Owl & Co

Alphabet's YouTube turned 1.7 trillion hours into $62B in 2025. What does that mean for anyone competing in the attention economy? For the last two years, we have been keeping a model of YouTube's entire P&L and viewing hours around the world. The company only discloses ad revenue ($40.3B in 2025, $11.4B in Q4) and viewing milestones; today, they did say YouTube generated "$60B+" in total revenue in 2025. Our estimates: $62B in revenue, with Operating Income of $9B - and people spent a staggering amount of time on YouTube—roughly 2x Instagram and Facebook combined, and 9x what they spent on Netflix. Apples and oranges, you will say. Perhaps. But time is finite. And just as YouTube successfully moved into TV sets (where viewership is growing faster for mobile for them), Instagram is belatedly dipping their toes on TVs, while Netflix, Disney+ and other streamers have announced plans to gain back mobile time through vertical video. (Instagram is growing mobile time spent even faster than YouTube, driven by Reels.) There's been a lot of debate about whether YouTube "is" TV and to what extent they compete with Netflix and other streamers and TV networks. Netflix has been increasingly vocal saying they do. Others have pointed out that since YouTube doesn't commission original TV shows or movies (they did many years ago), they should not be considered a competitor. Netflix responds: if they're buying NFL rights and the Oscars, where do you draw the line? What matters most: economics. YouTube generated $40B in ad revenue in 2025, up 11% YoY. But their subscription businesses (YouTube TV, Music and Premium) are growing even faster. The company paid $100B to creators, media companies, sports and music rights holders in the four years to 2024—and over $31B in 2025, we estimate. THE BIGGER PICTURE: → YouTube monetizes attention at a lower RPMH than Netflix and Meta, but at massive scale → The platform is executing a multi-device (mobile → TV), multi-revenue (ads → subscriptions) playbook that competitors are now trying to replicate → Free options including YouTube are gaining time spent faster on TVs. → Netflix is still more profitable than YouTube ($13B reported OpInc for Netflix vs our estimated $9B for YouTube) I break down streaming economics every week in Streamonomics®; subscribe for free (link under my name). Owl & Co clients get it earlier, with exclusive data on platform monetization. What is YouTube's next move?

Disney reported FQ1'26 yesterday. Its streaming revenue is now likely higher than linear, and today's new CEO / Chief Creative Officer appointments today underscore how different the company is compared to the last leadership transition. The earnings tell a great story, especially for streaming. Entertainment SVOD revenue went up 11% YoY, to $5.35B, with operating income of $450M (up 72%). On top of that, Disney's overall results consolidates other large streaming businesses that are not broken out: Fubo/Hulu Live and ESPN DTC; which likely added $2B+ in revenue the quarter [UPDATE: Fubo/Hulu Live reported $1.55B in revenue] This didn't happen by accident. Over the last year (especially the last four months), Disney rebuilt the architecture: → ESPN launched Unlimited, the new direct-to-consumer service at $29.99 for the first time including all rights, also available to cable bundle subscribers. This cements ESPN's place in both the streaming and sports rights ecosystems, allowing them to allocate rights across streaming tiers and the bundle → Hulu Live merged with Fubo, reaching over 6M subs → Disney+ is consolidating brands and UIs globally following the full Hulu acquisition Disney reaffirmed its guidance to 10% operating income margin for Entertainment SVOD. At CES, a flurry of ad tech announcements, including the support of vertical video, was well received by advertisers. During the call, Bob Iger called out the impact of local content and the upcoming addition of vertical video as well as a curation of ["up to 30 seconds"] shorts created by fans via Disney's partnership with OpenAI's Sora. In response to a question, Iger also called out the "one-app" experience (coming sometime at the end of the calendar year), and cited the reduction in churn coming from bundling. Here's another opportunity that may come next: deeper marketing integration with Experiences. Disney's parks and cruises have always been the original direct-to-consumer business: decades of selling directly to families, capturing data, and building lifetime relationships. Expect streaming and Experiences to work more closely on lifecycle marketing, turning a Disney+ subscriber into a park visitor and back again. UPDATE: Disney announced that Parks chief Josh D'Amaro will be the new CEO, with Dana Walden as President and Chief Creative Officer. They're taking over a different company where experiences are thriving and streaming is already the present. THE BIGGER PICTURE: → Disney's streaming revenue now likely exceeds linear → The ESPN Unlimited launch at $29.99 signals Disney believes sports fans will pay premium prices → Disney had another record year at the box office, driven by Avatar, Zootopia 2 - those movies making it to Disney+ soon. I break down streaming economics and the attention wars every other week in Streamonomics® subscribe for free (link under my name). Owl & Co clients get it earlier, with exclusive data. What else stood out to you?

