YouTube offers creators millions to not work with Netflix

YouTube is offering financial incentives to popular content creators to exclusively upload their videos to the platform for a specified period, as part of a strategy to counter Netflix's efforts to attract its biggest stars, according to sources familiar with the discussions. The compensation could take various forms, including direct funding of some programs and the allocation of a portion of major brand deals to creators.

While YouTube has not finalized any deals with individual creators, it is reportedly close to agreements with several partners, sources said, requesting anonymity due to the sensitive and ongoing nature of the negotiations. Creators who choose to work with Netflix may face repercussions, according to YouTube, such as reduced chances of appearing in marketing campaigns or events if they release content on Netflix concurrently.

Additionally, they would be barred from sharing in the earnings from certain large-scale brand campaigns. Netflix has been pursuing deals with multiple high-profile YouTubers, paying creators like Alan Chikin Chow and Nick DiGiovanni to publish their videos on both platforms simultaneously. The company is still actively engaging with dozens of other creators, channels, and programs.

The Netflix agreements are attractive to creators because they provide additional millions for videos they are already producing, offering exposure to a new audience. Despite Netflix's subscriber base exceeding 325 million, YouTube has informed creators that cross-posting on both platforms negatively impacts YouTube viewership and implies a prioritization of Netflix over YouTube as the primary distribution channel.

Some creators have already opted not to collaborate with Netflix, citing the platform's requirement for videos to be delivered days in advance, a practice many creators find incompatible with their workflow. Moreover, Netflix has requested creators to remove specific brand sponsorships from their videos. YouTube and Netflix have been the dominant players in streaming video for the past 20 years, maintaining a largely amicable rivalry, with Netflix concentrating on premium, Hollywood-style content while YouTube focused on user-generated content, especially on mobile devices.

In recent years, the divide between the two platforms has narrowed as YouTube prioritized viewership on TVs, securing more ad revenue and securing rights to significant live events like the Academy Awards and the National Football League. Netflix, which has often showcased its titles on YouTube, licensed popular shows like CoComelon and Peppa Pig.

The competition has escalated in the past year as Netflix intensifies its pursuit of YouTube's most prominent channels. YouTube has contemplated various responses, with its Chief Executive Officer Neal Mohan previously asserting that creators engaging in deals with competitors, such as Instagram or Amazon Prime Video, often draw viewers back to YouTube.

Despite several creators not leaving YouTube, which remains their primary distribution platform, YouTube has decided to address the issue of creators posting simultaneously on both platforms. The company views this as a challenge to advertisers' perception of YouTube's value and appeal when videos are available on Netflix. This is not the first instance of YouTube countering competitors in this manner; it previously offered financial support to creators who refused to collaborate with Vessel, a startup co-founded by Jason Kilar that aimed to encourage social media creators to post on its app before YouTube. YouTube also developed a product for short-form video to compete with TikTok.