I use OSMC for all the RPis connected to TVs in the house and have no major complaints from a daily-driver standpoint. Can't speak to your specific use case requirements, but is just flashing an extra SD Card and testing it out of the question?
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I second that and would like to add, that I didn't find any other YouTube client, beside the "official" Kodi app by anxdpanic. However, as it relies on an API key to work, it can also play restricted content, which currently does not work on Newpipe and probably never will again.
There is sendtokodi, which uses yt-dlp. I'm a bit surprised that there are no newpipe-extractor clients for Kodi, since there should be hooks for everything you'd need. Then again, I don't know how well it works outside of Android.
Nice to have a backup solution in case the other doesn't work.
I also use OSMC and have no major complaints. I've done some mucking about in the base at the CLI (NFS, fstab, adding some CLI tools), and have run into no issues. I've not done anything like docker on it as that's all on my dedication d server
Good to hear. Having a raspberry and kodi focused base with an open Linux backend sounds good. Will try that later.
The nice thing on OSMC is that it's Debian based (yet currently still on bullseye) thus, it offers many possibilities.
I've been working on what you want basically for awhile now. But currently what I've come with is:
Plasma Bigscreen with Waydroid (and instead of Newpipe I'd recommend Stube instead in Waydroid).
If you do want 1080p for Netflix etc for whatever reason, basically sandboxed Firefox with DRM enabled with (streaming service website) turned into a Webapp
I'm not sure it works with kodi or not, but have you tested PlasmaTube? It uses Piped instances to provide youtube contents. Also available as Flatpak.