YouTube is giving content creators new financial incentives to switch from TikTok, which is quickly growing in popularity. Because digital advertising is decreasing, the two social media sites compete for new, younger users. On Wednesday, Google’s parent company, Alphabet, will launch a new revenue-sharing programme for its short-form video service, Shorts. This will allow creators to share in the revenue generated by the ads on their videos.
YouTube’s Shorts got a lot of attention when it came out in 2020 to compete with TikTok’s popularity with Gen Z users. As a result, in September last year, YouTube, founded in 2005, began running advertisements on Shorts. Shorts has more than 1.5 billion monthly logged-in viewers, which is more than TikTok’s claimed 1 billion total users as of September 2021 and three-quarters of the platform’s total audience. TikTok declined to disclose the most recent figure.
“We have seen more viewers with Shorts, which gives us more inventory and gives advertisers more opportunities,” said Nicky Rettke, vice president of product management at YouTube. Rettke noted that this growth had also led to a rise in the number of creators using the platform for the first time. Younger, more recent audiences have been drawn to these creators. A spokesperson said that shorts have helped us get more viewers, which has led to more inventory and more chances for advertisers’ ads to be seen.
YouTube made this decision when social media sites were under pressure to make more money from ads because marketing spending was slowing and the tech market was going down. According to Alphabet, the company will eliminate 12,000 jobs overall. This is comparable to cost-cutting measures taken by other major tech firms like Meta, Amazon, and Microsoft during a downturn in the sector.
Social media networks are competing for content producers because of the downward trend. Reels is a short-form product that Instagram released to capitalise on the appeal of “snackable content.” YouTube released its third-quarter earnings in October. Analysts had predicted a 4.4% increase in revenues, but instead, they dropped 2% to $7.1 billion. Since 2020, when the company started giving separate reports on its performance, ad sales on YouTube have never decreased.
On the other hand, TikTok is expanding quickly. People familiar with its operations claim that in 2022, its global revenue was close to $10 billion because it charges less for advertising than its rivals. TikTok’s format offers “brief, digestible, entertaining, and relevant content.” YouTube hopes its Shorts feature will bring in new creators and get them to try out other formats, like longer-form videos. Longer videos may have more ads, which brings in more money for both the platform and the people who made the videos.
In 2019, Lisa Nguyen began posting cooking videos on TikTok, but she now claims that her YouTube videos receive more views and bring in a higher income. About 80% of her income as a creator comes from her YouTube videos. Nguyen only has 3 million followers on TikTok despite having more than 4.25 million YouTube subscribers. She said that after she started with YouTube Shorts, she began to think about making longer videos. “It can be difficult to convey much information in a minute.” “The benefit of YouTube is that I can also upload lengthy videos.”
The revenue-sharing programme should significantly impact how much money the creators of Shorts make when it launches on Wednesday. Currently, most funding comes from brand partnerships and a $100 million YouTube content fund, but the plan will take the place of the content fund. To qualify for the new plan, short video creators must have more than 1,000 subscribers and a minimum number of views. Short-form video creators on YouTube receive 45% of the revenue from ads, as opposed to 55% for longer videos.
Even though older social media platforms view TikTok as a fierce competitor that is rapidly gaining popularity, there are growing security concerns about it worldwide. Senior US politicians have responded by calling for a ban on the platform. According to TikTok, it collaborates with the US government to resolve issues. In January 2021, India permanently outlawed the platform due to national security concerns. More than 470 million Indians use social media, which is more than a third of the country’s population.
