YouTubes plans to takeover the short video format: Directly targets TikTok

The world is getting conditioned to ‘short format videos’, and audiences aren’t seeking anyone’s permission to dedicate their time on these platforms

YouTube has just announced its game-changing revenue-sharing model for YT Shorts. Let us explore how it fares against the current ‘creator revenue making model’ of TikTok, and if the challenge is a real one.?

TikTok currently attracts a younger audience. Based on TikTok statistics, more than 60% of all users on TikTok are 29 years or younger. Nearly 7 in 10 teenagers in the US use TikTok, and among all TikTok users, 90% log in to the app every day.

Instagram is hugely popular as well. But the majority of users on Instagram are slightly older than on TikTok. Instagram is mostly used by people aged 25-34.?

YouTube Shorts is currently lagging behind both at the moment in terms of popularity. Shorts usually have lower views for the same video than Reels or TikTok. Plus, you cannot provide links on Shorts for customers to go to the product site. This makes Shorts inferior for marketing purposes.

TikTok and the Creator Fund

TikTok launched the Creator Fund in spring 2021 with an initial investment of $200 million, and a promise to reach $1 billion in the next three years. TikTok has been decidedly secretive about its payout structure, but the general idea is that users who meet their requirements will be compensated for well-performing videos. How TikTok calculates its payouts is based on factors like views, video engagement and even region-specific performance. The general consensus is that TikTok pays between 2 and 4 cents for every 1,000 views. Some quick math suggests you might expect $20 to $40 after reaching a million views.

At first glance, that might look pretty bad. But remember: the fund should inspire creators to, well, keep creating. Master your TikTok game and you could be hitting millions of views on a regular basis. Once you’ve racked up at least $10 from the Fund, you can simply withdraw your Creator Fund payout The TikTok Creator Fund is available for users based in the US, UK, France, Germany, Spain and Italy. Yes, Canadians and Australians are out of luck for now, but rumour has it the fund will launch in their respective countries later in 2022.?there are a few other requirements to join the Creator Fund.

• You need to have a Pro account (and it’s easy to make the switch if you don’t)
• You need to have at least 10,000 followers
• You need to have received at least 100,000 views in the last 30 days?

But here are the major criticism, according to one prominent streamer, most creators are earning very little. Hank Green, who has more than 6 million followers on TikTok, shared a YouTube video titled “So… TikTok sucks.” In the 24-minute video, he details his experience in TikTok’s creator fund, and estimates that he currently makes about 2.5 cents per 1,000 views on the platform — a fraction of what he earns on YouTube and about half of what he had previously earned on TikTok.

His comments prompted others to share their frustrations with TikTok. Jimmy Donaldson, the streamer known as Mr. Beast, shared his TikTok earnings. According to the screenshot, he’s earned just under $15,000 from the app, with daily earnings between $18 and $32 in January. As The Information points out, that works out to less than $10,000 a year from TikTok, despite his estimate that he’s gotten “over a billion views” on the app. That number is particularly low considering Mr Beast is YouTube’s top earner, and made $54 million on the platform in 2021.

Even TikTok has started experimenting with ad revenue sharing, in May, TikTok announced a program called Pulse, but its efforts seem to focus more on the advertiser than the creator, as only the top 4% of all videos on TikTok can be monetized through its TikTok Pulse program. For the most part, creators have found it increasingly difficult to make money from TikTok’s Creator Fund.?

The legacy of YouTube

the YouTube Partner Program launched the Creator Economy and over the past three years, they’ve paid out over $50 billion to over two million creators, artists and media companies. That is $45 million a day, $1.9 million an hour, and $528 a second, every second for the past three years?

New ways to earn for Shorts creators

The popularity of short-form video has exploded on YouTube, with over 30B daily views and 1.5B monthly logged-in users. To start expanding on this new creative class, YT had previously launched a temporary Shorts Fund. Now, they are expanding the YouTube unique business model to this new format: revenue sharing is coming to Shorts!

The nuts and bolts of the creator revenue sharing model

Planned for release in early 2023, current and future YPP (YouTube Partner Program) creators will be eligible for revenue sharing on Shorts. In Shorts, ads will be run between videos in the Shorts Feed. So, every month, revenue from these ads will be added together and used to reward Shorts creators.

From the overall amount allocated to creators, they will keep 45% of the revenue, distributed based on their share of total Shorts views. The revenue share remains the same, no matter if they use music or not.

Also launching with this would be ‘Super Thanks’ for Shorts in beta to thousands of creators, with a complete rollout expected next year. Viewers can show their appreciation for their favourite Shorts, and creators can interact with their fans through purchased, highlighted Super Thanks comments. And also bringing together brands and Shorts creators as part of YouTube BrandConnect.

The Future in-shorts

While YT has an uphill task of building the loyalty as well as viewership of TikTok, the creator fund which was the pioneer of the creator economy has the power to sway market forces, mainly the creator investments.

TikTok won’t be taking a vacation on the side, it would double down on the revenue-sharing model which currently is too small and lacks scale.?

The implications for digital marketing teams are critical, YT shorts needs to be seen as a standalone channel for all marketing activities. From building specific brand channels to utilising the platform for campaigns.