By Emily Horgan

YouTube is Netflix’s main competitor, but the two companies don’t really like saying that. Instead, obfuscation abounds. The standard party line tends to be, “We’re complementary.” And Netflix co-CEO Ted Sarandos has proclaimed, “We feed each other pretty nicely.” Looking at adult audiences—and, more specifically, audiences of the marquee streaming shows that Netflix is obsessed with—the two platforms do feed each other to a certain extent. YouTube is fertile marketing ground for Netflix, providing the streamer with trailer hype and viral interview moments from the PR campaign trail. Of course, this drives engagement for YouTube as well, although it’s pretty much a drop in the ocean of views the platform accumulates by the second.

Netflix likes to emphasize its premium offerings and take what co-CEO Greg Peters calls “big creative bets.” This implies that YouTube is less-than, but these days we know that YouTube content covers the whole spectrum of quality. It’s a thriving production ecosystem—a creative economy where the cost of entry spans multiple tiers. You can be at home with an iPhone in your bedroom, or you can have a 30-person studio behind you. And many kids producers are even using YouTube to drive discovery and directly distribute traditional TV programming. One area where YouTube and Netflix don’t feed each other is the kids space—especially preschool. Here, the relationship is very much one-way: YouTube feeds Netflix. Distilling trends from the 2023 Netflix Kids Content Performance Report shows that four of the top 10 animated series on the platform were YouTube-derived nursery rhyme IPs.

In recent years, Netflix has pivoted its kids strategy to double down on IPs that have already established an audience base elsewhere. Gabby’s Dollhouse was the last Netflix-originated hit to emerge, and there weren’t loads of others before it. Many original series that have done well on Netflix have intrinsic built-in awareness. Derivatives of well-known brands include Jurassic World Camp Cretaceous, Sonic Prime and My Little Pony: Make Your Mark. These all ride the wave of robust YouTube presences that keep the engagement lights on in between series drops on the streamer.

For Netflix’s preschool business, YouTube has been a major originator of IPs that are now well-established. CoComelon, which launched in 2020, is still an out-and-out leader (although its performance has not been as strong of late). Coming behind it, Bebefinn from Pinkfong is making up ground, as are Moonbug’s Little Angel and Lottie Dottie Chicken (Galinha Pintadinha in its native Portuguese language). A few years ago, this flow of content development could have persisted indefinitely, because YouTube was constantly adding new and more advanced content brands to its offering. Nursery rhymes will always be a staple, but there was also a wave of newcomers that included Gecko’s Garage, Morphle and Carl’s Carwash.

However, that quickly changed when a seismic shift in the YouTube business model put a stop to the platform’s viability as a place where you could develop IPs while building audiences. In 2019, YouTube was caught with its pants down on kids safety and fined US$170 million by the FTC for violations against the Children’s Online Privacy Protection Act (COPPA), after which the platform implemented significant policy changes.

There is obviously no question that it was right for YouTube to address the major child-safety issues on its platform. But the unfortunate flip side of these decisions was a massive financial depression for all kids creators that continues today. One result of this is that germinating new kids content and creators on YouTube from scratch is becoming less and less sustainable. This is something that should be concerning for both YouTube and Netflix, and for the kids media sector as a whole. Platforms are commissioning fewer series that fit the old model, and Netflix itself is very averse to taking any swings on original kids content. (As mentioned earlier, the streamer now seems inclined to cling to series based on established brands, like a security blanket.)

From an engagement point of view, there is no doubt that YouTube can steer the wheel on both IP generation and successful deployment, but without financial buoyancy, the ship will inevitably sink. And this invites the question: Will the future of new original kids content be left stranded?

Emily Horgan is an independent kids media consultant specializing in YouTube and streaming platforms, and the author of the Netflix Kids Content Performance Report. Find out more at ehorgmedia.com.

This story originally appeared in Kidscreen‘s Q1 2025 magazine issue.