How Netflix learned to stop worrying and love YouTube

Follow Us Get the newsletter When Netflix released a 27-minute video of Dave Chappelle earlier this month, the most surprising part of his performance was not what he said but where he said it. Chappelle's meditation on racism, police brutality and celebrity was available for free on YouTube. Netflix Chief Executive Officer Reed Hastings has long portrayed YouTube as his company's biggest competitor. It is the only online video service in the world that people spend more time using every day than Netflix. Hastings's fear of YouTube filtered throughout the streaming giant, which has limited the number of videos posted to YouTube for some shows. Why give away viewing time to a competing platform? In January of last year, he noted that Netflix viewing and signups spiked when YouTube went down. Yet the company has reversed its position over the past few years, reflecting a fundamental shift in strategy and corporate identity. Like any good technology company, Netflix used to be only concerned with driving viewership to its platform. Netflix is a walled garden like Facebook, YouTube and Instagram. It wants to attract as many customers as possible, and get them to spend as much time as possible using its product. But Netflix isn't just a technology company anymore. It's also an entertainment company that wants to build franchises that infiltrate every corner of culture. For all Netflix's success generating new hits very month, it has had less success sustaining consistent interest in those properties over long periods of times. Disney has Marvel. Universal has "Jurassic Park." Warner Bros. has DC Comics. Netflix has… "Stranger Things"? Toy companies and all sorts of consumer product companies have taken notice, and have a theory. Because Netflix drops its shows and movies all at once, interest in those properties ebbs until the next iteration is available.  This is where Disney is the master. It turns a single idea into a TV show, a theme park ride, a toy and a Halloween costume. After just one season of "The Mandalorian," it released a behind the scenes infomercial. That show is already as big a franchise as anything in the Netflix stable. You know what online video site is a good way to reach young fans every day? YouTube.  The Chappelle video was posted to the "Netflix Is a Joke" YouTube channel, a comedy property that Netflix has also turned into a live festival and a satellite radio channel. Netflix is a Joke now has more than 1 million subscribers on YouTube, and is the home for daily clips from stand-up specials. It is one of a couple major sub-brands the streaming service operates on YouTube, alongside Netflix Junior, a kids channel with close to 3 million subscribers. The channel was once called StoryBots, a kids' entertainment property Netflix purchased last year. Posting to YouTube felt risky when Netflix saw itself as just a platform. In that world, YouTube is the biggest player, and Netflix is second. But now that competition and streaming includes companies like Disney, its biggest competitor might just become its best friend. – Lucas Shaw The best of Screentime Maverick Carter and LeBron James   LeBron James Gets $100 Million Investment to Build Media Empire The King and his longtime business partner Maverick Carter have formed a new company with an unapologetic agenda. One America News Has Support of Trump, But Not of Cable Companies The conservative TV station that's been criticized for sharing conspiracy theories. Tencent's Twitch Streaming Rival Is Hiding in Plain Sight The Chinese tech giant is rolling out a live streaming service for U.S. users. Nintendo Retreats From Mobile Gaming After Animal Crossing Success The company said two years ago that smartphone games would be a $1 billion business. Media companies scramble to right their wrongs Entertainment companies are taking turns disavowing racist practices of the past several decades. So much happened this week, it's easier to break it down into a few categories. No more blackface. Streaming services removed episodes of TV shows such as "30 Rock," "Scrubs" and "Community" that feature actors in blackface. Jimmy Kimmel also apologized for doing a skit in blackface, and YouTube personality Jenna Marbles said she would stop posting to her channel because of racist videos she uploaded in the past. No more whitewashing animation. "The Simpsons" said white actors would no longer voice any characters of color, a reversal of its practice for the past three decades. Hank Azaria had already ended his work on the convenience store owner Apu following criticism. In the same week, "Family Guy" and "Big Mouth" also said they would stop using white actors to voice black characters. No more celebrating the confederacy. Disney said it would overhaul the Splash Mountain theme park ride, which is based on a controversial 1946 film titled "Song of the South." The film is set in part at a plantation and features racist depictions of Black people. The ride will now be based on Disney's first animated musical with a Black heroine. It seems crazy to have to type the phrase "no more blackface" in 2020, but it's a good reminder to those who argue racism is a problem of the past.  Also, this.  While changing names is a nice gesture, it does nothing to solve the many, very real problems, facing Black workers in Hollywood and beyond. Summer movie season is on life support The surge in coronavirus cases in many states has forced studios to push back the grand reopening of movie theaters. Warner Bros delayed the release of "Tenet" another two weeks, while Disney pushed "Mulan" a month to August 21.  Those are the last two major movies left this summer after Viacom scrapped the theatrical release of a new "SpongeBob," and said it would offer it online. Facebook faces an advertising boycott Unilever, one of the world's biggest advertisers, has halted all U.S. advertising on Facebook and Twitter for the rest of the year. Unilever joins a group of companies, including Verizon and Patagonia, that has stopped advertising on social media until those companies do more to halt the spread of hate speech and spread misinformation. The list of companies taking part grows by the day. Let's see how many of them are still boycotting a year from now. Microsoft surrenders to Amazon Microsoft closed down Mixer, its live streaming service. Just last year, the company had signed Ninja to an eight-figure deal, setting off a bidding war for top talent. But Mixer never gained much market share. Twitch remains the dominant place for live streams of people gaming, and YouTube is the king of on-demand gaming videos. Twitch has its own problems. The site banned several popular streamers following allegations of sexual harassment. Deals, deals deals Hollywood talent giant CAA has teamed with venture capital firm NEA on a new $100 million investment partnership. Marc Geiger, the head of music at talent agency WME, left the firm in the latest sign of trouble at parent company Endeavor. Chinese tech giant Tencent acquired iFlix, a video service that has struggled to become the "Netflix of developing markets." Weekly playlist Read: "The Nickel Boys." A Pulitzer Prize-winning novel about race and incarceration from Colson Whitehead. Watch: All I wanted Friday night was a distraction, and Netflix's new movie "Eurovision" fit the bill. Listen: My colleague Ellen Huet has a new podcast on the fall of WeWork, while Peter Kafka has a new show on the rise of Netflix.   Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. Learn more.   You received this message because you are subscribed to Bloomberg's Screentime newsletter. Unsubscribe | Bloomberg.com | Contact Us Bloomberg L.P. 731 Lexington, New York, NY, 10022