YouTube has unveiled a new way for creators to make money on short-form videos, as it faces intense competition from TikTok.
The Google-owned streaming service announced Tuesday that it will offer ads on its video feature Shorts and give 45 percent of revenue to video creators. This is compared to its standard distribution of 55 percent for videos outside of shorts and TikTok’s $1 billion (about Rs 8,000 crore) fund to pay creators.
Hairstylist-turned-YouTube-producer Chris Collins, who goes by KalmmaCris, praised YouTube for offering a revenue-sharing offer for the shorts.
“Other platforms are focused on getting people their 15 seconds of fame, which is great,” she said. “But YouTube is taking a different approach. They are helping creators create content in multiple formats.”
The internet’s leading video site is struggling to compete with TikTok, the app that started hosting lip-sync and dance videos and has since grown to 1 billion monthly users.
YouTube responded in late 2020 with short, minute-long videos that attracted more than 1.5 billion monthly viewers.
In April, YouTube created a $100 million (around Rs 800 crore) fund to entice creators to create shorter videos to engage the talent. The new revenue-sharing scheme, first reported by the New York Times, is a bigger and more sustainable lure than the fund itself and is something that TikTok has yet to match.
Vice President Tara Walpert Levy said YouTube is sharing a small proportion of sales with shorts makers to offset its significant investment in developing the feature.
Google earned $14.2 billion (about Rs 1,13,360 crore) in YouTube ad sales during the first half of this year, up 9 percent from the same period in 2021.
But the most recent quarterly ad sales reflect the slowest growth since the disclosure of that data three years ago. While global economic factors are at play, financial analysts have said that TikTok is also a factor.
© Thomson Reuters 2022
