Key Takeaways

• Transparency from Netflix and YouTube has set the market standards against which everyone else measured and evaluated.
• YouTube's transparency and growing creator economy suggests that it is an emerging roadblock for all streaming services
  
• MrBeast's success with Squid Game implies 2MM emerging YouTube creators to compete with growing streaming services.
  
• Neither investors nor streaming services, including Netflix, seem to be noticing or appreciating that, yet.
• Given we are likely to see more MrBeast-type successes on YouTube in 2022, my guess is that will change.
  

 Two weeks ago, I highlighted two themes around transparency:

1. Whether Netflix's sharing an hours viewed standard in Top 10 lists sets a new precedent for creator transparency in the market; and,
   
2. Whether the market understands the significance of MrBeast getting 100MM+ views over 72 hours for a recreation of Squid Game
   

Netflix continues to set and then redefine the market standard for transparency, and YouTube's more granular metrics continue to offer a stark contrast to the minimal disclosure from legacy media SVOD and AVOD streaming services.

Why do these matter?

In many ways they are not significant: investors want a growth story, and subscriber counts can either tell a growth story or they do not. Anything more may not matter, yet: the objective is free cash flow when the business matures. 

Transparency can hurt a story for investors more than it can help it, as I told Observer’s Brandon Katz back in July in an excellent article on transparency in streaming:

“For every streaming service not named Netflix, streaming is neither the only line item nor a significant line item contributing to Operating Income or EBITDA,” Rosen told Observer. “The risk of disclosing metrics is that it may create additional storylines which confuse investors about the business. Better to have them clear on where the business is headed than to raise more questions.”

But, transparency from Netflix and YouTube sets the market standards against which everyone else measured and evaluated, consistently. That was true in 2021, and seems positioned to remain true in 2022 and beyond.

The question is how their standards are shaping the marketplace in ways that we saw were significant, and in other ways we may not have noticed.