YouTube Is More Recession Resistant Than Other Streaming Platforms

YouTube is more recession resistant than other streaming services such as Netflix and Disney+ given that YouTube’s core business is to provide a publishing platform for user-generated content at scale. YouTube is not dependent upon subscription revenue to the degree that Netflix, Disney+ and others are. TikTok is more of a competitive threat to YouTube than are the premium streaming services given that TikTok appeals to YouTube’s core audience.

TEK2day premium subscribers: see the table below for user and premium subscriber figures (and marketshare) for the various social media and streaming platforms including: Netflix (NFLX), Disney+ (DIS), WarnerBros Discovery (WBD), YouTube (GOOGL), Paramount+ (PARA), Peacock (CMCSA), ESPN+ (DIS), Meta Platforms (META), TikTok (private) and Snapchat (SNAP).

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Sure, in recent years YouTube has rolled out premium offerings around its video and music services, yet subscription revenue is not YouTube’s lifeblood in the way that subscription revenue is critical to Netflix (NFLX), Disney+ (DIS), Peacock (CMCSA), Paramount+ (PARA), MAX (WBD) and others.

Perhaps we will see some consolidation around smaller players such as Paramount and WarnerBros Discovery (WBD would run the combined company) in 2024, but I do not believe we will see larger players get swallowed up by Apple (AAPL), YouTube (GOOG) and Amazon (AMZN) until the U.S. has a more M&A friendly FTC. That means we will have to wait until 2025 (post November’s election) for the truly big M&A deals to occur.

Occasionally I neglect to include Microsoft (MSFT) in these content acquisition lists, but there is no reason why Microsoft could not acquire a streaming service and fold it into Xbox. WarnerBros Discovery’s IP and Disney’s IP would play nicely on Xbox, regardless of whether the IP in question is a feature film or a video game.