By Adam Levine

This week marked another episode of the Warner Bros. Discovery reality show in which it is wooed by two suitors: Netflix and Paramount Skydance. Warner has reopened the bidding for a week, and it's beginning to look more like ABC's The Bachelor than a media merger. Who will get the rose?

It may not matter much, because Alphabet's YouTube will remain the streaming leader regardless of the outcome.

However the story ends, it will be a long process that will continue to generate headlines. But the hoopla surrounding the contest to own this Old Hollywood giant ignores the fact that Old Hollywood is past its prime. Its distribution workhorses--theaters and linear TV networks--are both in decline, and streaming is not ready to take over yet.

Complicating matters is the fact that though it is a shrinking business, linear TV is responsible for most of the video entertainment profit at the old studios.

A big reason why streaming hasn't caught up in the spending data is YouTube, which gets most of its revenue from advertising, and is the top video streamer.

Netflix and the Warner and Paramount streaming platforms generated about $60 billion in sales in the past 12 months, three-quarters of that coming from Netflix. That's roughly the same as YouTube' revenue, which many people do not put in the same category as the others.

But they should. Over 90% of U.S. adults aged 18-49--the key demographic--watch YouTube, according to the Pew Research Center. Viewership is split proportionately by gender, race, and politics, but users skew younger and toward higher incomes. It's an advertiser's paradise.

But not all YouTube revenue comes from ads. About a third of sales are generated by subscription services like YouTube TV (including NFL Sunday Ticket), YouTube Music, and YouTube Premium.

Most people think of YouTube as something that's watched on a computer, tablet, or smartphone, but it also leads in U.S. TV watching. According to Neilsen, in December, 12.5% of all U.S. TV minutes watched were on YouTube, and it was number one among all distributors. As for the other streamers, Netflix came in second at 8.8%, followed by number six Paramount (2.3%), and number nine, Warner (1.4%). No matter who winds up buying Warner, the new combined streamer will still trail YouTube in the U.S., even in the living room.

And YouTube's content costs go only to things that are popular. Netflix, Warner, and Paramount amortized around $40 billion worth of content in the past 12 months, much of it on flops. YouTube had nearly no amortization on content, and only pays out to the successful videos and channels.

And that success can come from unexpected places. All the top 10 channels by views are either international or are for children. Number 11 is the bastion of U.S. culture, World Wrestling Entertainment, which airs its live shows on Netflix and Comcast's Peacock. Number 12 is the YouTube star Mr. Beast, who also has a hit show on Amazon Prime that reviewers complained about because it looked like a YouTube video. The most famous woman in the world, Taylor Swift, languishes at 59th. At the other streaming services, they would most likely all prefer Taylor Swift content to the rest, but that's not how it works at YouTube.

Netflix, Warner, and Paramount all have YouTube channels, because it would be silly not to be on the largest video platform.

As entertainment media become dominant, they naturally coalesce around formats best suited for the technology and business model. Film gave us 90 to 120 minute movies. TV brought half-hour situation comedies and hourlong dramas. Streaming favors videos of any length from a few seconds to many hours, which is YouTube's bread-and-butter. More recently, smartphones have given rise to short videos in an untraditional vertical orientation, like TikTok and YouTube Shorts.

The future of video entertainment distribution is YouTube and TikTok, not Netflix or the old studios.

Write to Adam Levine at adam.levine@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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February 18, 2026 15:00 ET (20:00 GMT)

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