Meta made $201B in 2025. Here's why that matters to Netflix and other streamers. Meta's vertical video ecosystem now monetizes time spent as effectively as Netflix, the gold standard in premium streaming. In the US, Meta actually enjoys higher Revenue Per Thousand Hours (RPMH), according to Owl & Co estimates. The numbers: $201B in revenue, up 22% YoY. Ninety-eight percent came from advertising on its family of apps, driven by AI advertising tools and time spent growth, especially from vertical video. Reels alone hit a $50B annual run rate in October, powered by over 2 billion advertisers using Meta's AI tools to generate video ads (I will update these figures if management does.) As Streamonomics® readers already know, Meta is likely now the biggest seller of digital video advertising in the world. And according to third-party data, in 2025 Instagram time spent grew 14% YoY. That's remarkable for an app of its size; nearly half of it in the US comes from Reels. But vertical video isn't just about Reels, TikTok and Shorts anymore. The format is expanding across use cases: short dramas, live commerce, sports highlights, news clips, educational content. It's becoming the default interface for mobile-first video consumption globally. And Meta isn't stopping there. They're going after TVs. This week, they announced subscription products with expanded AI capabilities, following the multi-revenue, multi-device playbook that has worked for YouTube. THE BIGGER PICTURE: → Meta monetizes attention as efficiently as premium streaming, but at massive scale and without content costs → Vertical video is no longer a format; it's the dominant video consumption paradigm on mobile → Meta is executing YouTube's playbook: multi-device (mobile → TV), multi-revenue (ads → subscriptions) I break down the economics of vertical video and the streaming attention wars every week in Streamonomics® — subscribe for free (link under my name). Owl & Co clients get it earlier, with exclusive data on platform monetization. Which vertical video application do you think has the most room to grow?

Netflix says engagement grew only 2% in 2H25, dragged down by lower viewership from second-run licensed shows. The reality is way more nuanced. Netflix actually had a great story to tell: record revenue, record profits, and 325M subscribers (up 25M in a year). But that subscriber number raised a question: wouldn't it imply per-subscriber engagement went down? Netflix essentially admitted as much, citing as an example that new members from countries like Japan watch less TV and bring down the average. US engagement did grow, hitting 9% share of TV viewing in December per Nielsen, a platform best. Then there's the licensed content narrative. Netflix said licensed viewing declined because they had a "lower volume of licensed, second-run content" following elevated strike-era licensing in 2023-2024. But the 10-K published on Friday tells a more complex story: content amortization went up for originals and even more for licensed content. If they're spending more on licensed content, why is viewership going down? For our upcoming What We Watched on Netflix: the Streamonomics edition, we're once again combining financial and viewership data, to find out what's delivering on Netflix and what that means for competitors and suppliers. The chart below shows breaks out content amortization, viewing hours and CPMVH (Cost-Per-Thousand-Viewing-Hours) for Originals and Licensed over the last three years. (We use Netflix's 10K definition for Licensed Content, which includes some shows that are branded as original). One key shift: licensed content now includes the WWE (starting in 2025), accounting for a significant share of growth in spend. And just as they negotiate very aggressively for the best possible terms and are known to walk away from most deals, Netflix also announced a global expansion of the Sony Pay-1 deal, and a slate of 20 licensed shows from Paramount. These will hit the P&L as early as 2026, explaining the announced increase in content spend - and possibly giving more support for Netflix’s internal valuation of WB’s library. Meanwhile, competition from free options is intensifying. In 2025, YouTube's time spent grew faster than Netflix's, and US faster than global, according to our model. Instagram's grew even faster, driven by Reels, now generating close to 2.5x Netflix's viewing hours globally, all from mobile. THE BIGGER PICTURE: → Per-subscriber engagement likely declined even as total hours held steady → The "licensing less" narrative is more nuanced → Competition from YouTube and Instagram is accelerating, especially on mobile I break down how Netflix (or anyone) might break its engagement rut in this week's Streamonomics®, including exclusive charts on content spend vs. viewership. Subscribe for free (link under my name). Owl & Co clients get it earlier, with deeper data. What's your read: yellow flag or just noise?

