YouTube announces 45% of ad sales will go to Shorts creators

STORY: Facing intensifying competition from TikTok, YouTube unveiled a new way for creators to make money on short-form video on its platform.

The Google-owned video-streaming service announced Tuesday that starting next year, the company for the first time will give a portion of ad revenue to video creators of Shorts -- which are vertical videos up to one-minute long.

Youtube said it would start sharing 45% of the ad revenue on Shorts within its YouTube Partner Program.

That compares with its standard distribution of 55% for videos on its main platform.

Here’s Reuters entertainment business reporter Dawn Chmielewski:

“Like TikTok, these are short form videos that are threaded – that people can scroll through, sort of, one after another, like eating popcorn. And so YouTube has created a new mechanism for creators to take advantage of this format, which it says is has become increasingly popular. And so they'll be rewarded for creating these videos.”

In fact, Shorts attract more than 1.5 billion monthly viewers since YouTube launched the format in late 2020 in a bid to compete with TikTok… the social media app that got its start hosting lip-sync and dance videos and has subsequently burgeoned to 1 billion monthly users.

In April, YouTube created a $100 million fund to entice creators to make the bite-sized videos to hang onto talent.

The new revenue-sharing plan is meant to be a bigger and more sustainable lure than the fund and something TikTok has yet to match -- that is, its own, consistent way to reward content creators.

On this, YouTube thinks it has an edge.

“YouTube has been recently touting how much money it's, it's paying to creators who use its platform to reach audiences. It says over the last three years, it has paid creators over $50 billion. So this is its incentive to you to keep creators on its platform, making videos that attract audiences.”

YouTube is sharing a smaller proportion of its sales with Shorts creators to offset its significant investment in developing the feature, according to Vice President Tara Walpert.

Google generated $14.2 billion in YouTube ad sales during the first half of this year, up 9% from the same period in 2021.