On Tuesday, YouTube announced plans to share advertising sales with creators of Shorts, its bite-sized video feature. Unlike on YouTube’s main site, the new programme will compensate creators using a pool from ads that run in Shorts.
That’s similar to the way that TikTok pays its popular
stars, although TikTok has used a fixed fund that’s been criticised for meagre
payouts.
But YouTube sees its effort as more ambitious than what TikTok
has done. Neal Mohan, the company’s chief product officer, described the plan
as the first to fund short-form online video “at scale”.
Creators can join “whether they want to be the next big
thing or just need help paying the bills”, Mohan said at the company’s Los
Angeles production space. “We want YouTube to be the place that gives them the
greatest support in the digital landscape.”
YouTube, part of Alphabet’s Google, is facing competition
from TikTok for both young viewers and the online stars that made the video
platform a commercial success.
Like Instagram, YouTube has responded to TikTok with
mimicry. In 2020, YouTube introduced Shorts, a format for vertical videos that
it has increasingly promoted in the company’s app. Earlier this year, YouTube
disclosed that Shorts had over 1.5 billion monthly viewers and told investors
that it would bring ads to the format.
YouTube began sharing ad sales with producers in 2007 and
now has more than 2 million creators in its programme. Last year, YouTube reported
more than US$28 billion in ad sales, before creator payouts. Yet growth has
slowed this year, which analysts attribute to Apple’s restriction on ad
targeting and TikTok’s rise.
Mohan said that creators can join YouTube’s partner
programme if they have more than 10 million views on Shorts and over 1,000
subscribers. Historically, YouTube has given 55 per cent of its ad sales to
creators and kept the remainder. With Shorts, YouTube will only share 45 per
cent of its ads programme.
Tara Walpert Levy, a YouTube vice-president, said the
company changed its commission because it was better for building “a long-term
business”.
YouTube also introduced a new feature called Creator Music
that allows creators to licence popular songs in videos easily and still make
money. Previously, music rights holders took the entire cut of revenue from
songs that played in videos. Popular music in clips has been a big driver of
TikTok’s popularity.
To announce the feature, YouTube brought on stage Jason
Derulo, a musician with a huge following on TikTok.
“To me, this announcement is going to shake the world,” he
said about YouTube’s new feature.
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