Deepwater Asset Management co-founder Gene Munster weighed in on whether Alphabet, Inc. GOOGL GOOG-owned YouTube is currently the king of content amid a proliferation of online streaming.
Users flocking to YouTube have put Hollywood and streaming giant Netflix, Inc. NFLX in a challenging position, as per Munster in an interview with CNBC. The total hours viewed on YouTube surpass those on Netflix by a factor of four, with 60 billion hours per month on YouTube compared to 15 billion hours on Netflix.
Munster noted, “The reason is 20 and 30-somethings are embracing this creator economy, and this is really the crux of the challenge [facing Hollywood and Netflix]. The creator economy is user-generated content on steroids, and that’s where and that’s where all the viewing is going.”
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Why YouTube Is Outpacing Netflix: Munster delved into the reasons behind YouTube’s popularity, emphasizing the low cost of tools for content creation.
Moreover, it’s not just YouTube; the proliferation of other platforms like TikTok and Twitch continues to attract more users.
Deepwater holds Google as a significant investment, viewing it as one of the best ways to tap into the creator economy.
Is There Hope For Netflix? When asked if there’s a way for Netflix to compete in the realm of user-generated content by providing tools for people to upload various content to its service, Munster commented, “Unfortunately, that ship has sailed.”
He explained, “Once you get a billion plus users on a network, it’s just really hard to compete with that.”
Munster highlighted that YouTube boasts about 1.5 billion monthly active users, whereas Netflix has 300 million paid subscribers. He described Netflix customers as passive consumers of content, not creators.
Munster added, “So, I think that ship has sailed, and it will be especially evident in Netflix as growth rates continue to decline. It will still be a growing business, but I don’t think they can reach that level.”
He did suggest that one way for Netflix to potentially reach that level is by acquiring TikTok, although he acknowledged the possibility is exceptionally low.
Alphabet’s Class C shares, the parent company of YouTube, ended Tuesday’s session down 0.22% at $139.20, while Netflix saw a 3.27% decline to $373.32, according to data from Benzinga Pro.
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