Netflix Versus YouTube an Example of Industry Boundaries Crumbling

I have not in the past viewed YouTube as Netflix’s most important rival, largely because of the distinction between consumer behavior related to short-form and long-form video, much as I once viewed social media and “professional media” as indirect competitors. 

But technology disruption often leads to market disruption and rearrangement. And so it appears we can make the argument that the key competitor for Netflix is not cable TV or Disney or another long-form streaming service, but YouTube, an app we all have long associated with user-generated content. 

This can happen because technology collapses boundaries between roles in a value chain. 

When the cost of performing a function falls dramatically, firms that historically occupied different layers of the stack can, by choice or circumstance, suddenly become competitors.

Technology Change	Industry Boundary That Collapsed	New Competitors That Emerged	Incumbent Industry	Example Firms
Internet search and digital advertising	Media vs. technology platforms	Search engines competing for ad revenue	Newspapers, magazines, TV	Google vs. The New York Times Company
Streaming video distribution	Cable networks vs. software platforms	Streaming services competing with TV networks	Cable and broadcast TV	Netflix vs Comcast
Smartphones and app stores	Device maker vs. software platform vs. media distributor	Phone companies competing for content distribution	Media distribution	Apple vs. Disney
Cloud computing	Enterprise IT vendors vs. infrastructure providers	Hyperscalers competing with enterprise software vendors	Enterprise software	Amazon Web Services v.s Oracle
Ride-sharing apps	Transportation company vs. software platform	App platforms competing with taxi fleets	Taxi industry	Uber vs. traditional taxi operators
E-commerce logistics platforms	Retailer vs. logistics provider	Retail platforms competing with delivery companies	Retail + parcel delivery	Amazon vs. UPS
Digital payments	Banks vs. software companies	Technology firms competing with banks	Retail banking	PayPal vs. JPMorgan Chase
Online travel platforms	Travel agencies vs. software marketplaces	Online platforms competing with hotel distribution	Travel agencies	Booking Holdings vs. hotel chains
Social media platforms	Media publishers vs. social platforms	Platforms competing for audience attention and ad budgets	Media companies	Meta Platforms vs. news publishers
Electric vehicles + software	Automakers vs. software companies	Software companies entering mobility	Auto manufacturers	Tesla vs. legacy automakers
Smart home platforms	Consumer electronics vs. home services	Platforms competing with appliance makers and utilities	Appliance manufacturers	Google (Nest) vs. Honeywell
Generative AI	Software tools vs. knowledge work	AI models competing with software products and service firms	SaaS, consulting, creative services	OpenAI vs. enterprise software vendors

When the cost of performing a function falls dramatically (because of computing, networks, AI, logistics platforms, etc.), firms that historically occupied different layers of the stack can become competitors.

In the case of Netflix and YouTube, there is only so much time available to people, and media consumption is no different. So all media compete with all others for attention. 

In that sense, both YouTube and Netflix are bigger direct competitors in the sense that both compete for the same scarce resources: time on the TV screen, advertiser budgets and cultural attention.

One has to get past the differences of business models and content format.

Recent Nielsen “The Gauge” data shows YouTube as the top streaming app on TV sets in the United States, with around 12 to 13 percent of total TV usage versus roughly eight percent for Netflix. So on the dimension of “time,” they are competitors, if still mostly indirect.

Advertisers see both as desirable venues.

And both are expanding into each other’s turf: Netflix is adding ads, live events and creator‑style formats, while YouTube hosts full‑length movies and TV and invests in higher‑end production and living‑room viewing, blurring the old “user-generated content versus Hollywood” characterization.

YouTube commands enormous daily time spent, with average global usage around 50 minutes per day per user on social platforms, and it leads all streaming apps in total TV watch time in the United States, which directly overlaps with Netflix’s engagement metric of hours viewed.

Short‑form vs long‑form content preferences have in the past been differentiators between Netflix and YouTube (“how each earns its revenue”), but as television and digital video ad budgets shift away from traditional TV, every dollar is now effectively a choice between YouTube, Netflix, and a shrinking set of legacy media apps.

So a greater degree of direct competition in the future seems inevitable, as different as the two providers have been, historically. 

But that also is a good example of how technology disruption leads to market disruption, including the creation of new competitors in established businesses as well as new competition between contestants formerly seen as operating in different parts of the market. 

Is Private Equity "Good" for the Housing Market?

Even many who support allowing market forces to work might question whether private equity involvement in the U.S. housing market “has been a good thing.”

The impact on housing supply, rental unit supply or prices for those products is contestable.

And while we might agree that other elements of the housing supply market arguably also are very important (zoning and other regulatory “red tape” issues), we might also agree that, so far, private equity involvement in U.S. housing has not been clearly positive, in terms of increasing supply or producing affordability gains. 

