When it comes to video entertainment, Netflix needs no introduction. It counts 325 million subscribers in more than 190 countries. And it generated $45 billion in revenue in 2025.

This streaming stock has skyrocketed 838% in the past 10 years (as of March 25), a performance that certainly gets a lot of attention. Investors focused on Netflix need to look at another dominant company, however. It's a notable winner in the streaming wars.

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But Netflix also has some serious competition out there from a well-known tech giant.

You might not immediately think of Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) as a competitor to Netflix. It is a massive technology enterprise with its hands in numerous industries. But it also owns YouTube, which is undeniably a leading video streaming platform that is giving Netflix a run for its money.

In 2025, YouTube alone raked in $60 billion in revenue, which is 33% more than Netflix registered. Of that $60 billion, $40 billion came from advertising. Subscriptions, like YouTube TV, YouTube Music and Premium, and NFL Sunday Ticket, accounted for the remainder.

It's not exactly a surprise to learn that YouTube makes so much money from ads, as this is Alphabet's bread and butter. But what is worth pointing out is that Netflix's growth driver, which is its booming ad segment that's projected to double sales in 2026, puts it more in direct competition with YouTube.

Investors should pay close attention to engagement data. According to Nielsen, 12.5% of all TV viewing time in the U.S. in the month of January went to YouTube. That's 42% higher than the 8.8% share that Netflix represented. Alphabet Chief Business Officer Philipp Schindler points out that YouTube "remains the No. 1 streamer in the U.S. for nearly three years."

When measuring TV viewing time, Nielsen counts only YouTube's main platform. It excludes the live linear streaming component. This makes it a fair comparison.

But the business models aren't exactly the same. Netflix spends tons of money, $20 billion planned in 2026, to license and produce its own content. YouTube, on the other hand, specializes in user-generated content. That's a big difference. Nonetheless, viewers are more interested in what YouTube offers. And this will make it more difficult for Netflix to capture more attention.

YouTube also benefits from a network effect, which supports its staying power. If creators produce more content that caters to wider audiences, it attracts more viewers. Consequently, as engagement and viewership increase, it further incentivizes more content to be created. This means that YouTube is constantly getting better over time.

This is all wonderful news for Alphabet shareholders. Netflix investors, however, must keep a close eye on these trends.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Netflix. The Motley Fool has a disclosure policy.

Streaming Wars: 1 Netflix Rival Dominating the Industry was originally published by The Motley Fool