Google revenue

YouTube will share revenue with short film creators as TikTok surges

YouTube chief product officer Neal Mohan, left, with YouTube stars Cassey Ho, center, and iJustine, front second right, at the Nasdaq on May 5, 2016.

Rommel Demono | Getty Images

As YouTube tries to chase TikTok out of the short-form video market, the Google-owned company says it will start giving a bigger share of ad revenue to popular creators.

Neal Mohan, chief product officer for YouTube, said at the annual “Made on YouTube” creators event on Tuesday that starting next year, the company will pay a portion of Shorts’ revenue, distributed based on videos that get the most views.

“This is the first time true revenue sharing has been offered for large-scale, short-term video,” Mohan said.

It’s unclear just how lucrative this opportunity will be for short film creators, as YouTube provides limited payment information. YouTube said each month it would aggregate ad revenue from Shorts. Of this sum, an undisclosed percentage is allocated to creators, and YouTube will pay them 45% of this amount.

Popular creators have long been able to make money on the main YouTube site by running ads in their videos and keeping a portion of the revenue. Google launched the YouTube Partner Program (YPP) in 2007 to help make this happen.

Until now, the only way to make money with Shorts was through a $100 million Shorts fund launched last year.

“Starting in early 2023, creators focused on shorts can apply for the YPP by reaching a threshold of 1,000 subscribers and 10 million shorts views in 90 days,” YouTube said in a blog post on Tuesday.

Mohan said, “We started with the Shorts Fund as a first step, but creator funds can’t keep up with the incredible growth we’re seeing in short videos.”

YouTube is feeling the pressure from TikTok, which has gained market share by offering people a way to create viral short videos with music. In the second quarter, YouTube experienced its slowest rate of quarterly revenue expansion since Alphabet began allocating sales of the video unit in the fourth quarter of 2019. The company said it was testing models of monetization for Shorts, CFO Ruth Porat previously said YouTube was being challenged by shifts in consumer behavior that favored short videos.

In the new short film revenue-sharing model, creators will receive the same amount of money whether or not their videos include copyrighted music, forcing YouTube to pay licensing fees .

“It allows us to remove all the traditional complexities of music licensing,” Mohan said.

Regular YouTube video creators get 55% of their revenue from ads shown before or during their videos. In Shorts, ads are not associated with specific videos, but run between videos and within Shorts feeds.

Mohan said Shorts has 30 billion daily views and 1.5 billion monthly connected viewers, which is unchanged from numbers shared by the company in April.

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