YouTube has announced that it will start sharing ad revenue with creators who create Shorts on the platform. The move comes as YouTube tries to compete with the likes of TikTok, which became the most downloaded free app in Apple’s US App Store last month and allows users to create short videos that are often accompanied by music. Shorts on YouTube will be eligible for YouTube’s TrueView ad model, which is the company’s ad system that lets viewers skip ads if they choose to do so after five seconds.
In an effort to catch up to TikTok in the short-video industry, YouTube, which is controlled by Google, has announced that it would begin giving well-known producers a larger share of advertising money.
The firm will start paying a share of the revenue from Shorts, split according to the films with the most views, starting in 2019, according to YouTube’s chief product officer Neal Mohan, who made the announcement on Tuesday at the annual creator event “Made on YouTube.”
According to Mohan, this is the first time that scaled genuine income sharing is being given for short-form content.
Due to YouTube’s lack of transparency on the rewards, it is currently unclear how profitable this chance will be for Shorts makers. According to YouTube, it will assemble all of the Shorts’ ad earnings each month. YouTube will pay creators 45% of the secret proportion of the total that is assigned to them.
Popular producers have long had the option to monetize their content on YouTube’s main site by including advertisements and taking a cut of the proceeds. To make it possible, Google introduced the YouTube Partner Program (YPP) in 2007.
Up until recently, a $100 million Shorts Fund that was established last year was the only method to profit from short positions.
In a blog post on Tuesday, YouTube stated that “Shorts-focused producers can apply to YPP starting in early 2023 by attaining a criterion of 1,000 subscribers and 10M Shorts views over 90 days.”
We began with the Shorts Fund as a beginning step, but creator funds are unable to keep up with the phenomenal growth we are witnessing in short-form video, according to Mohan.
YouTube is under pressure from TikTok, which has been gaining market share by giving users a platform to create short music-filled viral videos. Since Alphabet started disclosing the video unit’s sales in the fourth quarter of 2019, the second quarter of YouTube’s fiscal year had the slowest pace of quarterly revenue growth. Ruth Porat, CFO of the firm, recently stated that shifts in customer behaviour favouring short videos were challenging YouTube and that the company was experimenting payment strategies for Shorts.
Creators will earn the same amount of money under the new revenue-sharing arrangement on Shorts whether or not their films contain copyrighted music, which necessitates YouTube paying licence costs.
This allows us to do away with all the conventional difficulties associated with music licencing.
Ads that play before to or during regular YouTube video makers’ productions bring about 55% of their income. Ads in Shorts don’t appear next to any particular videos; instead, they appear between videos and in feeds for Shorts.
According to Mohan, Shorts has 1.5 billion monthly logged-in visitors and 30 billion daily views, both of which are unchanged from the figures the firm disclosed in April.