YouTube Shorts Monetization Challenges TikTok, but Questions Remain
- YouTube has announced the biggest change to its creator monetization program in 15 years.
- YouTube will share ad revenue with Shorts creators who have 1,000 subscribers and 10 million views.
- That’s a big change, but some producers are concerned about money going to music labels.
During an event called “Made on YouTube” on Tuesday, the video giant issued an implicit challenge to TikTok by announcing ad revenue sharing for short-form creators.
While YouTube is the first major platform to move beyond a creator fund for short-form video — an update that was cheered by many — some questions remain about how much money creators will take home.
That’s because YouTube is allocating a portion of Shorts’ total ad revenue to cover music licensing. The platform did not specify how much of the total revenue pool would go to music labels and declined to divulge further information to Insider. The remainder of ad revenue — which does not go to labels — will be split between creators (45%) and YouTube (55%).
YouTube CEO Susan Wojcicki was ill yesterday, but her top lieutenants Neil Mohan, Tara Walpert Levy, Amjad Hanif and Lior Cohen provided updates on what Mohan characterized as the biggest change in 15 years to YouTube’s partner program — its creator monetization initiative.
Here were three key takeaways:
1. Short monetization is a challenge for TikTok, but concerns remain
Starting next year, instead of funding YouTube Shorts, YouTube Shorts will start sharing ad revenue with creators.
After forking over undisclosed amounts to music-licensing companies, YouTube will take the remaining amount and split it with creators. Creators will take 45%, with YouTube pocketing 55%.
It would be one of the biggest shifts by a major short-video app toward sharing ad revenue directly with creators — and it poses a challenge for TikTok to compete. TikTok mainly pays creators through its Creator Fund and other monetization features, and has recently started dipping its toes into sharing revenue with creators of top videos.
But some YouTubers have raised concerns, such as the undisclosed portion of ad revenue that the companies will record — whether or not creators use music in their shorts.
“Creators are not getting 45% of the revenue generated by shorts,” veteran producer Hank Green Wrote on Twitter. “Producers will receive 45% of some undisclosed percentage of Shorts revenue.”
“If we make shorts without music, why does the music industry make money from them?” Matt Koval tweeted, YouTube’s former creator liaison. “I didn’t think Shorts was a music-centric format; most of the videos I watch don’t even have music.”
YouTube declined to share with Insider what percentage of its Shorts’ ad revenue will go toward music licensing and how much music Short will have across the platform.
2. YouTube will soon open monetization features to more creators
Previously, to qualify for YouTube’s monetization programs, creators needed 1,000 subscribers and 4,000 hours of long-form video watch time within a year of applying. Now, creators with 1,000 subscribers and 10 million views on Shorts within 90 days are eligible.
“Our belief is that you should be able to make a living in any format,” says Walpert Levy. “It’s early days for shorts, but we’re seeing a lot of encouraging signs, whether it’s ad interest … or brand deals or acquisitions.”
Separately, next year, YouTube is launching a new tier of partner programs with lower eligibility thresholds for long-form, live and shorts creators. Eligibility terms were not disclosed, but these creators will not be able to monetize with ads; They only gain access to fan-funded monetization tools like Super Thanks (viewer tips) and channel memberships.
All told, YouTube said it paid out more than $50 billion to 2 million creators, artists and media companies over the past three years.
3. YouTube is looking to streamline music licensing
While creators will soon be able to monetize shorts with music licensed under the terms mentioned above, YouTube is still licensing long-form videos.
Starting next year, a new tool called Creator Music will be launched within the YouTube Studio dashboard to help creators avoid copyright infringement. There, producers can directly purchase licenses for songs or enter into revenue-sharing agreements with artists.
Creator Music is currently in beta and will launch later this fall with partners including Empire, Believe, Downtown and Marlin.