In its ongoing battle with TikTok for vertical video supremacy, YouTube is poised to play its most valuable card. He’s gearing up to turn on aggressive monetization for Shorts, his shorthand vertical video format, and promises to help millions of creators make money on the platform.
Starting early next year, Shorts will be part of the YouTube Partner Program, meaning those who qualify can start receiving a share of the advertising money Shorts generates. YouTube also allows creators who aren’t eligible for the program to earn money through tips, subscriptions, and merchandise sales. (The New York Times reported the news for the first time.) The goal is to offer more and better monetization options than TikTok and potentially win over (and win back) many creators flocking to the rival platform.
The announcement comes about 18 months after the initial launch of Shorts and a year after YouTube product manager Neal Mohan promised a “long-term monetization plan”. Shorts seem to be growing fast: Amjad Hanif, vice president of product for YouTube creators, says the feature gets 30 billion views a day and 1.5 billion people watch it every month. However, the shorts can often still look like a TikTok clone, and it certainly hasn’t reached TikTok’s level of cultural cachet. But what TikTok generates in culture, YouTube generates revenue.
So far, YouTube has monetized Shorts modestly, through creator funds, purchases, and tips. These are similar to how TikTok and Instagram monetize their own vertical video, and many creators feel they are not enough. Hank Green summed up the creator well enough to The edge Nilay Patel on the decoder podcast: “I hate them.”
What Green and others want is the standard YouTube model where YouTube keeps 55% of all creator video revenue and creators get 45%. This revenue split has turned YouTube into a career for many creators, and although YouTubers have had issues with the platform, this split has tended to work. “The time when YouTube launches its monetization product for Shorts must be soon,” Green said.
Shorts don’t quite get YouTube’s entire supply – YouTube keeps more of the money
However, Shorts doesn’t quite get the full YouTube offering. The platform reverses its percentages, keeping 55% of revenue for itself and giving 45% to creators. Hanif explains that some of that extra money will go towards paying for music used on the platform so creators can use anything in the library without worrying about rights. Either way, YouTube thinks it’s a better deal than creators get just about anywhere else.
YouTube is also trying to make it easier to monetize creators on the platform, especially those who haven’t yet hit the mark – 1,000 subscribers and 10 million views of shorts in the last 90 days or 4,000 hours of long-time viewing in total – to enter its partner program. The company is introducing a new tier through which creators can access features such as the Super Thanks tip option and paid channel subscriptions without being part of the ad program. Hanif will not say the exact requirements for this level, except that it would be much lower than the existing ones. “And so a lot of creators earlier in their career who took a little longer to join the program will be able to join the program much sooner,” he says, “and start getting a paycheck much sooner than they weren’t in the past.”
With traditional YouTube videos – what Hanif calls “long-form YouTube” – the advertising model is quite simple. Users click on a video, they watch an ad before or during the video, and the creators get some revenue from that ad. It is not a question of who generated this advertising view or who receives the money.
The model is simple: take all the videos you watch, split the ad revenue between them
With a rapid stream of short vertical videos a la Shorts or TikTok, it’s much more complicated. If you watch an entire video, then flick through three more, then see an ad, then watch two more full videos, then close the app, who gets paid? What if one of these videos is a duet or a remix of another video? What if they were challenges launched on the same song?
Many of these details are not yet understood, which is why the Shorts Partner Program will not launch until next year. But Hanif describes the rough plan this way: If you open Shorts, watch six videos, see two ads, and exit the app, YouTube will take the ad revenue from those two ads and split it among the six videos.
“The biggest difference you’ll likely see compared to other products in our long version,” Hanif continues, “is that watch time sometimes plays a big role.” This is one of the reasons why you started seeing YouTube videos get longer over time. “But in the case of the short format, where you speak in less than 60 seconds, it’s really a view that is the criterion that counts.”
Short films are a matter of views, not viewing time (but it’s complicated too)
But that raises another question: what is a view? YouTube doesn’t like to define the word publicly, and Hanif would only say “it’s a few seconds – we don’t count it correctly when it appears”. Advertisers want to know what users are actually watching, he says, as do creators.
What all of this means, in practice, is that Shorts is likely to be less lucrative for the most popular channels, which will now have to share revenue with everything else in the stream, but allow more people to earn money. . That seems to be exactly YouTube’s goal: Hanif says YouTube currently has around 2 million monetizing creators, and he expects that number to be closer to 3 million by the end of 2023. TikTok notably has succeeded in relentlessly promoting new creators to its audience, and YouTube seems set to do the same.
YouTube claims to have paid creators more than $50 billion over the past three years. Building Shorts into a significant portion of this will take time. “Our ad sales team has worked with many advertisers on it,” says Hanif, “and it will take some time to build the business we’ve had in long form.” YouTube is also figuring out how, exactly, to talk to creators about using all the tools – longform, live, Shorts and everything else – on the platform.
But he keeps coming back to the same point: “It’s really the first large-scale platform that’s going to share revenue with shortcut creators where they can actually expect a paycheck and earn money. silver.” There are still a lot of loose ends to work out, but YouTube is betting the salary will be enough to keep people around while it figures them out.