YouTube competes with TikTok by giving short film producers 45% of advertising sales

In response to TikTok’s growing competition, YouTube has introduced a new mechanism for producers to monetize short-form video.

As TikTok’s competition with YouTube grows, the latter has introduced a new mechanism for producers to monetize short-form video.

The Google-owned streaming service revealed on Tuesday that it would start running ads on its short-form video content Shorts and offer video producers 45% of the profits.

Advertisement

In contrast, TikTok has a $1 billion fund for rewarding creators, and its usual share for films outside of Shorts is 55%.

The YouTube creator Kris Collins, a former hairstylist who goes by Kallmekris, praised YouTube for allowing revenue-sharing for 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’re helping creators make stuff in multiple formats.”

The dominating video platform on the internet has found it difficult to compete with TikTok, an app that started out by offering dance and lip-sync videos but has since grown to have 1 billion monthly users.

Late in 2020, YouTube replied with Shorts, one-minute-long videos that draw more than 1.5 billion monthly viewers.

YouTube established a $100 million fund in April in an effort to retain talent by incentivizing producers to produce the bite-sized films. The New York Times was the first to report on the new revenue-sharing strategy, which is intended to be a stronger and longer-lasting enticement than the fund and something TikTok hasn’t yet matched.

According to Vice President Tara Walpert Levy, YouTube is dividing creators of the Shorts less of the proceeds in order to balance off the large investment it made in creating the feature.

During the first half of this year, YouTube ad sales at Google reached $14.2 billion, an increase of 9% from the same period in 2021.

However, the most recent quarterly ad sales showed the weakest growth since the data’s disclosure started three years ago. Financial analysts claim TikTok is a factor, in addition to the global economic ones that are at work.