PE firms are estimated to own at least 239,000 single-family rentals, over one million apartment units, and 275,000 manufactured home lots as of mid-2022, representing about 1.6 percent of all rental homes nationwide but up to 12 percent to 20 percent in some markets such as Atlanta or Phoenix. 

To be sure, this activity arguably has some benefits for renters, though that argument remains contestable. 

PE firms focused on rental operations can expand rental options and inject capital into the market, also reduces for-sale inventory, elevates prices, and imposes some higher costs on renters, some argue. 

In some ways, the criticisms are similar to those made of extensive conversion of residential housing to short-term lodging such as provided by AirBnB operations, shifting housing supply from “available for full-time dwelling” to “commercial short-term rentals.”

Arguably, PE investments influence both for-sale and rental supply, often shifting homes from ownership to rental markets. Supporters of PE involvement say the impact is minimal. 

Critics contend it exacerbates scarcity for buyers and does not necessarily create lower prices for renters.

The argument is that PE firms have bulk-purchased distressed or entry-level homes, converting them into rentals. This removes inventory from the for-sale market, particularly affordable starter homes, worsening a national shortage estimated at three million to five million units. Again, the impact might be “at the margin” in many cases. 

Investors bought 26 percent of affordable homes in 2023, outbidding families and pushing first-time buyers out, critics allege. Studies show institutional buyers reduced for-sale stock by one percent to two percent nationally but up to 10 percent to 15 percent in Sun Belt metros post-2020.

On the positive side, PE arguably has expanded rental options by rehabilitating foreclosed properties and investing in build-to-rent developments. 

Since 2012, firms have spent over $25 billion on single-family rentals, adding supply in underserved suburbs and reducing vacancy rates. 

A Federal Reserve analysis notes that PE helped stabilize markets post-2008 by shortening foreclosure timelines and boosting local construction employment. In multifamily, PE owns about 10% of U.S. apartments (over 2.2 million units), including new builds that close supply gaps. Some research indicates this diversifies neighborhoods, lowers segregation by attracting lower-income, diverse tenants, and even nudges rents down through added competition.

While PE claims to boost economic growth by investments such as $280 billion in life sciences-related real estate (with spillover to housing), critics highlight opportunistic tactics, such as deferring maintenance or constraining new builds to keep occupancy high. 

In affordable housing, PE's short-term focus can lead to unsustainable practices, reducing long-term supply quality. Empirical data shows no broad increase in total supply; instead, PE often repositions existing stock for higher-margin rentals, displacing potential owners.

PE's target 20-percent financial returns typically raise costs through higher charges, fees, and market consolidation. However, in some cases, increased rental supply can moderate rents, though evidence leans toward net upward pressure on both ownership and rental prices.

Some argue PE acquisitions have driven up home prices by 40 percent to 50 percent since 2020, partly due to reduced for-sale supply and cash-heavy bidding. Others make the opposite argument.

But PE defenders argue PE is a symptom, not cause, of high prices from underbuilding.

Rents have risen 30 percent nationally since 2020, with PE-linked properties showing aggressive hikes. Firms add fees boosting revenue 12 percent to 16 percent, and studies link PE ownership to 17 percent to 26 percent higher evictions in Minneapolis-St. Paul. 

PE advocates, like the Private Equity Stakeholder Project, emphasize benefits such as $18.4 billion raised for affordable multifamily housing (2019-2024) and professional management improving quality. 

So some might note that PE involvement in rental housing has modestly increased rental supply and significantly reduced for-sale inventory. 

Harder to determine is the specific PE impact on higher home prices (up 40 percent to 50 percent) and rents (up 30 percent), which arguably have climbed for all sorts fo reasons. 

We Don't Know What We Don't Know

One fascination I have with public policies is how often we have no idea whether our policies actually work. That perhaps is not surprising, given the complexity of most “human, civic and social problems.” And, for many reasons, not the least of which is ethical, we never can do controlled studies. 

Some of that uncertainty can be seen in public policies to support home broadband, where we still do not have conclusive and consistent evidence that municipal networks actually produce outcomes greater than the opportunity costs and actual investment.  

