Saad Ullah
● New data from Fiscal.ai shows YouTube's ad revenue catching up fast to Netflix's total revenue, reshaping how we think about streaming competition.
● Between Q3 2020 and Q3 2025, YouTube's ad revenue jumped from $18 billion to $39 billion—a 124% increase with a 17.5% compound annual growth rate. Netflix grew too, but slower: from $24 billion to $43 billion in total revenue, up 82% with a 12.7% CAGR.
● The two companies face different challenges because of how they make money. YouTube's ad-based model scales well globally but could run into regulatory issues around privacy and targeted advertising. Netflix is mixing things up by adding ad-supported tiers and gaming content, but risks turning off subscribers who might feel they're getting less for their money.
● Here's what matters: YouTube's growth compounds faster than Netflix's subscription model. By mid-2024, YouTube hit $39 billion in annual ad revenue versus Netflix's $43 billion total. If trends hold, analysts think YouTube could overtake Netflix's total revenue sometime between 2027 and 2028, thanks to AI-driven recommendations and diverse revenue streams like Shorts, premium subscriptions, and creator payouts.
YouTube's faster compounding growth suggests Alphabet's platform could outpace Netflix's total revenue by the end of the decade if current trajectories hold. According to Fiscal.ai
● As we head toward 2030, YouTube's data-driven ad model might be the winning strategy in streaming.
Saad Ullah
