In the platforms’ arms race for creators, YouTube Shorts splashes the cash

Get honest, in-depth coverage of media, marketing and TV, delivered to your inbox daily. Sign up for the Digiday Daily Newsletter here.

YouTube really wants creators to know it has their backs.

The new way creators can make money from Shorts makes that statement loud and clear.

From Feb. 1, YouTube is introducing a revenue scheme to its Shorts format, meaning eligible creators earn a 45% share of the revenue from the ads viewed around their Shorts videos, while YouTube retains the remaining 55%.

And while one could argue that this percentage split still isn’t as good as the revenue share deals on Facebook (55% creators/45% Facebook for in-stream ads) and TikTok (50/50 split), YouTube is making it far easier for more creators to make money by lowering the eligibility threshold to earn from its Partner Program. 

YouTube’s easier entry to earning

Going forward, creators with over 1,000 subscribers and 10 million Shorts views over the preceding 90 days can earn from Shorts ad revenue, according to YouTube. 

In comparison, creators on TikTok must have a minimum of 100,000 followers to have a chance of making any cash. Creators on Facebook must have a minimum of 10,000 followers, at least five active videos on their page as well as a total of 600,000 minutes viewed in the last 60 days.

It’s likely that this new YouTube Shorts revenue split could put pressure on its main rivals: TikTok because its revenue share deals are only accessible to more popular creators; Meta is still weighing what those deals look like for creators amid ongoing tests of ads in Instagram Reels. 

It’s safe to say creators are open to new opportunities right now. Their frustrations with TikTok and Meta seem to be getting louder. Indeed, TikTok has been blasted for barely paying its creators at all. In fact, Fortune reported that of the seven influencers interviewed, all of whom had at least 100K followers, not one of these creators earned more than $5.

Top YouTuber Mr Beast, who has 131 million subscribers on the platform, even noted that if he gets one billion views on YouTube Shorts, he’d make $100K, but if he were to get the same amount of views on TikTok, he’d only earn $1,000.

While ForeverSammmy has fewer followers than Mr Beast and those interviewed by Fortune, (she has 25K followers on TikTok, 5,000 on Instagram and 1,000 followers on YouTube), this news of YouTube Shorts monetization exceeded her expectations because platforms rarely pay creators well for views. In fact, she agreed that YouTube’s new Shorts rev share scheme is certainly better than what TikTok offers.

As ever with all things advertising, timing is everything. And it couldn’t be better for YouTube’s short-form video play. Creators aren’t exactly enthralled with what’s on offer elsewhere. YouTube’s new plan clearly plays on this. And chances are this pitch is going to go unchallenged — at least in the short term. It won’t be lost on execs at Meta and TikTok that trying to immediately match YouTube’s new commercial pitch to creators could be a slippery slope.

“The earning potential for creators from YouTube’s new revenue sharing model will eclipse that of competitors, including TikTok’s Creator Fund and Meta’s advanced monetization opportunities on Instagram and Facebook,” said Sophie Crowther, European community director at Billion Dollar Boy.

How the revenue share works

There’s a lot more to the calculations than the topline split, but its premise is simple: the better a creator’s Shorts content performs, the more money they make. And if Shorts grows, the amount creators’ earn grows too.

This is how YouTube explained it: if a creator’s Shorts video receives one million views, the creator is allocated 1% of the Creator Pool, or $900. Creators will then earn 45% of that total amount, which in this example would be $405. 

To say, there’s a lot of excitement around this move would be an understatement. It’s been building ever since the revenue share deal was officially announced in September 2022. This includes creative agency Billion Dollar Boy, which has already received enquiries from agencies and brands about it, to the point that a lot of them are now prioritizing YouTube and the Shorts format.

What about the YouTube Shorts Fund?

Before the revenue share split there was the YouTube Shorts Fund — a $100 million cash pile the video service had set aside for creators to monetize their content.

But the problem with funds like this is they generally have a cap on how much creators could earn from ads in their posts.

“It feels like YouTube is really putting its money where its mouth is when it comes to creator content, and creators should and will feel encouraged by that vote of confidence,” said Crowther.

Will this be enough to drive creators to YouTube over TikTok?

In a word, potentially. Aside from new monetization policy and lower eligibility threshold, Shorts videos seem to be widely watched. Shorts is now generating 1.5 billion views per month, as Bloomberg reported last summer. View counts like that are reminiscent of TikTok’s approach, where it’s seemingly easier to go viral, Moreover, higher view counts could encourage some creators to produce longer videos, which could be a boon to YouTube’s engagement stats.

Now that YouTube is monetizing Shorts, creators will get those additional views, which will push up subscribers on their main channels, increasing overall numbers, said Simon Friend, agency lead at round. They’ll essentially get paid far more.

Still, Shorts is far from a no-brainer for all creators. While some agencies like Billion Dollar Boy can vouch that agencies and brands are more keen to profit from YouTube’s latest scheme, creators might still need more convincing. Less around the monetary aspect, more on the format’s features.

ForeverSammmy highlighted that YouTube still has limited functionality for editing compared to TikTok. “There is much more variety in terms of editing styles and formats on the latter,” she said.

Add to that TikTok’s ability to make anyone go viral – the one feature which encouraged creators in their droves to the platform. As ForeverSammy pointed out, it takes far longer to go viral on YouTube Shorts. 

But the fact remains: while TikTok might have commanded the biggest stake of short form creators to date, followers still don’t equal cash. And cash is ultimately what creators want.

“If I was a TikTok influencer, I’d start repurposing my content for YouTube Shorts immediately,” said Jess Phillips, founder and CEO of The Social Standard. “It’s going to be really hard for TikTok to compete if creators can get automatic money from YouTube, versus TikTok where they’re creating in the hope of maybe getting a few pennies or a brand to come along.”

More in Marketing

How some creators are using AI to make higher quality content – faster – for platforms

Some content creators are using generative AI tools to spark new levels of creativity and innovation and are sharing their experiences online in how they’re using these tools to streamline their workflows and boost productivity.

Research Briefing: Brands use Facebook less, dive into YouTube Shorts more

In this edition of the weekly Digiday+ Research Briefing, we share focal points from Digiday’s recently released reports on marketers’ evolving social media tactics, including how they’re using Facebook less and diving into YouTube Shorts more.

As crypto winter ramps up, why some marketers aren’t feeling the cold

In 2023, some brands’ executive boardrooms are still insulated from the chill of crypto winter, for better or worse. But the rising pressure of crypto skepticism has made it more urgent than ever for companies to figure out how to use blockchain technology to support their core offerings and customer base rather than simply dropping branded NFTs and hoping for the best.