data from its most recent monthly report, The Gauge, has YouTube at 11.1% and Netflix at 8.5% among streamers in December.
Engagement is one of Netflix’s key focuses – alongside revenue and profit – and was described by leaders in the letter to shareholders as the “best proxy for customer satisfaction”.
Peters rejected a notion that the record 19m net subscriber additions in Q4 was solely due to its live sports events – the Jake Paul vs Mike Tyson boxing match and the Christmas Day NFL broadcastings – noting that “no single title really drives the majority of our acquisition or engagement”.
Picking up on the point, Sarandos said Netflix members consumed 200bn hours on streaming in 2024 with the average members watching two hours a day.
“We’ve still got plenty of work to do to grow that,” Sarandos warned. “That’s what the team is very highly focused on. [Chief content officer] Bela [Bajaria] and her team are really programming into those moments of breadth and quality of trying to meet people where they are, finding something for everybody and something for every mood, in every language in every part of the world.”
Commenting on the results, Costanza Barrai, senior analyst at Broadcast parent company GlobalData Media IC, said: “Globally, SVoD, YouTube and short-form social video are all more watched than linear TV.
“36% of people globally spend 1-3 hrs on YouTube per week, and more than half spend 4 or more hours, making it more popular than free linear TV, despite traditional linear TV remaining the most popular media in France, Japan, Germany, Italy, the UK, and Australia.”
Record gains put subscriber reporting decision in spotlight
Netflix’s 2024 full-year results were notable for the fact it marked the last time the streamer reports quarterly subs additions.
However, in adding a record amount in Q4 and over the year (41m in total) - in addition to shares rising almost 15% in pre-market trading, the numbers are indicative of Netflix’s market-leading position in the streaming landscape.
Besides surpassing the 300m global subscriber mark, it topped 100m in EMEA for the first time, growing net subscribers by 130% quarter-on-quarter from 2.17m additions to 5m.
Analysis from GlobalData suggests the recent growth in the region is driven by the Middle East and Africa, according to GD’s consumer survey, collating 60,000 respondents across 30 global markets to uncover consumer insights into media consumption, subscription behaviour and content preferences.
GlobalData Media IC’s Barrai noted the streaming giant “has invested heavily in EMEA” in adding +12.2m subscribers in the region over the last year and “overtaking those recorded in the US and Canada since 2023”.
She added: “Given the maturity of Netflix in Western and Central European markets, most of the recent growth was driven by Middle East and Africa. 88% of people across the Middle East and Africa subscribe to Netflix, highest than any other region. In addition, MENA’s growth rate from 2020-2024 was double that of Europe’s.
“The next territory to look out for for penetration is APAC, but also expect more local production.”
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