Netflix didn't have the #1 streaming original of 2025 in the US. Luminate's 2025 year-end report reveals the top streaming original by US minutes watched was Peacock's Love Island USA. HBO Max's The Pitt came in at #2, Paramount+'s Landman: S1 at #3. Stranger Things S5? It landed at #4, partially because it launched late in the year. (To be fair, followed by other Netflix shows: Wednesday S2, The Night Agent S2, Hunting Wives; AND Love Island USA had 37 episodes vs 14 for The Pitt, 8-10 for the Netflix shows and Landman S1) But one story I found even more interesting wasn't who topped the list. Rather, which shows kept their audience, and what they had in common: a weekly or batch release pattern. Retention is the secret weapon in streaming. Shows that retain viewers well get a double reward: they're more highly recommended by algorithms. Luminate's metric is simple: growth in views for the season finale relative to the premiere in the initial 12 weeks since release. The standouts: Hulu's The Handmaid's Tale: S6 achieved 118% retention (suggesting viewers continued catching up with the show past the initial window, and tons of them came for the finale). Paramount+'s 1923, The Pitt, Prime Video's Invincible S3 (congrats Skybound), Hacks S4, and Disney+'s Andor all achieved 85%+ retention. Luminate tells me the median retention among all streaming originals they tracked was 54%. (The top 10 shows included in the chart below are ranked by retention; the ranking based on minutes watched is included in Luminate’s report) Serialized shows are more engaging but also more demanding, raising the stakes for retention. As Streamonomics® readers know, I've argued we have too much serialized TV. The report supports this: the number of new serialized dramas are trending down, while procedurals are holding flat. THE BIGGER PICTURE: → Streaming originals are now a multi-platform horse race; no single streamer dominates the top slots → Retention is the key metric; algorithms reward shows that hold audiences, creating a compounding effect → The serialized TV glut may be self-correcting as the industry recognizes the retention risk Lots of great data in the full report from the team at Luminate, including production trends, theatrical vs. original streaming movie performance, and more. I thought about it a lot in the context of Netflix's just-released engagement report, following their $6-$8B investment in the Sony Pay-1 deal. Highly recommend viewing it in full (link in comments). Which 2025 original surprised you most, either by making the list or being absent?

All eyes on Netflix today. The company reports full-year 2025 financials and releases "What We Watched: 2H25", but the bigger story may have already dropped this morning. Netflix and WBD announced an amended, all-cash agreement at $27.75 per share. The revised structure eliminates the stock component, giving more value certainty for WBD stockholders, and most importantly accelerates the path to a stockholder vote, now expected by April 2026. WBD filed its preliminary proxy statement today. WBD also reduced the amount of debt to be absorbed by Discovery Global, citing stronger financial performance. Why does the timeline matter? Because by accelerating shareholder votes, the move increases the chances that WBD will complete the separation of Discovery Global before the Netflix-WB closes, complicating the calculations of Paramount's bid for the entire company. Meanwhile, Nielsen just released The Gauge for December. Netflix hit 9% of total US TV audience, an all-time high. But they weren't alone in reaching all-time records: Streaming overall reached 47.5%, Prime Video 4.3%, Paramount Streaming 2.5%, Roku Channel 3.0%. THE BIGGER PICTURE: → The all-cash amendment removes market variability and underscores Netflix's balance sheet strength → An April 2026 stockholder vote signals Netflix and WBD are signaling confidence in the regulatory process → The company has guided to $45B in 2025 revenue and $13B+ in Operating Income. [UPDATED: see comments for reported results; as expected, Netflix met guidance, only surprise was on the engagement side] The chart below shows financials for '23-'24 and forecast for '25, as well as global engagement hours, and our revenue and cost efficiency metric: Revenue and Cost per Thousand Viewing Hours (in all cases 2025 is a forecast: to be updated after they report at 1PM PT). I'll be breaking down the earnings and "What We Watched" data in next week's Streamonomics® subscribe for free (link under my name). Owl & Co clients get it earlier, with exclusive data and analysis. Does the accelerated timeline change your view on whether this deal closes?

