YouTube Shorts could steal TikTok’s thunder with a better deal for creators

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The most widely known fact about micro-videos is unrelated to the algorithm. The truth is, even the most popular producers on TikTok make a tiny fraction of their money from the app itself, so don’t expect to become filthy rich there.

TikTok continues to enjoy immense popularity despite the rise of alternative platforms that provide short-form videos. These include Instagram Reels and Snapchat Spotlight. However, The New York Times claims that YouTube Shorts is getting ready to introduce an ad revenue-sharing arrangement that may completely change the short-form video industry and make TikTok obsolete.

Profit splits are in, but Artist Trust funds are out

Perhaps the first website that allowed talented individuals to make a living by sharing their work online was YouTube.

YouTube started sharing 55% of its advertising earnings with creators just three years after its launch.

TikTok has a $200 million Creator Fund it will distribute in 2020. TikTok announced at the time that it planned to raise $1 billion in the US over three years and $2 billion globally.

That’s a lot of money, but it pales in comparison to YouTube’s $30 billion in ad revenue over the past three years.

TikTok and other short-form video apps may not have a revenue-sharing model due to the difficulty of distributing advertising money on algorithm-created short films. Who receives the money when ads are placed between videos? Who made the previous or next video? Should the video producer whose work motivated you to keep reading also earn a cut?

Former VidCon CEO Jim Louderback told TechCrunch, “We’re still in the early days of monetizing these things, but I’m optimistic.” This is a necessary since “creators follow the money.”

YouTube may have cracked it. At its Made on YouTube event on Tuesday, the firm is anticipated to implement ad revenue sharing akin to its Partner Program. If the claims are genuine, YouTube Shorts creators would receive 45% of ad revenue, which is lower than for YouTube videos but more than the Creator Fund payout. Louderback said that artists will follow the money.

How to solve the TikTok money problem

Do you really think that you can make a living only through TikTok? So, what about Charli D’Amelio, who, after filming dancing videos in her dorm room during her teenage years, gained $17.5 million by 2021? Nonetheless, TikTok is not the source of that funding. On the contrary, she and her sister Dixie D’Amelio became wealthy from endorsement deals, a reality show, and venture capital investments. YouTube’s MrBeast (Jimmy Donaldson), who made $54 million last year, is struggling to break even on TikTok.

This is due to the fact that the Creator Fund concept implemented by TikTok has proven to be unsuccessful. The Creator Fund is a fixed pool of money that is distributed daily among TikTok creator programme users based on how many views they receive; however, because the pool does not grow, creators’ share of the daily distribution decreases as TikTok’s user base grows.

In a video on the Creator Fund, veteran internet creator Hank Green noted that he made roughly $5 per 1,000 views at first, but that as the programme grew, the number of creators participating in it decreased. Therefore, as time passed, his earnings dwindled to around two cents per thousand views. With that percentage, even if your video got 10 million views in a single month, you’d only make $200.

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