YouTube introduces revenue sharing for Shorts

21 October 2022

YouTube introduces revenue sharing for Shorts

As the competition for creator talent heats up, YouTube introduces revenue sharing for Shorts.

Short-form video is also becoming a path to YouTube’s partner programme as the company attempts to keep creators within its ecosystem and away from competitors such as TikTok.

One of several announcements related to the TikTok lookalike made at the company’s inaugural Made on YouTube event was the launch of a revenue-sharing programme for Shorts early next year. According to the platform, this is the first time such a payout model has been applied to short-form video at scale, a strategy it is implementing as the war for brand dollars and creator talent heats up.

“We want to support creators in all the ways they’re using YouTube to tell their stories, including the mobile-first generation of creators making YouTube Shorts,” said YouTube’s chief product officer, Neal Mohan, during a livestream of the event in Los Angeles on Tuesday.

Because the format is set up in a scrolling feed without the usual ad placements, revenue sharing for Shorts differs from other areas of YouTube. YouTube will pool revenue generated by Shorts on a monthly basis to pay creators and assist them in covering music licencing costs. Creators keep 45% of the revenue, which is distributed based on the number of total Shorts views they receive, and those who do not use music will not see their cut reduced.

The move marks a departure from a fixed $100 million fund established in May of last year to assist creators in earning money from Shorts. Shorts were first tested in 2020, but have gradually become a focus for YouTube as other aspects of its business slow.

“We started with the Shorts fund as a first step, but creator funds can’t keep up with the incredible growth in short-form video,” Mohan explained. He claims that Shorts receive 30 billion views per month from 1.5 billion logged-in users.

Furthermore, YouTube is making Shorts a path to the YouTube Partner Program (YPP), which has existed since 2007 and has helped DIY video makers become some of the most influential and well-paid internet celebrities.

Beginning in 2023, creators with at least 1,000 subscribers and at least 10 million Shorts views in 90 days can apply for YPP and its perks, including monetization across Shorts and long-form videos. YouTube also plans to introduce a YPP tier with lower eligibility requirements so that a greater number of creators can access follower funding options such as stickers, chat benefits, and channel memberships.

“With the transition to revenue-sharing and the expansion of fan-funding, we anticipate that the majority of our Shorts fund recipients will earn more money under this new model,” Mohan said. “More people will have a voice as a result of this.”

New incentives

Keeping creators within the YouTube ecosystem is critical because the platform is competing not only with TikTok, the dominant short-form video destination but also with copycats from Instagram and Snapchat. Marketers are also becoming more selective with their budgets in a down economy, which means they may spend less on a smaller number of channels.

YouTube’s interest in Shorts as a more significant revenue driver comes as the platform has become a weak point for parent company Google as it recovers from pandemic highs. In the second quarter, revenue increased by just under 5% year on year, falling short of analyst expectations. In comparison, YouTube’s revenue increased 84% year on year in Q2 2021.

Executives stressed that a monetization push centred on Shorts is not intended to divert attention away from mainstay formats such as long-form video. Rather, the company is encouraging multi-format creators to use different video lengths for different types of content and experiences.

Those assurances come as Shorts has brought in new faces: 40% of Shorts fund recipients had never received a check from YouTube before. As it looks to the fledgeling offering as a growth driver, YouTube is also encouraging its old guard to give Shorts a try.

Cooking channels, for example, may want to branch out to other topics but do not want to risk losing engagement by posting subject matter that has not been proven to resonate. Shorts could be used to test followers’ appetites for new ideas before making a larger investment.

However, based on its previous success in monetizing video, YouTube believes Shorts could be a viable standalone source of income for creators in the near future.

“Our belief is that you should be able to make a living off of any format,” Tara Walpert Levy, YouTube’s vice president of Americas and global content, told Business Insider. “We’re still in the early stages of Shorts, but we’re seeing a lot of encouraging signs, whether it’s ad interest or some of the other revenue streams that we’ve recently made available, like brand deals or shopping.”

Kris Collins, a creator who goes by the name Kallmekris and shares comedic content, said she has used Shorts to draw people into her channel while making a living off of ads around long-form content. With the most recent updates, that trade-off may be eliminated.

“This is a huge incentive for me to consolidate all of my work,” Collins said on the show. Other platforms, she later added, are focused on giving creators “15 seconds of fame.”

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Paul Smith

Paul Smith

With more than 20 years of industry experience in the UK, USA and Australia under his belt, Paul Smith is a seasoned professional who will infuse your digital marketing with his wealth of knowledge and expertise. Paul specialises in digital strategy, SEO and data analytics.

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