YouTube offers millions to creators in bid to fend off Netflix: Report

YouTube is offering millions of dollars to some of its most popular creators to keep their videos exclusive to the platform for a specified period, as it seeks to counter Netflix's growing push to lure top YouTube stars, Bloomberg News reported.

The payments could come through direct financing of programmes or by giving creators a share of major brand deals, according to people familiar with the discussions. YouTube has yet to finalise agreements, but is close to deals with several creators, the people said.

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The negotiations are ongoing and sensitive, the people added.

Netflix has in recent months stepped up its pursuit of prominent YouTubers, signing creators including Alan Chikin Chow and Nick DiGiovanni to publish their videos simultaneously on both platforms. The streaming giant is also in talks with dozens of other creators, channels and programmes, including celebrity talk show Hot Ones, Bloomberg reported.

For creators, the Netflix deals offer an opportunity to earn millions of dollars from content they are already producing while gaining access to Netflix's more than 325 million subscribers.

YouTube, however, has warned creators that posting the same videos on Netflix could hurt viewership on its platform and signal to audiences and advertisers that YouTube is no longer their primary distribution outlet.

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Creators who choose to work with Netflix could also see their relationship with YouTube change. According to people familiar with the matter, YouTube has indicated that it may be less likely to feature such creators in marketing campaigns or at company events. They could also be excluded from participating in some major brand campaigns.

Some creators have already opted against Netflix deals. Among the concerns are Netflix's requirement that videos be delivered several days ahead of publication, which does not fit the workflow of many YouTubers, as well as requests to remove certain brand sponsorships from videos.

YouTube, Netflix battle for creators

The moves mark an intensification of competition between two platforms that for much of the past two decades operated in largely separate parts of the video market.

Netflix built its business around subscription streaming and Hollywood-style films and television, while YouTube became the dominant platform for user-generated content and created a generation of internet stars.

That distinction has increasingly blurred.

YouTube has expanded aggressively into television viewing and advertising, while securing rights to major live events. Netflix, meanwhile, has increasingly looked to YouTube creators to attract younger audiences and increase engagement on its platform.

The competition has sharpened over the past year as Netflix has targeted some of YouTube's biggest channels.

YouTube CEO Neal Mohan has previously argued that creators working with competing platforms such as Instagram or Amazon Prime Video generally continue to use YouTube as their main distribution channel and can ultimately drive viewers back to the service.

But the growing number of creators simultaneously distributing content on YouTube and Netflix has prompted a rethink, Bloomberg reported.

YouTube has historically been reluctant to become a traditional studio by funding creators and influencing their programming. It also faces the challenge of keeping thousands of creators happy if only a select group receive direct financial support.

Still, the company increasingly sees exclusive or simultaneous distribution deals as a threat to its pitch to advertisers. It is harder to demonstrate the value of YouTube audiences, the company believes, when the same content is available on Netflix.

The strategy is not entirely new for YouTube. The platform previously offered financial incentives to creators who avoided deals with Vessel, a short-form video startup founded by former Hulu CEO Jason Kilar. It also developed its own short-video product, Shorts, in response to TikTok.

The latest push reflects a broader shift in the streaming business, with Netflix and YouTube increasingly competing not just for viewers, but for the creators who keep them coming back.