Nowadays, social platforms are defined more by their entertainment value than what they originally set out to be: social networks. The rise of the creator economy is proof of that.
Which makes recent shifts in ad revenue share deals from YouTube and Twitch even that more notable. Moves like this always say a lot about how much the platforms value creators (or don’t). It also puts even more eyes on where ad dollars are going as the year winds down to an increasingly unsteady economy.
Creators are watching the space very closely, because these changes directly impact their livelihoods at a very precarious time. “[Influencers] have to think about how they connect to the different audiences, whether they need to create different content — it creates more work,” said Jenny Tsai, CEO of Wearisma, an influencer marketing platform.
With this in mind, we checked in on what the main platforms are paying creators.
Short-form video master TikTok splits ad revenue 50/50 with approved creators (those with 100K followers or more) through its TikTok Pulse program, which launched in May.
Since short-form video has taken off (thanks TikTok), YouTube recently announced it will share its ad revenue on Shorts beginning January 2023. While long-form video creators will still be compensated with a 50/50 split, Shorts creators will be entitled to a 45% share while YouTube will take 55%.
Instagram previously let creators make money through in-stream video ads, earning a 55% share of the revenue. However, it stopped supporting this venture in February 2022, when owner Meta shifted its focus to Reels. As such, only Facebook still provides that 55% share to creators by way of in-stream ads and ads on Facebook Reels.
While Snapchat doesn’t disclose percentage shares of ad revenue, creators can earn money by adding mid-roll ads into their Snap Star Public Stories. While it’s unclear how much exactly creators can earn, Variety reported that the app paid out more than $250 million to more than 12,000 creators through its Snapchat Spotlight program in 2021 alone.
Twitch, however, was in hot water last month after announcing its plans to change its revenue share split for subscriptions, for its star creators. Beginning June 1, 2023, Twitch’s top performers will continue to earn a 70/30 premium rate, but only on the first $100,000. Everything after this point is reduced to its standard 50/50 split. Unsurprisingly, creators were angry at the split, as Digiday reported last week. Creators felt this was essentially a pay cut from Twitch, while the platform was seen to be spending huge amounts of cash elsewhere on its celebrity lineup for TwitchCon.
Not that creators ever had much stability where revenue share deals are concerned: rates change quite frequently, depending on the wider macro economic environment at play. For example, Instagram began sharing revenue with creators through ads in IGTV as the world shifted online in the pandemic. Around the same time, Snapchat introduced mid-roll ads during its Stories format for its biggest creators. Now with a downturn sliding into a recession, it’s no different with these latest moves.
“There’s less advertising dollars to go round,” explained Tsai. “These are ad-funded businesses. People wanted to boost their audience sizes and therefore their ad revenue share.”
But the business model for platforms doesn’t necessarily allow creators to monetize the communities they built.
Creators, in a sense, have always been able to count on change where revenue shares are concerned. But these changes often come without clarity, which has led to frustration among the creator community.
This rings true with TikTok’s creator fund, which received backlash from some TikTok stars including Hank Green, because it’s more like a pool of funding divided between all creators, yet the money in the pool doesn’t change while the number of creators continues to rise.
More clarity on platforms’ ad revenue shares could be a starting point. “There’s been some criticism about how the deals are calculated,” said Tsai, later adding, “These rev share changes affect their income, it’s a matter of whether they can pay their rent or not.”
It affects long-term financial planning.
“A lot of the platforms struggle with what is next and what is the roadmap,” said Crystal Duncan, head of influencer marketing at Tinuiti. “They’re trying to figure out what excites creators, what is going to encourage them to join their platforms, stay there and make money.”
This uncertainty has driven creators to diversify their revenue, including in affiliate marketing and brand partnership contracts alongside their ad revenue pots. Take Vine, a short-form video app launched in 2012, which enabled users to share six-second-long looping video clips. In October 2016, parent company Twitter announced it was shutting down Vine because was unable to support content creators, due to increased competition levels, lack of monetization and advertising options.
“So many people put their entire careers into Vine, then the platform disappeared and creators had to completely start over. No one wants to do that again,” Duncan said. “Creators are trying to figure out how they can continue to grow their brand and business, so they’re not putting today’s couple of dollars against tomorrow’s longevity and future.”
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