Is TikTok double-dipping in short dramas? Short dramas generated $3B in revenue in 2025, up 2.4x y/y and consistent with our earlier forecast. The market is heating up: DramaBox is seeking $100M at a $500M valuation (per Business Insider), and Holywater just raised $22M in Series A funding (per Axios, both quoting Owl & Co research). Here's a development that hasn't been reported in the US yet. Late December, TikTok quietly launched PineDrama in the US and Brazil, a standalone short drama app that connects directly to users' TikTok accounts. The app mirrors TikTok's UI with vertical scrolling feeds and features series from ShortMax, FlareFlow, Sereal+ and others. Most series feature American actors. What makes this interesting: PineDrama advertises itself as "ad-free" and doesn't yet support paywalls or subscriptions. This immediately begs the question: how will it make money? And what's in it for producers? Recall that TikTok rolled out "mini drama" channels inside the core TikTok app just weeks earlier, giving producers the ability to monetize via paywalls. From TikTok's perspective, it makes sense: it's an experiment, much like Melolo in Indonesia or Red Fruit in China were before they become hugely successful. But this is different: PineDrama is the first short drama app to be *advertised* as completely ad-free (though it stops short of saying "we will never have ads", like Netflix did early on). It follows that *some* kind of monetization will happen in the future. Global Short Drama Index subscribers got this story way before any press coverage (we still haven't seen any in the US). They also get monthly market share data, top series rankings, and the signals that matter before they become headlines. We also track the why and how. ReelShort, DramaBox, and MyDrama are absent from TikTok's efforts; we explain why. THE BIGGER PICTURE: → Short dramas made a $3B globally (ex-China) in 2025 - growing fast, but still a small fraction of the $100B+ vertical video market → TikTok is experimenting with multiple distribution strategies simultaneously; the implications for producers and competitors are significant → The capital flowing into this space (DramaBox, Holywater, GammaTime) signals we're still in the early innings I cover the economics of TV/Film/Vertical streaming and more every other week in Streamonomics®: subscribe for free (link under my name; clients get an early version, with deeper analyses). Is TikTok building a new funnel, or fragmenting its own ecosystem?

Christmas Day shattered a historic streaming record. According to new Nielsen data reported by Sara Fischer at Axios, streaming accounted for 54% of all TV viewing in the U.S. on Christmas, only the second time in history streaming has surpassed 50% in a single day. Total viewing minutes hit 55.1 billion, up 8% from the previous Christmas record. What drove it? Netflix's Lions-Vikings broadcast became the most-streamed NFL game in history with 27.5 million average viewers (later surpassed by an Amazon wildcard game in January). Cowboys-Commanders did 19.9 million, solid, but the two-game average came in slightly behind last year's Christmas matchup, as the chart below shows. So a new overall day record wasn't necessarily expected. Except Netflix also dropped the second batch of Stranger Things' season finale. And because Christmas fell on a Thursday, Amazon had its own game. Combined, Netflix and Amazon represented 22.5% of all time spent on TV sets in the U.S., compared to 12.1% for the entire month of November. Netflix is building an association with sports without buying full-year, big-league rights. Big events like the NFL Christmas Days and MLB Opening Day game. Year-round programming like WWE. And last week, a slate of sports podcasts to create daily touchpoints with fans between tentpoles. THE BIGGER PICTURE: → Streaming has crossed a threshold: 50%+ share is no longer an anomaly, it could soon be the norm → Netflix's "event sports" strategy combines cultural moments without the fixed costs of big-league full-season rights → Sports rights are expensive, and often a loss leader Nielsen reports The Gauge for December on Tuesday, the same day Netflix reports earnings and "What We Watched 2H25". What do you expect to find out?

