YouTube plays hardball to keep creators as Netflix and Disney strike deals

On September 23, YouTube brought together a few hundred of its top creators at Pier 57 in New York for its annual “Made on YouTube” event. The Showcase is where YouTube reveals new initiatives for its creator community, giving attendees a glimpse of what the video platform has been cooking up in its Skunk Works, like new AI video editing tools. But this year, YouTube wasn’t the only platform in the lead.

Netflix, Disney+, Tubi and others are aggressively striking deals with top creators, in some cases securing entirely original programming or daily releases with YouTube, offering millions of dollars in the process. The Google-owned video platform is not giving up and is launching a carrot-and-stick approach to try to maintain its place as the primary home for top talent. “It’s a really good time to be in the creator industry,” says Adam Wescott, CEO of Home Game Studios, noting the demand for their work. With the proliferation of creator-owned studios across the country, it’s a battle that could portend the future of streaming entertainment.

It all started with content aimed at children and families. Netflix, looking to bolster its children’s programming, has signed deals for YouTube’s native content CoComelonMs. Rachel and Mark Rober. It worked, with all three programs becoming some of the most-watched programs in the category. The streamer then commissioned originals from them and began reaching out to creators in other genres, ranging from food (Nick DiGiovanni), to chat (Hello mythical with Rhett & Link) and teen content (Alan Chikin Chow).

LightShed analyst Rich Greenfield estimates that Netflix has committed more than $1 billion to creator programming and podcasts over the next three years (admittedly still a very small portion of its $20 billion annual content budget).

But Netflix has only started the current war. Disney has a long history of working with creators, but recent months have seen high-profile deals with the likes of Dhar Mann, Dude Perfect and Like Nastya, as it seeks family and branded creators who can live on Disney+. And the company recently hosted a creator event at the El Capitan Theater and Disney Studios Lot, with some 350 creators to further forge those relationships. Tubi, the Fox-owned streaming service, has signed deals with dozens of creators for originals and library pricing.

The creator community is already hoping that Skydance is about to follow them, with new co-CEO Ynon Kreiz having served as CEO of Maker Studios.

But why are these other streamers so eager to get into the creative business? Several sources paint a picture built around audience, money and speed. The biggest studio platforms and streamers desperately want to have a product that appeals to the younger, digitally native audience who religiously watches creators’ content on YouTube.

“I think creators really enjoy, in the right circumstances, the elevation and amplification of being on a primary channel platform like a traditional media company,” says Akshay Mehta, CEO of Lighthouse Studios, an entertainment studio for creators. “Creators are fundamentally creatives. They’ve just discovered that over the last 15 years, for a lot of people, the best way to be creative is to go create things on YouTube.”

Money certainly helps. Many sources on the creator side point out that they need funding to help them pursue some of their ideas, and places like Netflix, Tubi, and Disney are helping them do that. Big streamers fund original shows and offer help breaking into areas like consumer products or live experiences (this was a key part of Disney’s Dude Perfect deal).

Streamers are also counting on the fact that creators can not only bring their audiences with them, but also fill their libraries with content that is, frankly, considerably cheaper than traditional fare and is produced more quickly. “These platforms have seen this change and they can’t ignore it,” says Nic Paul, president of creator services company Spotter. “They all have subscriptions, they all have ad-supported products, even at Netflix, the ad-supported product is becoming more and more central. There’s a lot of churn. Everybody’s wondering, how do we create enough content quickly to keep the audience engaged? Because if you think about it, Stranger Things on Netflix I have to wait over a year for a season, and the creators are obviously very quick to release IPs.

Indeed, one major creator who has a deal with a streaming platform claims to have told his new partner that he could produce an hour of programming for perhaps 10% of the cost (or less!) of a traditional comedy, drama or unscripted concept, all at a faster pace.

But what surprised creators more than anything was how forcefully YouTube fought back. The platform is a juggernaut, and it would be great if it lost top creators to other places. But it is leading a multipronged effort — with both inducements and threats — to try to convince creators to make YouTube their primary site. Many incentives focus on brand deals, with YouTube significantly increasing its resources in this area. Some creators view brand deals with YouTube as a way to subsidize or pay for the content they want to create, since YouTube doesn’t pay to license content in the same way that platforms like Netflix do.

“Given the cultural phenomenon that YouTube creators are, and this kind of heavyweight that they are in the culture, of course other streaming platform services have taken notice,” said YouTube CEO Neal Mohan. Great technology podcast after Made on YouTube when pressed on the dispute, adding that even though MrBeast produces his Beast Games for Prime Video, it still keeps YouTube as its home base. “And frankly, I think it’s flattering to our creators.”

But YouTube also played the game hard, with one creator saying THR that they were “shocked” by the platform’s approach. On the one hand, some threats are reasonable: YouTube selects a handful of creators to appear on stage at its annual Brandcast upfront event, a high-profile stage that can lead to major deals. And he supported Emmy campaigns for creators in certain categories. This would stop for creators who switch allegiances to other platforms. (Netflix and Disney have already promised to bring creators on board next year and fund some Emmy efforts, sources say.)

And they even suggested that creators might not be eligible for YouTube Select, an advertising program aimed at its biggest creators. This caught some creators off guard, as it was seen as an objective program based on scope and scale and built around videos on YouTube. “That’s never been their approach in the past,” says Wescott. “It was always about supporting creators and reminding them why YouTube was their home.”

The platform is still playing this game, although even there the tone has become somewhat combative, as one creator notes. THR. Earlier in October, comedian Lilly Singh returned to YouTube after a year-long hiatus, once again creating original content after working in Hollywood. In an interview YouTube published on her blog, she didn’t hold back.

“Hollywood has real systemic problems, especially for women and people of color. Over the past few years, I’ve received countless notes that weren’t about making the project better, but about making it ‘more palatable,’ ‘more marketable,’ or ‘less niche.’ It’s fundamentally anti-creative. Our job is to unapologetically tell our stories,” Singh said. “On YouTube, there are no gatekeepers demanding that I make my brain baby more palatable to the masses. This authenticity is why my channel worked in the first place.

Message received.

But why does YouTube seem so interested in keeping creators on the platform? Especially because, as Mohan notes, it’s a good thing for the ecosystem when others are interested?

“On the surface, YouTube shouldn’t care. Creators don’t launch their careers on Netflix or Disney+,” LightShed analyst Greenfield wrote on October 9. “We suspect YouTube is concerned because the top 20 to 50 creators have an outsized importance in its major ad engagements each year. Most brands only know about a select group of high-profile creators. If brands start seeing these creators appear on Netflix… does a brand start to question why it’s paying YouTube for creators it can find in a curated, brand-safe environment elsewhere?

Advertising is at the heart of the battle, with ad-funded Tubi competing with Netflix and Disney (each relying on advertising) for creator deals. Designers, of course, are used to working with brands. “A dirty little secret of our space is that 90% of revenue comes from brand endorsement and influencer marketing,” notes Wescott.

Still, none of the creators (or those who have worked with top creators) are suggesting they will leave YouTube altogether, even though they may still strike deals to develop original ideas elsewhere. And it’s not just out of loyalty to the platform that made them or funds them (Instagram and TikTok, they note, pay virtually nothing).

“I think you’ll be hard-pressed to find a successful YouTube creator who’s willing to move away from that platform, because that’s what they know, that’s where their audience is, that’s where they’ve built their business, and that’s…