YouTube unveiled a new way for creators to monetize short-form video, as it faces fierce competition from TikTok.
The Google-owned ( GOOGL.O ) streaming service announced on Tuesday that it will introduce ads on its video feature Shorts and give 45% of revenue to video creators. This compares to a standard split of 55% for videos outside of shorts and TikTok’s $1 billion fund to pay creators.
Hairstylist-turned-YouTube creator Chris Collins, who goes by Kallmekris, praised YouTube for offering revenue sharing for the shorts.
“Other platforms are focused on getting people their 15 seconds of fame, which is great,” he said. “But YouTube is taking a different approach. They’re helping creators make things in multiple formats.”
The Internet’s dominant video site has struggled to compete with TikTok, the app that started hosting lip-sync and dance videos and has since grown to 1 billion monthly users.
YouTube responded in late 2020 with shorts, minute-long videos that attract more than 1.5 billion monthly viewers.
In April, YouTube created a $100 million fund to entice creators to make bite-sized videos to promote talent. The new revenue-sharing plan, first reported by The New York Times, aims to be a bigger and more sustainable lure than the fund and TikTok has yet to match.
Vice President Tara Wolpert-Levy said YouTube is sharing a small portion of sales with the shorts’ creators to offset its significant investment in developing the feature.
Google earned $14.2 billion in YouTube ad sales during the first half of this year, up 9% from the same period in 2021.
But the most recent quarterly ad sales reflect the slowest growth since the data was released three years ago. While global economic factors are at play, financial analysts have said that TikTok is also a factor.
