YouTube Ad Revenue Sharing for Shorts Gets Mixed Reactions Among Creators

Adam Waheed, who has 15 million followers on TikTok and amassed 6 billion views on YouTube, is traveling from his Los Angeles home to Palm Springs for the invitation-only “Made on YouTube” summit. Waheed, however, was created on TikTok more than it was on any of the other platforms it uses. Posting highly produced short comedy sketches on TikTok, Waheed garnered 352 million likes on the platform and earned $7.3 million last year, largely through endorsement deals.

But Waheed says he’s ready to make YouTube Shorts, YouTube’s TikTok competitor, a much bigger part of his content strategy, following this week’s announcement that YouTube would start embedding ads in Shorts and share 45% of revenue with creators. “It’s a game-changer,” Waheed said Fortune.

YouTube hopes Waheed – and others of his ilk – will be at the forefront of a rush to its Shorts platform, helping it catch up with TikTok in an increasingly costly battle for influence and influencers. . While Waheed is excited about the new YouTube scheme, it remains to be seen whether the revenue-sharing scheme will actually shift the balance of power for short, viral music videos in favor of YouTube.

Many creators bet their livelihoods on virality, and optimizing for different platforms is no small feat. While professional creators tend to release versions of the same content on each platform to maximize engagement and payout, simply choosing which platform to release a video to first is an important decision that can affect endorsement deals, viewership volume, and critical reception.

Several great creators Fortune spoke said YouTube’s payouts were a welcome development, but showed little immediate inclination to go all-in on YouTube. There are still many questions about what a creator needs to do to have their videos eligible for YouTube Shorts payments: Can creators earn on content originally posted on TikTok? How much can creators earn on short ads? If ads on Shorts can’t be skipped, why would viewers watch content on the platform when they can scan ads on TikTok?

“I wonder how good that payout can really be,” says Vivian Tu (YourRichBFF), whose short-form personal finance videos have garnered her 2 million TikTok followers and just 55,000 YouTube subscribers. ” I think that if [YouTube Shorts] becomes a more lucrative thing, and you see your friends or other creators being successful and making money, that’s definitely something to consider.

YouTube’s decision speaks to the challenges for social media companies like YouTube, Snap and Meta, whose advertising business is based on attracting large audiences to their platforms. Internet influencers are a reliable draw, and short video clips – usually under 60 seconds – are one of the hottest products right now.

TikTok, of course, dominates the short video category. But the five-year-old platform, owned by China’s ByteDance, provides no meaningful financial compensation to people whose clips go viral and often rack up tens or even hundreds of millions of views. You note that less than 1% of its revenue comes from TikTok’s Creator Fund, the company’s ill-defined revenue stream for users who attract more than 100,000 views in a month. The lack of payments to creators has left an opening for YouTube, which is owned by the $1.3 trillion Alphabet conglomerate, to flex its balance sheet and try to lure TikTok creators into its orbit.

FilmMagic/FilmMagic for YouTube

For creators producing longer videos, like makeup application tutorials and home decor DIYs, YouTube has long been an important platform thanks to its AdSense revenue-sharing model, which gives YouTube partners (users with 1,000 subscribers and 4,000 hours of viewing) 55% of pre-production revenue. -, mid-roll and bumper on their long-form video content. Thanks to AdSense, top YouTubers like MrBeast, Rhett & Link, and Markiplier all earn over $30 million a year, putting them among the highest paid creators on the planet.

YouTube Shorts, the short music video platform launched in 2021 to compete with TikTok, now gets 30 billion daily views, according to the company.

At the Made for YouTube event on Tuesday, product manager Neal Mohan highlighted the importance of small-form video content by announcing what he described as the first “true revenue share” ever offered for short-form video. “on any large-scale platform.”

A new source of income for video creators

For married content creator couple Terrell and Jarius Joseph – who claim to earn seven figures a year from their millions of subscribers posting on TikTok, Instagram and YouTube about family life as gay parents – now think of YouTube first of all.

“Any time you have a platform that offers more, you’re going to lean into that platform,” says Jarius. “YouTube was very smart and stays competitive. Anyone looking to do this full time or earn a living will lean more into this platform where they know they can make money.

The move means creators as big as Waheed and as small as your makeup artist friend with a burgeoning social presence can profit from uploading short videos to Shorts. That said, these creators shouldn’t expect to make MrBeast money instantly. “Think of it as an extension of the gig economy,” says Ryan Detert, CEO of influencer agency Influential, which works with 3 million creators. “Some [YouTube Shorts creators] will become very rich; most will be adequately compensated.

YouTube hasn’t revealed exactly how it plans to embed ads in its short videos. Top creators like Tu and the Josephs are skeptical that ad revenue from YouTube shorts will significantly supplement their income, as they earn huge sums from brand deals. These creators expect low CPMs from bumper modules or five-second ads, rather than weight checks from 30-second ads served by YouTube on long forms.

So far, there is no indication that YouTube intends to sign exclusive contracts with the creators of Shorts. But if YouTube wants creators to treat Shorts as their “first” platform, devoting their efforts to creating videos aimed at Shorts and then reposting the clips on other platforms, Tu says they’ll have to justify the change with significant payments.

Still, she said, “It’s really exciting for creators to be in a space where they can not only get paid for everything they do outside of just being content creators , like making deals with brands, launching podcasts, books, courses, or whatever.” — but also to be paid directly by the platforms that benefit the most.

While journalists focus on the rivalry between YouTube and TikTok, creators are mostly concerned with getting paid. If they can tap into a new revenue stream on YouTube Shorts, great. If TikTok responds by introducing its own ad revenue sharing system, even better. Since the success of creators is based on algorithms, they will continue to post on all social platforms to maximize their career longevity and income.

If nothing else, YouTube’s new payment scheme may give average social media users a reason to try their hand at making money-making short videos. “It’s been very difficult to be a short-lived creator and earn a large income. It levels the playing field,” says Waheed. “Now anyone has the option to jump in and quit their job. “

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