Ten years ago today, Variety broke the news that I was starting Wondery . I had just come back from CES, where the Fox exec team was attending presentations. Some of my colleagues in that room would go on to run the media divisions at Disney, Amazon, Sony. At the time, I was running Fox International Channels, a division that was valued at $10B by a major bank. Leaving all that behind to start a podcast company, when the entire industry was maybe a $100M business, was terrifying. One minute you’re running a global organization. The next, you’re hooking up your own printer. The founder journey is full of moments where you genuinely don’t know if you’re being brave or foolish. I turned down acquisition offers in 2017 and 2018. Was that conviction or stubbornness? In hindsight, it's easy to say, but at the time I didn't know. You make the best call you can with incomplete information, and the advice of those around you (I was lucky to get great advice), then you live with it. Along the way, there were plenty of mistakes. But there was also this: the quiet joy of realizing you’re building something people truly love. A few years in, after Dirty John, Dr. Death, Business Wars, WeCrashed, and Imagined Life had found their audiences, we noticed something. Every time one of us wore a Wondery t-shirt (and we wore them constantly: they were the most coveted swag at ad events), we’d inevitably run into a fan. Someone would stop us and tell us which show mattered to them. That never got old. This past Sunday, podcasts got their first-ever Golden Globe category. Hours later, Michelle Williams won for her portrayal of Molly Kochan in Dying for Sex (one of seven Wondery podcasts turned into TV shows.) The industry we once struggled to size at $100M is now a $7.3B global business. I was proud to take a part not just in founding Wondery, but in moves that pushed the industry forward, including advertising research, and the creation of the Podcast Academy, the non-profit membership association that celebrates excellence in podcasting through the Ambies. I think about that founder journey a lot in my work today at Owl & Co, advising leaders as they navigate their own leaps into the unknown, and helping them build not just companies, but enduring categories. You can often build the most value by recognizing a trend when it's early, though not too early. (More about that in today's issue of Streamonomics® - you can find the link under my name.) To everyone who was part of Wondery: the team, the talent, the listeners, the advertisers, the platforms, our partners, our agents, our investors, and the team at Amazon: thank you. And if you ever stopped or would have stopped someone wearing a Wondery t-shirt (or got stopped yourself): which show was it?

Netflix kicks off streaming earnings season next week, having guided to $45B in revenue (up 17% y/y) and $13B+ in operating income. Strong numbers. But many eyes will be on something else: the WB deal (especially following Paramount's proxy fight) and engagement. Alongside earnings, Netflix will release "What We Watched: 2H25." Last July, they explained away flat engagement in 1H25 by saying their content slate was back-half loaded. In October, Greg Peters said engagement grew "slightly faster" in Q3. The shows/movies that made it to a Top 10 weekly ranking collectively grew viewing hours by 14% in 2H25. But in 1H25, the Top 10 had grown by 8%, suggesting viewership at the top came at the expense of the long tail. The tension is clear: Netflix's revenue and profits are growing faster than engagement. I remember that movie. It's a tension the whole industry is responding to. At CES last week, Disney announced they're going all-in on vertical video to drive daily engagement on mobile. Netflix is experimenting with podcasts (Bill Simmons launched last night) and aggregation (TF1 in France). Everyone's trying to solve the same problem: how do you compete for time when YouTube, TikTok, and Instagram are free? THE BIGGER PICTURE: → Engagement is about more than sheer viewing hours—it's depth, breadth, frequency → Expect standout earnings from YouTube, Meta, and Amazon's streaming business in the coming weeks → Not all time spent turns into enterprise value equally I break this down every week in Streamonomics®; subscribe for free (link under my name). Owl & Co clients get it earlier, with exclusive data and custom analysis. What's your prediction: will Netflix break 200B viewing hours for all of 2025?