diff --git a/app/src/main/java/org/schabi/newpipe/database/playlist/PlaylistLocalItem.java b/app/src/main/java/org/schabi/newpipe/database/playlist/PlaylistLocalItem.java
index bc17c51c4..ae81ce3f5 100644
--- a/app/src/main/java/org/schabi/newpipe/database/playlist/PlaylistLocalItem.java
+++ b/app/src/main/java/org/schabi/newpipe/database/playlist/PlaylistLocalItem.java
@@ -11,18 +11,62 @@ import java.util.List;
 public interface PlaylistLocalItem extends LocalItem {
     String getOrderingName();
 
+    long getDisplayIndex();
+
     static List<PlaylistLocalItem> merge(
             final List<PlaylistMetadataEntry> localPlaylists,
             final List<PlaylistRemoteEntity> remotePlaylists) {
-        // todo: merge algorithm
-        final List<PlaylistLocalItem> items = new ArrayList<>(
+
+        // Merge localPlaylists and remotePlaylists by displayIndex.
+        // If two items have the same displayIndex, sort them in CASE_INSENSITIVE_ORDER.
+        // This algorithm is similar to the merge operation in merge sort.
+
+        final List<PlaylistLocalItem> result = new ArrayList<>(
                 localPlaylists.size() + remotePlaylists.size());
-        items.addAll(localPlaylists);
-        items.addAll(remotePlaylists);
+        final List<PlaylistLocalItem> itemsWithSameIndex = new ArrayList<>();
+        int i = 0;
+        int j = 0;
+        while (i < localPlaylists.size()) {
+            while (j < remotePlaylists.size()) {
+                if (remotePlaylists.get(j).getDisplayIndex()
+                        <= localPlaylists.get(i).getDisplayIndex()) {
+                    addItem(result, remotePlaylists.get(j), itemsWithSameIndex);
+                    j++;
+                } else {
+                    break;
+                }
+            }
+            addItem(result, localPlaylists.get(i), itemsWithSameIndex);
+            i++;
+        }
+        addItemsWithSameIndex(result, itemsWithSameIndex);
 
-        Collections.sort(items, Comparator.comparing(PlaylistLocalItem::getOrderingName,
-                Comparator.nullsLast(String.CASE_INSENSITIVE_ORDER)));
+        // If displayIndex does not match actual index, update displayIndex.
+        // This may happen when a new list is created with default displayIndex = 0.
+        // todo: update displayIndex
 
-        return items;
+        return result;
+    }
+
+    static void addItem(final List<PlaylistLocalItem> result, final PlaylistLocalItem item,
+                        final List<PlaylistLocalItem> itemsWithSameIndex) {
+        if (!itemsWithSameIndex.isEmpty()
+                && itemsWithSameIndex.get(0).getDisplayIndex() != item.getDisplayIndex()) {
+            // The new item has a different displayIndex,
+            // add previous items with same index to the result.
+            addItemsWithSameIndex(result, itemsWithSameIndex);
+            itemsWithSameIndex.clear();
+        }
+        itemsWithSameIndex.add(item);
+    }
+
+    static void addItemsWithSameIndex(final List<PlaylistLocalItem> result,
+                                      final List<PlaylistLocalItem> itemsWithSameIndex) {
+        if (itemsWithSameIndex.size() > 1) {
+            Collections.sort(itemsWithSameIndex,
+                    Comparator.comparing(PlaylistLocalItem::getOrderingName,
+                            Comparator.nullsLast(String.CASE_INSENSITIVE_ORDER)));
+        }
+        result.addAll(itemsWithSameIndex);
     }
 }
diff --git a/app/src/main/java/org/schabi/newpipe/database/playlist/PlaylistMetadataEntry.java b/app/src/main/java/org/schabi/newpipe/database/playlist/PlaylistMetadataEntry.java
index 29bad45dc..f54ffff13 100644
--- a/app/src/main/java/org/schabi/newpipe/database/playlist/PlaylistMetadataEntry.java
+++ b/app/src/main/java/org/schabi/newpipe/database/playlist/PlaylistMetadataEntry.java
@@ -39,4 +39,9 @@ public class PlaylistMetadataEntry implements PlaylistLocalItem {
     public String getOrderingName() {
         return name;
     }
+
+    @Override
+    public long getDisplayIndex() {
+        return displayIndex;
+    }
 }
diff --git a/app/src/main/java/org/schabi/newpipe/database/playlist/model/PlaylistRemoteEntity.java b/app/src/main/java/org/schabi/newpipe/database/playlist/model/PlaylistRemoteEntity.java
index 1fddfa732..454526769 100644
--- a/app/src/main/java/org/schabi/newpipe/database/playlist/model/PlaylistRemoteEntity.java
+++ b/app/src/main/java/org/schabi/newpipe/database/playlist/model/PlaylistRemoteEntity.java
@@ -153,6 +153,7 @@ public class PlaylistRemoteEntity implements PlaylistLocalItem {
         this.uploader = uploader;
     }
 
+    @Override
     public long getDisplayIndex() {
         return displayIndex;
     }