Scott Galloway, the podcaster and New York University professor, explained his view on June 13 that the last significant battle in the streaming industry was a showdown between Netflix and Hollywood — and Netflix emerged victorious.
By expanding production globally, taking advantage of broadband technology, and capitalizing on inexpensive funding, Netflix (NFLX) was able to make large-scale investments similar to Amazon’s strategy, Galloway explained, leaving competitors unable to keep pace.
The outcome? A major shift in value from traditional studios and entertainment talent to Netflix’s investors and subscribers.
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Netflix’s newest version operates as more than just a subscription-based platform — it now combines both subscriptions and advertising in its business model. And nearly 94 million people have chosen Netflix’s ad-supported plan since it was introduced fewer than three years ago, according to Galloway.
Netflix has proven itself to be a master of adaptation in the media landscape.
It started as a mail-order DVD business, toppling the giant Blockbuster. Then it evolved into a streaming powerhouse, upending Hollywood’s dominance.
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Now, after a decade without major changes, Netflix is transforming once more, Galloway wrote. The company is introducing AI-driven content recommendations, mobile-friendly vertical videos, and a refreshed visual design to take on platforms such as YouTube and TikTok.
And once again, the streaming service faces a new challenge.
A woman is pictured selecting a show to watch on Netflix. New York University professor Scott Galloway sees the next streaming war as “YouTube takes on the world.”
Scott Galloway says Netflix faces a growing challenge from YouTube
Having won the last streaming war, Netflix now confronts a new threat, Galloway explained in his “No Mercy / No Malice” newsletter. In fact, this prominent challenger is in the ring with all streaming services.
“The next streaming war?” Galloway wrote. “YouTube takes on the world.”
“This year, more people in the U.S. watched YouTube on TVs than on mobile devices — a first,” he continued. “YouTube is now the No. 1 distributor of TV content, according to Nielsen. And for the past three months, YouTube registered the largest share of TV viewing (12%) among media companies; Netflix accounted for 7.5%.”
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YouTube is essentially public access television scaled to the internet, but with vastly superior production quality, observed Galloway.
His Markets podcast co-host Ed Elson notes that Gen Z sees YouTube — owned by Alphabet (GOOGL) — as an algorithm-driven force shifting influence away from established brands and toward individual creators.
The biggest disruptor to Hollywood, Galloway argues, isn’t Netflix chairman’s Reed Hastings — it’s MrBeast, the YouTube star who has perfected parasocial relationships. In 2023 alone, MrBeast amassed over a billion hours of watch time, surpassing the top Netflix shows.
“But just as individual content creators disrupted Hollywood, AI may disrupt content creators,” Galloway wrote.
While Netflix is expected to invest around $18 billion in content this year, YouTube effectively operates with a content budget of zero, instead sharing ad revenue with its creators.
MrBeast has revealed that producing a single video typically costs him $2.5 million. Yet in a striking shift, an AI-generated muzak channel recently surpassed him, becoming the fastest-growing channel on YouTube this month.
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Scott Galloway sees Netflix, streaming wars in cultural shift context
Galloway argues that the rise of Netflix, YouTube and the competition for streaming audiences has cost us something vital: a shared cultural experience.
In 1983, the final episode of M.A.S.H. was a national event, drawing 106 million viewers — nearly half of America, he recalls. By contrast, last year’s most-watched scripted TV finale, “Yellowstone,” reached just 13 million people, a mere 4% of the country.
The shift from scheduled programming to unlimited, on-demand content has fragmented American culture, Galloway suggests — and this fact reflects the loss of two key societal pillars: collective experiences and a shared identity.
“Without shared stories, we don’t laugh together, love/hate the same heroes/villains, or believe in the same facts when we argue,” Galloway wrote. “We lose our empathy, our ability to see each other as human.”
“It’s hard to demonize someone you watched ‘Cheers’ with every Thursday night; it’s easy to hate someone whose cultural references are completely foreign to your feed.”
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