YouTube is looking more and more like Netflix (NFLX 2.00%) every day. In its latest step toward mimicking the streaming veteran's style, YouTube now offers free access to dozens of TV shows.
However, Alphabet's (GOOG 0.06%) (GOOGL -0.01%) service will never quite replicate the Netflix experience. The two video services are too fundamentally different in too many ways.
What's new?
Alphabet's enormous video-sharing service just added 76 TV shows to the array of content that can be viewed for free by any user accessing YouTube from a U.S. internet address.
This is not new original content at all. YouTube signed licensing deals for shows including old-school classics like two seasons each of The Lone Ranger (1949) and Hopalong Cassidy (1937). You'll also find titles from the 1980s such as 21 Jump Street and Highway to Heaven alongside newer fare including Heartland and The Mediator With Ice-T -- both produced in the last decade.
There isn't much overlap with Netflix's catalog. The only series I found on both was Heartland, but even for that shared title, the offerings are different. Netflix offers all 13 seasons and looks forward to the 14th becoming available on April 1. YouTube only offers the first three seasons.
Before this week, YouTube already offered more than 1,500 movies from a variety of studios. As is typical with licensed content portfolios, that list of titles evolves over time. YouTube claims that "up to 100" fresh titles become available each week, replacing other movies that get removed as their licensing agreements expire.
On the business side, you can watch these films and shows in a couple of ways:
- You can watch any of these titles for free with the occasional commercial break.
- Some of the shows are also available for purchase, with few choices in terms of video quality for newer shows. This way, you won't see any ads.
- YouTube didn't mention this option, but I haven't run into any ad spots when I'm logged into my YouTube Premium account.
Image source: Getty Images.
Compare and contrast
So YouTube is monetizing its professionally produced content in a few ways. Two of them should feel pretty normal to most YouTube viewers, while the more oddball option to purchase shows by the season reminds me of pay-per-view content on cable TV. Plus, you have to pay close attention in order to notice the purchasing option at all.
Furthermore, at the end of each season, the video window fills up with a selection of fairly recent feature films, which you can buy or rent with a couple of clicks. If that feels familiar, you've probably used Amazon Prime Video, where every click seems to bring you one inch closer to buying something that isn't included free in the subscription.
That's a far cry from the simpler Netflix setup. As long as you pay your monthly subscription fees, you've got full access to anything and everything that video service has to offer. There are no ad breaks, and the Netflix catalog is packed with a wide array of original titles you won't find anywhere else -- quite often of award-winning quality.
Netflix is a premium service for the discerning consumer. YouTube wants to grab a slice of that sweet, sweet revenue pie, but it was never designed to support a premium-grade experience. So YouTube's freely available TV shows will never really compare to Netflix. This service was put together with a different target audience in mind, where the convenience and ease of use of a higher-quality service are replaced by lower prices and a less appealing experience.
And YouTube isn't taking the effort too seriously. Media-streaming services that offer a mix of ad-supported and subscription services always try to move the ad-viewing freeloaders into the more reliable subscription channel. In this case, YouTube didn't even mention the advantages of having a premium YouTube account.
What have we learned today?
Adding a few more free TV shows to YouTube is not likely to move the needle for the platform's premium subscriber count, nor for the parent company's top line. Indeed, this latest enhancement to YouTube's offerings serves to highlight the qualities that keep Netflix ahead of the pack.
Nobody else is offering an uncluttered subscription service for video-streaming entertainment. The temptation to add some combination of ad spots, pay-per-view offerings, and other options that could wring a few more pennies out of each subscriber always becomes too great. And that's why Netflix keeps winning in the long run.
