YouTube Shorts vs TikTok: A new opportunity for advertising revenue and earnings to popular creators

YouTube on Tuesday carried out new revenue-sharing tools for content creators on its YouTube Shorts video product in its most recent work to counter TikTok’s unequaled growth. As YouTube attempts to pursue down TikTok in the short-video market, the Google
-owned organization says it will begin handing over a greater slice of advertising revenue to popular creators.

YouTube Shorts vs TikTok

Until TikTok’s surge — over 100 million downloads in the US alone this year — YouTube had been the most feasible source of revenue for content creators, who got a share of the revenue from the ads that showed up with their videos. With the partner program revealed a decade ago, thousands had made YouTube their full-time job.

Presently YouTube wants to get back to that primacy.

“This seems like a giant attempt to grab frustrated TikTokers,” said Serena Kerrigan, a TikTok star with over half a million followers.

YouTube’s new revenue-sharing program can overturn the center of power for youthful online creators, where TikTok has reigned supreme.

The creator economy has blasted in recent years. As per a report by the venture firm SignalFire, more than 50 million individuals around the world in 2020 were working as online creators, earning a living by monetizing their audiences across platforms including TikTok, YouTube, and Twitch. That number has expanded to 200 million in 2022, as indicated by a new report by Linktree, a tool that permits digital creators to share various links on their social media. YouTube said more than 2 million creators are monetizing on its platform.

Under the new plan, YouTube creators will actually want to capture a portion of the revenue produced from ads that run between Shorts videos. YouTube plans to put 45% of the revenue produced by the ads into a pool that will then be distributed to creators in light of their share of total Shorts views. To partake in the program, makers should have at least 1,000 subscribers and have amassed no less than 10 million views in the past 90 days. The program will start being carried out in mid-2023.

“​​It’s a really big moment for creators,” said Amjad Hanif, YouTube’s vice president of product management. “When we launched the partner program 15 years ago, it was the first of its kind and kicked off the creator economy. This brings all the goodness and benefits creators have felt from revenue sharing and brings it over to short form as well.”

Hanif said creators who don’t meet the requirements can in any case bring in cash through early access to different tools that work with payments from their audiences, for example, Super Thanks, Super Chat, Super Stickers, and channel memberships, which permit fans to give micropayments to creators for specific features. “This new lower tier will allow creators to join much earlier in their journey as a creator and earn directly from our fan fencing products,” Hanif said.

The introduction of revenue sharing into the short-form video space is a significant change in the creator ecosystem. No other platform offers revenue sharing. TikTok, for example, pays makers out of a fixed pool of cash called its creator fund. The more makers who join the fund, in any case, the more ways the cash is split.

YouTube long videos to Shorts? A new tool “Edit into a Short” makes any YouTube video a TikTok-like Short for up to 60 seconds

In May 2021, YouTube presented its own $100 million creator fund for Shorts creators. Notwithstanding, the organization feels that to support its developing class of influencers, it necessities to provide them with better chances to bring in cash.

“Funds by their very nature are a fixed amount, and that amount doesn’t grow based on the size of the creator population,” Hanif said. “The beauty of revenue sharing is that as we do better as a platform, creators will be able to earn as well. We call it the partner program because it really is a partnership with these creators.”

One more huge sticking point for YouTube Shorts has been music. TikTok reshaped the music industry by permitting creators to set their content to popular songs. On YouTube, in any case, the music options were far more limited. The complexities of music licensing have left some long-form video creators unable to include famous songs in their videos.

The organization is acquainting Creator Music to fix these issues. Creator Music will be a hub that gives makers simple access to a far-reaching and developing catalogue of music to use in their content, while as yet giving the artists and music rights holders a revenue stream.

Creators likewise will actually want to buy “affordable, high-quality music licenses that offer full monetizing potential,” the organization’s declaration says, and “creators will keep the same revenue share they’d usually make on videos without any music.”

Creator Music is as yet being produced for release in the US and will launch comprehensively in 2023. “This is a pretty big change in how commercial music was used on the platforms,” Hanif said. “The music artists, the creators, and fans all win.”

Taty Cokley, a YouTube maker with 950,000 subscribers who have been making content on the platform for four years, said that she was particularly amped up for the new music offerings.

“All of us will elevate our content. It will come off more genuine than it did before,” she said. “Most of our audiences want to feel like they’re talking to a friend, not an influencer. Now when they watch our videos they’ll feel like they’re hanging out with us.”

Many content creators reacted to Tuesday’s huge declarations with glee.

“YouTube is my number one focus now because of the potential of the ad revenue on shorts,” said Jared Neelley, a YouTube creator in Houston with 30,000 subscribers. “I personally dislike making long-form content because of the culture shift TikTok brought to the world. It’s all about quick information in short form, and now I can be rewarded for it.”

Hank Green, a longtime YouTube creator and co-founder of VidCon, an annual convention for online video artists, said on Twitter that YouTube’s new revenue options were “a serious threat to TikTok, which is already earning a clear, definitive reputation for being antagonistic to creators.” He additionally added that numerous creators see TikTok essentially as a stepping stone to building an audience on “a platform where they have more control and opportunity (like podcasts or YouTube.)”

Green likewise noticed that while the declaration meant a “huge day for creators,” the progressions in music use were a significantly greater success for the music industry, which is probably going to see a lift in permitting revenue from the expanded use of popular songs.

“It feels like YouTube cares about creators with their hearts, but they care about the labels with their wallets,” he tweeted.

It’s not yet clear how worthwhile the opportunity will be for Shorts creators because YouTube is giving limited data on the payouts. YouTube said that every month it will pool together ad revenue from Shorts. Of that aggregate, an undisclosed percentage is allocated to makers, and YouTube will pay them 45% of that amount.

Popular creators have for some time had the option to bring in cash on YouTube’s main site by running ads in their videos and keeping a portion of the revenue. Google launched the YouTube Partner Program (YPP) in 2007 to enable that to occur.

Until now, the best way to bring in cash in Shorts was through a $100 million Shorts Asset that was launched a year ago.

YouTube is feeling the tension from TikTok, which has been gaining market share by giving an outlet to individuals to make short viral videos with music. In the second quarter, YouTube saw its slowest rate of quarterly revenue development since Alphabet started breaking out the video unit’s sales in the final quarter of 2019. The organization said it was testing monetization models for Shorts, CFO Ruth Porat said beforehand that YouTube was being tested by changes in consumer behavior that favored short videos.

In the new revenue-sharing model on Shorts, creators will get a similar amount of cash whether or not their videos incorporate copyrighted music, which requires YouTube to pay licensing fees.

“This lets us remove all the traditional complexities involved with music licensing,” Mohan said.

Regular YouTube video creators procure 55% of revenue from ads that play previously or during their videos. In Shorts, advertisements aren’t connected to specific videos however in between videos and in Shorts feeds.

Mohan said Shorts has 30 billion daily views and 1.5 billion signed-in watchers watching a month, which is unchanged from the numbers the organization shared in April.