YouTube Shorts Could Steal TikTok Thunder With Better Creator Deal
The biggest open secret in short video has nothing to do with the algorithm. The secret is that you can't get rich on TikTok, as even the most viral creators derive a negligible amount of their income from the platform itself.
TikTok remains hugely dominant over the copied short video streams that competing social media giants have created in recent years, like Instagram Reels and Snapchat Spotlight. But, according to reports from The New York Times, YouTube Shorts is gearing up to announce an ad revenue-sharing model that could revolutionize short-form video and give TikTok a run for its money – literally.
Revenue sharing is in place, creator funds are exhaustedYouTube was arguably the first platform for creatives to make a living by posting engaging content on the internet. In 2007, just three years after YouTube was founded, the platform unveiled its Affiliate Program, offering creators 55% of revenue generated from ads shown before or during their videos.
But TikTok pays creators through its Creator Fund, a $200 million pool unveiled in the summer of 2020. At the time, TikTok said it planned to expand that pool to $1 billion to United States over the next three years, and to double it internationally. .
That may seem like a lot of money, but by comparison, YouTube has paid creators over $30 billion in ad revenue over the past three years.
One of the main reasons TikTok and other short-form video apps haven't unveiled a similar revenue-sharing scheme yet is that it's harder to figure out how to fairly distribute ad revenue across a stream. short videos generated by algorithm. You can't embed an ad in the middle of a video - imagine watching a 30 second video with an 8 second ad in the middle - but if you put ads in between two videos, who would get the revenue share? The creator whose video appeared just before or after? Or, would a creator whose video you watched earlier in the stream also deserve a cut, since their content encouraged you to keep scrolling?
"We're in the early stages of how we monetize this stuff, but I'm an optimist, and I think the industry will find out," said Jim Louderback, former CEO of VidCon, in a conversation with TechCrunch this summer. "They're going to have to, because otherwise the creators will go where the money is."
But YouTube may have just figured it out. The company is expected to announce a partner program-style ad revenue sharing model on Tuesday at its Made on YouTube event. If the rumors are true, YouTube Shorts creators would get 45% of ad revenue — a smaller cut than on YouTube videos, but a substantial improvement over a paltry payment from the Creators Fund. As Louderback said, creators will follow the money.
The problem of making money on TikTokCan't get rich on TikTok? What about Charli D'Amelio, who started posting dance videos from her bedroom in high school and went on to earn $17.5 million in 2021? But this money does not come from TikTok itself. Instead, she and her sister Dixie D'Amelio got rich through massive brand deals, a reality show, and venture capital investments. Even YouTuber MrBeast (Jimmy Donaldson), who earned more than all other creators earning $54 million last year, doesn't seem to make much money on TikTok.
That's because TikTok's Creator Fund template just doesn't work. The Creator Fund is a static pool of money that's divided every day between users of TikTok's creator program based on how many views they get - but as the pool doesn't grow, that means that as TikTok is getting bigger, creators are making less money.
Longtime internet creator Hank Green said in a video on the Creators Fund that he initially earned about 5 cents per thousand views, but the number of creators participating in the program exceeded the growth of the program itself. So over time, his decree of payment...
The biggest open secret in short video has nothing to do with the algorithm. The secret is that you can't get rich on TikTok, as even the most viral creators derive a negligible amount of their income from the platform itself.
TikTok remains hugely dominant over the copied short video streams that competing social media giants have created in recent years, like Instagram Reels and Snapchat Spotlight. But, according to reports from The New York Times, YouTube Shorts is gearing up to announce an ad revenue-sharing model that could revolutionize short-form video and give TikTok a run for its money – literally.
Revenue sharing is in place, creator funds are exhaustedYouTube was arguably the first platform for creatives to make a living by posting engaging content on the internet. In 2007, just three years after YouTube was founded, the platform unveiled its Affiliate Program, offering creators 55% of revenue generated from ads shown before or during their videos.
But TikTok pays creators through its Creator Fund, a $200 million pool unveiled in the summer of 2020. At the time, TikTok said it planned to expand that pool to $1 billion to United States over the next three years, and to double it internationally. .
That may seem like a lot of money, but by comparison, YouTube has paid creators over $30 billion in ad revenue over the past three years.
One of the main reasons TikTok and other short-form video apps haven't unveiled a similar revenue-sharing scheme yet is that it's harder to figure out how to fairly distribute ad revenue across a stream. short videos generated by algorithm. You can't embed an ad in the middle of a video - imagine watching a 30 second video with an 8 second ad in the middle - but if you put ads in between two videos, who would get the revenue share? The creator whose video appeared just before or after? Or, would a creator whose video you watched earlier in the stream also deserve a cut, since their content encouraged you to keep scrolling?
"We're in the early stages of how we monetize this stuff, but I'm an optimist, and I think the industry will find out," said Jim Louderback, former CEO of VidCon, in a conversation with TechCrunch this summer. "They're going to have to, because otherwise the creators will go where the money is."
But YouTube may have just figured it out. The company is expected to announce a partner program-style ad revenue sharing model on Tuesday at its Made on YouTube event. If the rumors are true, YouTube Shorts creators would get 45% of ad revenue — a smaller cut than on YouTube videos, but a substantial improvement over a paltry payment from the Creators Fund. As Louderback said, creators will follow the money.
The problem of making money on TikTokCan't get rich on TikTok? What about Charli D'Amelio, who started posting dance videos from her bedroom in high school and went on to earn $17.5 million in 2021? But this money does not come from TikTok itself. Instead, she and her sister Dixie D'Amelio got rich through massive brand deals, a reality show, and venture capital investments. Even YouTuber MrBeast (Jimmy Donaldson), who earned more than all other creators earning $54 million last year, doesn't seem to make much money on TikTok.
That's because TikTok's Creator Fund template just doesn't work. The Creator Fund is a static pool of money that's divided every day between users of TikTok's creator program based on how many views they get - but as the pool doesn't grow, that means that as TikTok is getting bigger, creators are making less money.
Longtime internet creator Hank Green said in a video on the Creators Fund that he initially earned about 5 cents per thousand views, but the number of creators participating in the program exceeded the growth of the program itself. So over time, his decree of payment...
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