Study / report	Year	Geography	Method	Headline finding (summary)
Christopher S. Yoo & Timothy Pfenninger, “Municipal Fiber in the United States: A Financial Assessment” (UPenn)	2017 (report); published versions 2022	United States (sample of municipal FTTH projects)	Financial statement analysis of 20 municipal fiber projects (multi-year cash flow and debt repayment projections)	Found 11 of 20 municipal fiber projects generated negative cash flow over the sample period; only 2 of 20 were on track to recover total project costs within expected useful life — authors conclude many municipal projects would not cover costs without subsidies or external support. (Penn Carey Law)
Casey J. Mulligan / Jonathan Kolko (Public Policy Institute of California), “Does Broadband Boost Local Economic Development?” (Kolko, PPIC)	2010	U.S. counties / metro areas (United States)	Econometric analysis of broadband penetration vs local economic indicators	Concluded broadband expansion had limited measurable effects on local employment and wages in their models — economic benefits to residents appear limited and do not clearly outweigh large public deployment costs in some settings. (Public Policy Institute of California)
Grant S. Ford, “The rewards of municipal broadband: An econometric assessment” (Journal article / working paper)	2021	U.S. cities with municipal investments	Econometric evaluation of labor-market / economic outcomes after municipal broadband investment	Found no economically or statistically significant effect of municipal broadband on labor-market outcomes — casts doubt on large local economic returns sufficient to justify big public subsidies. (ScienceDirect)
C. S. Yoo (earlier working material / analyses summarized in press), “Municipal Fiber in the United States: An Empirical Assessment of Financial Performance” (UPenn summary & press)	2017 (widely reported)	Sample U.S. municipal FTTH projects	Empirical accounting of cash flows, break-even projections	Reported multiple high-profile municipal projects that would not repay costs within realistic timeframes (e.g., extremely long payback estimates for some cities), concluding that fiscal risks to municipalities can be material without subsidies. (Penn Carey Law)
ITIF / policy analyses (myth-debunking & affordability critiques), “Are High Broadband Prices Holding Back Adoption? / Broadband Myths” (ITIF)	2021	United States (policy analysis)	Policy literature review & data analysis	Argues that affordability/subsidy programs are likely to be a blunt tool in many contexts; recommends targeted subsidies instead of broad infrastructure subsidies because wide public subsidies may not be cost-effective in driving adoption or economic gains. (Policy critique relevant to subsidy cost-effectiveness.) (ITIF)

The issue, in all cases, is that careful investigators do point out that correlation is not causation. 

They argue that there might be a correlation between higher home broadband investment and economic outcomes, though not suggesting the home broadband investment “caused” the increases. 

The broad problem is that it never is clear whether home broadband investment follows economic growth and reflects it, or somehow enables it. Economic growth, when it happens, is likely the result of a lot of interconnected causes, and home broadband might not even be among the drivers. 

Study / report	Year	Geography	Method	Headline finding (short)
Qiang, Rossotto & Kimura (World Bank — Information and Communications for Development)	2009	120 countries (developed + developing)	Cross-country growth regressions (endogenous growth framework)	Found broadband diffusion associated with higher GDP growth: estimated sizable positive effects of broadband penetration on GDP per capita for both developing and developed countries. (World Bank)
Koutroumpis — The economic impact of broadband on growth (Oxford / OECD analyses)	2009 (and follow-ups)	OECD countries (multi-country panels)	Simultaneous macro + micro modelling / panel IV	Estimates that faster broadband adoption and higher speeds measurably raise GDP — e.g., a 10% increase in penetration or speed changes produce nontrivial % gains in GDP. (ITU)
Czernich, Falck, Kretschmer & Woessmann — Broadband Infrastructure and Economic Growth (Economic Journal)	2011	OECD panel (1996–2007)	Instrumental-variable panel regressions	A 10 percentage-point increase in broadband penetration raised annual per-capita growth by ~0.9–1.5 percentage points (IV estimates). (OUP Academic)
Briglauer et al. — Socioeconomic benefits of high-speed broadband (peer-reviewed / 2024)	2024	Cross-country / country-level analyses	Econometric analysis of adoption & speed vs GDP outcomes	Reports positive short-run and pandemic-era effects of increased adoption/speeds on GDP; quantifies significant returns to adoption increases. (ScienceDirect)
Brattle Group — Economic Benefits of Fiber Deployment	2024	United States (nationwide modeling)	Benefit-cost modeling (NPV of housing value, income, employment, social benefits)	Finds large net present value benefits from fiber deployment (authors estimate substantial NPV and argue public support may be justified because private returns under-capture social benefits). (Brattle)
Brattle Group — Paying for Itself: ACP delivers more than it costs (Affordable Connectivity Program analysis)	2025	United States (program level)	Program cost-benefit modeling (health, education, labor market savings)	Concludes reinstating ACP yields net economic benefits greater than program cost via health, education, and labor productivity gains. (Brattle)
ITU / CITI (Columbia) — The Impact of Broadband on the Economy (Raul Katz)	2012	Global literature review + case analyses	Literature review + case studies; synthesis of empirical evidence	Summarizes broad evidence that broadband has positive effects on growth, productivity, and jobs and outlines policy issues for maximizing social returns. (ITU)
Broadband Commission / OECD syntheses	2013–2020	International	Literature syntheses / cross-country summaries	Survey of literature: typical estimates show a 10% rise in penetration can raise GDP growth by 0.24%–1.5% depending on context; policy reports argue public intervention can be warranted to capture social returns. (Broadband Commission)